Another utility study baffles the mind

Many of you have read my recently published articles regarding the $15 billion needed to update the antiquated Railbelt generation and transmission (G&T) system.

For those of you who missed these articles, I pointed out that 350,000-plus Alaskans and 33,000 businesses that reside along that Railbelt corridor depend on the reliable deliverability of electricity for their light and heat. Then I stated the gravity of the situation: no single utility can secure the funding necessary to upgrade and appropriately maintain our present G&T system alone. Help must come from the state. Electrical infrastructure is no different than all other such community infrastructures — roads, bridges, ports, airfields. They all support our way of life and economy.

A heroic effort was undertaken by all the Railbelt electric utilities from July 2009 to February 2010 to develop legislation to create a unified generation and transmission corporate entity to facilitate the utilities securing necessary funding. This key bill, called GRETC (Greater Railbelt Energy Transmission Corp.), was based on the recommendations of the REGA (Railbelt Electrical Grid Authority) study and the RIRP (Regional Integrated Resource Plan) results. Total cost for the studies was more than $2 million.

At session end here is what state lawmakers did — in overtime. They passed a $3.139 billion capital budget that included 45 electric utility-related appropriations to the tune of $50 million. Hydroelectric, wind and geothermal development funds were appropriated and power cost equalization was fully funded. After months of collaboration on the part of the six utilities — a first ever — and after a $1 million study pointing to the same legislation, the answer to the Railbelt was resoundingly clear. The legislation so desperately needed by the Railbelt utilities died in committee.

We got nothing.

The last thing on earth we need is another expensive study; we will need every single dollar to upgrade our system. And you guessed it — instead of passing our key legislation they funded another $800,000 study. This will be the third. In 2008, the REGA study was funded at $800,000; in 2010 the RIRP study was funded to the tune of more than $1 million, both by Alaska Energy Authority.

Unbeknownst to the Railbelt, on April 9 a new funding request was submitted to the legislature for another $1.8 million study of which $800,000 was funded. These dollars would hire a private sector consulting company that would assist a legislative task force to study legislation to create a public corporation charged with the responsibility of analyzing electric power needs and procuring power to meet those needs. Sound familiar? All six utility GMs and CEOs just requested the same thing in GRETC and got turned down flat. There was absolutely no dialogue with the Railbelt utilities about this request.

A pending resolution is now before the board of directors of MEA opposing $800,000 for a third study. Simply put, another appropriation does nothing but duplicate at least two major efforts undertaken within the last two years. Further, the MEA board suggests in the resolution, that there are better and more compelling needs to be funded than another study, the results of which are already known.

Apparently the people who engineered this redundant additional study have a better feel for what the Railbelt utilities need than do the boards and senior managers who worked for more than a year to craft the GRETC legislation.

As the utilities move toward proactive solutions we must, in parallel, educate Alaskans along the Railbelt of the monumental tasks ahead of us, and the predicament we are left in.

There you have it. Now what to do about it? Coming in Part II on May 23.

Joe Griffith is general manager of Matanuska Electric Association.