Does the RCA have any teeth?

Almost three years ago the Regulatory Commission of Alaska wrote a sternly-worded letter to the six “railbelt” electric utilities, which serve consumers from Southcentral to Interior Alaska.

Get your act together – or else, the RCA told the utilities.

Things like uniform reliability standards, dispatch of the most economical power through the grid and “open access” to transmission lines for independent power producers, common in the Lower 48, are sorely lacking in among the small independent railbelt utilities, even though they are now physically connected into one grid.

Or else – what?

The regulatory commission has the authority to issue orders to the utilities – these are, after all, consumer-protection issues. If there’s doubt about the RCA’s authority, the state Legislature could strengthen the law.

So far not much has happened. The utilities may have called the RCA’s bluff.

Fairbanks Rep. Adam Wool has introduced House Bill 382 to address the issue but the first hearing on the bill was held March 28, less than three weeks away from the Legislature’s scheduled adjournment in mid-April.

Chris Rose, executive director of the Renewable Energy Alaska Project, a group that advocates for renewable and energy efficiency, makes no bones about his frustration with the glacial progress of moving the railbelt power grid into the 21st century.

Uniform reliability standards among the utilities may be the most pressing need as the utilities swap power among themselves. These are technical standards that ensure safety and reliability – preventing technical glitches that can cause a blackout – and protect against cyber attack.

One of the RCA’s findings in its June, 2015 letter to the utilities was that uniform reliability standards are lacking.

“In its letter the Commission gave the utilities time to voluntarily come up with uniform regional reliability standards. It is now nearly three years later and reliability standards have not been agreed to by the utilities,” Rose wrote in a letter to the House Energy Committee for its March 28 meeting.

Some progress is being made, however. Rose said four of the six railbelt utilities have formed the Alaska Railbelt Cooperative Transmission and Electric Co., or ARCTEC and hired a Georgia-based consulting firm, GDS Associates, to look at reliability and other issues.

GDS hopes to wrap up its work by May. The initiative could result in a proposed new railbelt organization, the Railbelt Reliability Council, to implement uniform standards.

However, Rose believes another voluntary effort won’t work. “REAP does not believe the voluntary process the RCA has requested the utilities to engage in will ultimately be successful. There is simply too much disagreement among the utilities,” he said in his letter.

The problem with the voluntary approach is that each of the separate utilities, four being member-owned cooperatives and two municipal-owned, has a fiduciary responsibility to its respective members, and not the region, Rose said.

“Since none of these utilities has an explicit responsibility to the region, it is REAP’s belief that the Legislature must declare that reliability and other standards be set,” through a system-wide entity, which HB 382 would accomplish.

“There is no disagreement that the region needs reliability standards. The real question is how are we ever going to get there from here?”

A system-wide authority would ensure the standards are set and enforced by the RCA, Rose said.

On another matter, the dispatch of the most economical power through the grid, the utilities have again talked about this for years, with not much happening.

Economic dispatch means that are most efficient generators in the grid, no matter which utility owns them, is operated to provide as much power as possible in the system.

As electricity demand picks up, as is normal during daytime peaks of activity, the second-most efficient generators are fired up, and then the third and fourth most efficient generation. The goal is to have the most efficient generation shared as widely as possible. These arrangements are common in other states, and the cost benefits to railbelt electric ratepayers could be in the tens of millions of dollars a year.

Just as with reliability standards, in 2015 the RCA asked the utilities to come up with a voluntary system to do that. It hasn’t happened.

Again, some progress is being made. Rose said three Southcentral utilities, Chugach Electric, Anchorage’s city-owned Municipal Light & Power and Matanuska Electric Association, have proposed a “tight” (firmly-managed) power pooling arrangement for economic power dispatch.

However, the deadlines for forming and implementing this, “have come and gone and there is still no tight power pool in the Anchorage area. Furthermore, there is little consistency and transparency about how those negotiations are going. Instead, the public hears one story from one utility and another story from another utility,” Rose said.

One problem of significance, although there are others, is the lack of any consistent process how an independent power producer, such as a private developer of a wind, hydro or even solar project, can put power into the grid.

The process varies among the six utilities.

Also, there is no uniform tariff, or fee, for an independent power producer moving power to a customer. Instead, each utility imposes a fee. This means that the separate tariffs for moving power from, for example, the privately-owned Fire Island wind project to a customer near Fairbanks, for example a mine, could result in a “pancaking” of fees and charges that would make the sale of the power uneconomic.

“There is no region-wide, consistent and transparent set of rules for assessing the transmission system, a system that has been constructed entirely from public money of one sort or another, such as federal, state, municipal or cooperative,” Rose said.

“This lack of predictability chills investment from the private sector (into new power projects) that Alaska sorely needs,” he said.