Long-term health of power requires cooperation

This is to express my strong support of Matanuska Electric Association’s proposal to the Regulatory Commission of Alaska to join Railbelt utilities into a traditional generation and transmission cooperative. Alternatively, MEA proposes the creation of a genuine power pool for all regulated electric cooperatives in the Railbelt.

The time has come for a comprehensive, long-range regional approach to power generation along the Railbelt from Fairbanks to Homer and possibly beyond. Numerous power plants are proposed for construction by 2015, including Homer Electric, Chugach Electric, MEA, Agrium’s coal gasification project in Nikiski and coal plants to support the proposed Beluga, Pebble and Nuvista mines. Total projected power requirements are more than 1,000 megawatts and would be higher if Copper Valley power requirements were integrated into the total.

Whether these power plants are fueled by coal or gas, there will be a significant increase in the amount of carbon dioxide, mercury, sulfur dioxide and nitrous oxide released into Alaska’s pristine environment. The projected annual taxes on a single 100-megawatt coal-fired plant are estimated at $400,000 for sulfur dioxide, $856,000 for nitrous oxide, $121,000 for mercury and between $9 million and $30.5 million for carbon dioxide. Some studies suggest a tax as high as $105 a ton for carbon dioxide, which would increase the tax on CO2 to more than $100 million per year.

Assuming a conservative cost of coal at $10 a ton and a 3 percent annual escalation for inflation on the coal and taxes, a 100-megawatt coal-fired power plant would realize life cycle expenses (40 years) between $1.32 billion and $2.93 billion. In addition, it would cost about $200 million to construct the plant and there would be annual operating, maintenance and administrative expenses.

If the tax on CO2 emissions reaches $105 a ton, the annual coal and tax expenses would total more than $8.2 billion over 40 years. These cost estimates are for just one 100-megawatt coal-fired plant. For all of the above plants, the coal and taxes would be between $13.2 billion and $29.3 billion over 40 years, plus an additional $2 billion for construction. This suggests that one or more large hydroelectric projects could be viable today.

There are now only four ways to generate reliable base-load power: gas, coal, nuclear and hydroelectric. Gas and coal are high polluters, nuclear requires disposal of toxic waste and would be a high risk for damage in the high seismic area of Alaska. That leaves hydroelectric as the most reasonable alternative to eliminate pollution and possibly lower the overall cost to consumers.

The time has come for a coordinated effort to produce power for the entire Railbelt, and possibly beyond, through one or more large hydroelectric power projects. Hydroelectric power now provides about 25 percent of Alaska’s power requirements. There are literally hundreds of potential locations in Alaska for hydroelectric power plants to be developed. Along the Railbelt, Chakachamna Lake could produce between 300 and 400 megawatts, Watana Lake (above Devil’s Canyon off the Susitna River) could produce several hundred megawatts and a Susitna River dam at Devil’s Canyon could produce well over 1,000 megawatts of power.

While initial costs to construct these hydroelectric projects are much higher than coal- or gas-fired plants, the life cycle costs may actually be less depending on the future tax rates for emissions and the future cost of coal and gas. The Regulatory Commission of Alaska should create a thorough life cycle cost analysis of all alternatives as part of the upcoming study.

The intertie between Fairbanks and Anchorage was designed and constructed to accommodate the higher voltage from a large hydro project on the Susitna River and the right-of-way is already established for the power lines. It is only 15 miles from the proposed dam site at the lower end of Devil’s Canyon through a valley and over Chulitna Pass to the intertie along the Parks Highway. Financing to construct a $5 billion to $7 billion project on the Susitna River could be obtained through revenue bonds based on future utility payments from Railbelt power users along with federal and state grants. U.S. Sen. Lisa Murkowski has proposed a renewable energy fund from the Permanent Fund Reserves that could provide funding for this project and other renewable energy projects throughout Alaska. The effects would be to reduce energy costs for all Alaskans and eliminate all power-plant-related emissions.

Alaska has the potential to lead the United States and the world in the use of renewable power. We need to take advantage of the hydroelectric resources in Alaska as well as wind, geothermal, solar, tidal and other renewable energy forms. Alaska can lead the way to reduce carbon dioxide, mercury and other emissions that contribute to global warming and poor health.

It will take a cooperative regional approach to make this happen along the Railbelt. No single utility has the financial assets required to tackle a large hydroelectric project. The state regulatory commission needs to step forward to require cooperation from all utilities for the long-term benefit of all residents between Fairbanks and Homer (and possibly Iliamna and Bethel).

New power plants are required by 2015. Now is the time to start the planning, environmental studies, permitting and financing required to construct and operate one or more large-scale hydroelectric projects. The Regulatory Commission of Alaska has the power to make this happen. Support is needed from all Alaskans.

Marc Van Dongen is a resident of Palmer.