MEA calls for regional energy co-op

PALMER - Matanuska Electric Association’s managers say their call for either a Railbelt-wide electrical utility cooperative or a regional power pool is a continuation of efforts that began before statehood to create a power pool that would guarantee sound management of the power supply.

The region’s utilities are presently each working on individual generation plants, most needing to retool major parts of their systems, including MEA, which is seeking to build a pair of 100-megawatt power plants. — one coal-fired and the other gas-fired.

Jim Sykes of Palmer, founder of Utility Watch, an organization that has been critical of MEA policies, questions the utility’s motives and timing, and said the proposal means the utility’s managers need to hedge their bets in case plans for a coal plant on the Glenn Highway and a natural gas plant in the Mat-Su Valley don’t pan out.

Either way, the Regulatory Commission of Alaska could start proceedings as soon as Sept. 20 to gather input on the proposed creation of an energy cooperative involving all of the region’s power providers except Anchorage’s utility, Municipal Light & Power.

The Aug. 28 MEA petition calls for “creating a traditional generation and transmission cooperative to serve as the power supply entity for the Railbelt's regulated electric cooperatives or, alternatively … the creation of a mandatory power pool to serve as the single power supply entity for all regulated electric cooperatives in the Railbelt.”

MEA General Manager Wayne Carmony is aksing state regulators to consider the merits of creating the cooperative at a time when MEA and other Railbelt utilities are working on their own long-term electricity generation plans.

“All of the electric co-ops along the Railbelt are either planning to build, or have recently completed construction of, new generation facilities,” Carmony says this week in a prepared release. “While the individual approach works, there may be economies of scale and overall efficiencies that are not being realized.”

He goes on to explain in another prepared statement that the power cooperative’s “past efforts to promote a Railbelt-wide G&T have not produced the desired results. MEA hopes that by submitting this question to the RCA the Railbelt utilities will be better able to get past former stumbling blocks and advance a result that will best serve the public interest, since the RCA has the legal authority to impose a G&T format upon the individual electric cooperatives.”

Carmody said MEA sent a message to other Railbelt utilities urging support for this plan. As of Thursday there were no formal replies.

Chugach Electric spokesman Phil Steyer said Chugach will prepare comments should the RCA hold a formal proceeding, but until then, “We don’t have a position on it yet.”

Steyer said the proposal isn’t altogehter new, but includes two issues — an energy cooperative and an energy pool.

“Chugach has a history of working cooperatively with other utilities,” Steyer said. “These ideas have been discussed many times in the past.”

One utillity watchdog doesn’t think other utilities will go for the plan or answer Carmody’s letter.

“I can only imagine they saw the letterhead and tossed it right in the wastebasket,” Sykes said.

Sykes supports the idea of a power cooperative but doesn’t trust the motives of a utility he said has worked in the opposite direction for the past decade. MEA does not work with an existing association of Railbelt utilities and is moving forward on its own to build generation facilities.

“They can’t have it both ways and go full speed ahead on [building] a coal plant, and [then] file this,” Sykes said.

Sykes said MEA could be in a highly vulnerable position should its proposed coal or natural gas plant projects not happen as planned. Having a guaranteed backup plan with other power generators is to MEA’s benefit. The problem Sykes sees for MEA now is that it has not been good at cooperating with other regional players. The state filing also completely excludes the municipal utility in Anchorage, which has the lowest area rates and access to natural gas.

“Someone in MEA knows they’re in trouble and this is the first sign of it,” Sykes said. “I suspect this is a sign that the lightbulb’s gone on over there.”

MEA states in a Sept. 12 release that it “has long encouraged the formation of a traditional G&T as the best means to benefit all Railbelt rate payers over the long-term.”

The proposal also falls in line with an $800,000 Railbelt energy study called for by Gov. Sarah Palin.

Sykes may question MEA’s motives for proposing Railbelt cooperation, but he and other critics of the electric cooperative “don’t know their history,” said MEA Assistant General Manager Tuckerman Babcock. “It has been a consistent theme since before statehood.”

The issue was broached in the 1960s, ’70s and ’80s, he said. The last set of talks were in 2005 with six meetings between heads of Railbelt utilities. Babcock said Chugach Electric wasn’t too interested and Municipal Light & Power’s manager didn’t believe it was legal for it to join a co-op.

Babcock said the governor’s study on Railbelt power provision makes this an especially good time for the RCA to take up the study. The RCA is a regulatory body that could make a co-op happen, he said.

A Municipal Light & Power spokesman said Carmony would have to address questions on the MEA issue, and he was out of town this week. MEA spokeswoman Lorali Carter said it is possible for ML&P to join the co-op by contract and still benefit from it. She also said the co-op would b good for utilities that have reaped the benefits of state support grants.

“All utilities would equally benefit from past and future subsidies,” said Carter, MEA manager of government and corporate communications. “There are existing disparities in wholesale power costs along the Railbelt. A traditional G&T cooperative could end these disparities by allowing all consumers in the interconnected Railbelt system to share proportionally in the benefits derived from working together and from both past and future state and federal electric system subsidies.”

The state review process could take 18 months and would involve hearings and public comments, said Regulatory Commission of Alaska spokesperson Grace Salazar. The RCA is an oversight agency for the state that performs regulation of utilities and pipeline owners. MEA’s petition was posted on its Web site mid-week.

Salazar said the commission may first hear the matter publicly on Sept. 20 when the panel may open the matter and publish the proposed regulations to begin a public comment period. Any proposed regulations would be sent to the state Department of Law and logged with the state’s Attorney General’s Office. Public hearings are usually held.

Carmody said the process shouldn’t alter any utility’s existing planning processes. “Each utility should continue to pursue their individual power supply plans as the RCA reviews the merits of a traditional G&T for the Railbelt,” he said.

Contact John R. Moses by e-mail at john.moses@frontiersman.com or call him at

352-2270.