Railbelt energy firms have big job ahead

For the first time in many years, the Railbelt electric utilities are pulling together to clear huge hurdles in delivering reasonably priced, reliable power to Alaska. Dwindling and more costly fuel supplies, aging generation units and inadequate transmission lines, new power supply systems and contracts and financing for all of these are the challenges facing managers of electrical utilities. In a concerted effort today, we collectively are addressing issues that I began to raise almost 10 years ago.

As a manager of an electrical utility we need the assurance of 10- to 20-year contracts for a fuel supply. We are now looking at about three years supply on contract with our power provider. Fuel supplies in the Cook Inlet area have reached a point that utility managers are anticipating having to import LNG to provide a supply of gas for generation of our electricity and perhaps heating our homes. Banking on a North Slope pipeline will not save our bacon in time. MEA and others are now exploring storage facilities in the event that gas supplies must be imported.

In addressing the uncertain future of our generation and transmission systems, the Alaska Energy Authority (AEA) staff drafted House Bill 182. As it moved to the floor of the House, the bill garnered little support from electrical utility managers and legislators themselves. Almost a year ago, an ad hoc group of Railbelt board members formed a task force to correct shortcomings in the bill and craft the Greater Railbelt Energy and Transmission Corporation (GRETC) entity to deal with future generation and transmission issues.

In the past few months the ad hoc committee has diligently worked on re-writing the legislation. The “GRETC task force” participants are Railbelt board members who are drafting the new wording. Interest and attendance has been strong. The near 100 percent participation and attendance of the MEA board speaks volumes, saying “our board is informed and ready to step up to plate” to find answers. Our community should be proud of a job well done by board members Lois Lester, Janet Kincaid, Larry DeVilbiss, David Glines, Kit Jones, Peter Burchell and Katie Hurley. Their diligent work on the task force was finalized Jan. 21 and the revamped bill will be submitted as a committee substitute for the original HB 182.

With the passage of GRETC, a separate corporation would be formed providing centralized economic power dispatch in the Railbelt. The corporation could pursue a gas aggregation concept to resolve the gas shortfall problem. The aggregator would takes bids from individual members, then tally the totals, then purchase the supply needed from producers or even resort to importing enough LNG to fill the order. The obvious benefit to consumers is that fuel supply and deliverability issues would be solved and the reliability of power and the reasonable purchase price of electricity would flow to the consumers.

As a backup plan should GRETC fail in the legislature, MEA and Chugach developed a fall-back organizational concept for the future — to create a generation and transmission organization to serve at least our areas. MEA currently holds an all-requirements contract with Chugach, which provides power to cover all our electrical needs.

That contract expires in 2014, requiring a transition from that contract to the fall-back organization if GRETC doesn’t work. With the prospect of the Knik Arm Bridge crossing, a new high-capacity port, and an explosion of homes and businesses in the Point MacKenzie area coupled with our economic hurdles, MEA is challenged to deliver reasonably priced and reliable power.

Staying diligent, working hard and being proactive now is our only possible venue for our future electrical power. As your new general manager, I fully intend to do just that. Failure at this task is not an option for our members-customers or me.

Joe Griffith is general manager of the Matanuska Electric Association.