Study could force MEA into holding pattern

July 17, 2007

By Russell Stigall/Frontiersman

MAT-SU - An upcoming Railbelt study could take the steam out of Matanuska Electric Association's plans to build electric generation in the Mat-Su Valley.

With its $800,000 Unified Systems Operations Project the Alaska Energy Authority plans to recommend the level of collective planning, operation and ownership of Railbelt network assets, said Jim Strandberg, unified systems operations project manager.

&#8220A 25-year hard look at the network - it has been a long time since we've done something like this,” Strandberg said.

The study is set to begin at a technical conference in Anchorage in October. The Alaska Energy Authority plans to have a draft report prepared by the beginning of the 2008 legislative session.

As the study is being launched, Gov. Sarah Palin is calling for cooperation and big-picture plans for the electric cooperatives along Alaska's Railbelt. Palin recently denied Matanuska Electric Association's $26.5 million Railbelt Energy Fund allotment to await findings from the Unified Systems Operations Project. The appropriations were designated for infrastructure improvements and a new transmission line.

&#8220Today, the geography, population base and economies of scale in the Railbelt lend themselves to a more big-picture approach as we move forward to face these challenges together,” Palin has said. &#8220I believe the best solution lies in long-range collective planning for the development of energy projects that will serve the Railbelt region.”

Palin called for more cooperation among Railbelt electric utilities on mega-projects like the Fire Island Wind Project.

The study could also affect Matanuska Electric Association's plans to build new generation capacity in the Mat-Su Valley. The co-op is pursuing building a 100-megawatt coal-fired power plant and a 100-megawatt gas-fired power plant. A private group headed by business developer Mark Marlow also has plans for building a natural gas-fired cogeneration plant on part of the state fairgrounds in Palmer and converting the old Knik Arm power plant from coal to natural gas.

The impetus behind the study comes from environmental concerns and an increasing uncertainty in the price and quantity of fuel available for rail belt electric generators, Strandberg said.

&#8220Fuel and environmental concerns are the main drivers in the world right now,” he said, adding the Railbelt study will look at emerging technologies in electric generation with renewable resources. &#8220My expectation is people are going to want to talk about wind energy and storage-type hydroelectric projects.”

With the Lake Chackachamna hydroelectric project, Mount Spurr geothermal project, wind resources and potential unexplored gas reserves, Cook Inlet power resources have the potential to address the Railbelt's fuel source and environmental concerns, Strandberg said.

The Railbelt is primarily energized by abundant, inexpensive natural gas from the Cook Inlet Beluga fields. The natural gas power is supplemented with stored hydroelectric, coal and diesel power. With 530 megawatts of natural gas-fired generation capacity Chugach Electric Association has been the primary power provider for MEA, Homer Electric Association and Seward Electric Association, according to CEA's Web site. MEA and HEA have expressed intent to end the co-ops' wholesale power contracts with CEA by 2015.

The Railbelt fund was started in 1985 to provide financial assistance to electrical projects in Railbelt communities. The Railbelt has six electric utility co-ops. Of these, MEA is the only without its own generation capacity.

Railbelt utilities include Golden Valley Electric Association from Fairbanks to Healy, Matanuska Electric Association from Talkeetna to Eagle River, Copper Valley Electric Association from Glennallen to Valdez, Municipal Light and Power in Anchorage, Chugach Electric Association, Homer Electric Association and Seward Electric Association. These Railbelt cooperatives are linked by the high-voltage Intertie power line.

Micheal Janecek, a former MEA board member, is asking MEA's board of directors to halt plans to build a 100-megawatt coal-fire plant and a 100-megawatt gas-fired plant until results of the study are known. Janacek is also urging the board send representation to the October meeting of the Alaska Energy Authority and the Railbelt electric utilities.

Lorali Carter, MEA spokesperson, said the co-op plans to attend the Railbelt meeting in October; however, the Alaska Energy Authority has yet to explain what role MEA would play in the study.

"I don't see why we wouldn't," Carter said.

The Alaska Energy Authority held a meeting of the managers of the Railbelt electric utilities in February. Managers for Homer Electric and Matanuska Electric did not attend. For the October meeting, Strandberg said he hopes to get as many representatives of the utilities' stakeholders as possible to review the scope of work.

&#8220We don't have the ability to require them to show up. The whole approach is voluntary, but there is a definite need of cooperation,” Strandberg said. The technical conference is an opportunity to bring together people who don't normally talk. It will be an opportunity to share information.

The study, modeled on the Alaska-British Columbia Intertie study, will include co-op stakeholders, local government officials, state Senators and Representatives who will naturally have an interest in this issue.

Contact Russell Stigall at 352-2267 or russell.stigall@frontiersman.com.