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Alaska's electricity supply arrangements, PART 1 OF 3
The huge size of the state and its sparse population give rise to supply arrangements different from elsewhere in the country Alan Bailey for Petroleum News
The vast size of Alaska coupled with its sparse population have given rise to electricity systems that differ significantly from those found elsewhere in the United States. And on Feb. 4 representatives from several electricity utilities talked to the Alaska Legislature's House Energy Committee about their utilities, their operations and the challenges that they face.
Essentially, there are three distinct situations for electricity supplies in the state: the Alaska Railbelt, Southeast Alaska and remote towns and villages in rural Alaska. In the Alaska Railbelt there are three tightly integrated regions: the Kenai Peninsula; the Anchorage and Matanuska and Susitna valleys; and the Fairbanks region. These regions are linked together by single, low capacity transmission lines. Power generation is dominated by fossil fuel power stations, but with some significant hydropower and some wind and solar power. Southeast Alaska is dominated by hydropower. Rural Alaska has isolated low capacity generation and distribution systems with the widespread use of small-scale diesel generation and an increasing use of wind and solar farms.
Part one of this series of articles will cover two of the Railbelt utilities, part two will cover the two other Railbelt utilities, and part three will cover the Alaska Electric Village Cooperative.
In the early years of Railbelt development several different electricity utilities formed to serve different sectors of the region. Over the years these utilities have become increasingly interconnected to form a more integrated electrical system.
Homer Electric Association Keriann Baker, chief strategy office for Homer Electric Association, the electricity utility for most of the Kenai Peninsula, emphasized to House Energy that a primary focus of her utility is the maintenance of reliable electricity supplies in the communities that the utility serves. The utility was formed in 1945, with power supplies subsequently starting in 1950 using a small generator.
Over the years the utility expanded its network to encompass much of the peninsula while also expanding and updating its generation systems and other technologies to include, for example, the Nikiski combined cycle gas fueled power plant in 2014, and, more recently, Alaska's first high speed electric vehicle charging station. In 2022 the utility implemented a battery energy storage system for stabilizing power supplies.
Operating as a member based cooperative rather than a for-profit company, the utility now has about 2,500 miles of power lines serving about 25,000 members over an area of about 3,200 square miles, Baker said. The utility obtains power primarily from three gas-fueled power stations and the Bradley Lake hydroelectric power plant in the southern Kenai Peninsula. The utility also has a small backup generator in Seldovia.
Among the services that HEA provides to its customers are an outage map and an energy calculator, to help people assess the potential power cost impact of new appliances. The utility can also provide a line of credit for the installation of technologies such as solar panels or batteries.
Cost inflation A current challenge results from cost inflation, Baker said. For example, there has been a 400% increase in the cost of computer servers, a 144% increase in the cost of overhead transformers and 100% increase in the cost of copper wire, she said.
And a particular challenge on the Kenai Peninsula has been a huge increase in power outages caused by trees that are outside HEA's rights of way falling onto power lines, Baker said. In addition to power outages, this issue increases the risk of serious forest fires. To address the problem HEA is clearing the rights of way for its power lines and working with property owners to deal with hazardous trees -- many of the hazardous trees are outside the power line easements.
The Kenai Peninsula Borough has been helping with funding to support the tree clearance program, Baker said.
Natural gas availability Another major problem that HEA now needs to address is the availability of the natural gas that fuels the utility's power stations. The supplies of natural gas from the Cook Inlet basin are gradually diminishing. HEA's contract for firm gas supplies from Hilcorp Alaska, the main Cook Inlet gas producer, terminated at the end of March 2024. Since then, the utility has been obtaining its firm gas from Enstar Natural Gas Co. under a new contract with that utility. In addition, HEA has a strategic plan for diversification into different power sources, Baker said. The utility is also looking into upgrading one of its old gas-fueled power generation units and has a power purchase agreement with an independent power producer for 30 megawatts of solar energy.
The objective is to reduce HEA's gas consumption by 21% annually, as well as diversify the utility's energy mix, Baker said.
Golden Valley Electric Association Ashley Bradish, director of external affairs and public relations for Fairbanks based Golden Valley Electric Association, said that GVEA serves more than 100,000 residents along a corridor extending from Cantwell on the south side of the Alaska Range, north through Fairbanks and Southeast to Delta Junction. The utility connects to four military installations, including Fort Wainwright, Eielson Air Force Base and Fort Greely. A group of large industrial members including two mining operations constitute about 47% of the utility's total load, Bradish said.
And the agency manages just under 3,500 miles of power lines, she said.
Adequate generating capacity Bradish commented that GVEA has access to adequate generating capacity to meet its load. The utility has nine generating facilities, including four oil-fired plants in Fairbanks, North Pole and Delta Junction, and two coal fired plants in Healy on the north side of the Alaska Range. Aurora Energy in Fairbanks also provides coal-fired power and steam heat for downtown Fairbanks. Until last month GVEA had a contract with Enstar to obtain 20 megawatts of gas fueled power from Chugach Electric Association in Anchorage, delivered through the transmission line from Anchorage to Fairbanks. GVEA obtains, also through the transmission system, 16.9% of the power output from the Bradley Lake hydropower facility on the Kenai Peninsula. In addition, GVEA has the 25-megawatt Eva Creek wind farm and a very small solar farm.
Current challenges But, although GVEA is in a good position in terms of fuel diversity, the utility's costs do present an issue and a challenge, Bradish said, confirming the inflationary pressures that Brady had alluded to in her presentation. Reliance on expensive and volatile priced fuels such as diesel is also problematic. The decline in Cook Inlet gas production is also hitting GVEA, as exemplified by the recent termination in the utility's contract with Enstar. And, currently, the decline in gas fueled power is being counterbalanced by the use of expensive fuel oil. A current temporary loss of power from Bradley Lake, as a consequence of work on the single transmission line from the Kenai Peninsula, is also hitting GVEA, Bradish commented.
And currently GVEA only has limited capacity to integrate variable energy sources, Bradish said.
Bradish commented that GVEA supports the concept of importing liquefied natural gas to the Cook Inlet as a short-term solution to pending gas shortages, with assessments of the feasibility of building a North Slope gas line as a longer-term possibility. GVEA also supports the potential Dixon Diversion expansion to the Bradley Lake hydropower facility.
Aging infrastructure GVEA also has aging infrastructure that is close to end of life and, thus, will need replacement at significant cost. A recent survey of GVEA members indicated that the reliability of the power supply is the top priority, followed by the cost of the power and then the reduction of carbon emissions, Bradish said.
Bradish also commented on the importance to GVEA of upgrading the transmission system that connects the Kenai Peninsula to the Anchorage area, and the Anchorage area to Healy. The federal government awarded funding support for a new subsea transmission line from the Kenai Peninsula, although that grant requires matching funds. However, an upgrade to the line north to Healy would be of greater benefit to GVEA, Bradish commented.
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