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The challenges of rural electricity
In rural Alaska small remote communities still depend on expensive diesel generation although wind and solar use is growing - Part 3 of 3
Alan Bailey for Petroleum News
On Feb. 4 Bill Stamm, president and chief executive officer of Alaska Village Electric Cooperative, talked to the Alaska Legislature's House Energy Committee about the challenges of providing reliable and affordable electricity supplies in remote rural communities in Alaska. The talk came in conjunction with presentations by electric utilities in the Alaska Railbelt, where the electricity supply situation is very different from in isolated rural villages and towns. Parts one and two of this three-part series covered the presentations by Railbelt utilities. This third part covers Mr. Stamm's presentation.
AVEC operates as a cooperative and serves 58 rural communities, mostly scattered across the western side of the state, more than 250 miles from the Railbelt.
"Our primary role is to provide safe, reliable power at an affordable rate, and we are owned and operated by the members we serve," Stamm said.
The utility's annual revenue in 2023 was $74 million, with the sale of 126.3 megawatts of electricity across all of the communities that the utility serves.
Reliance on diesel fueled power Rural communities still depend heavily on diesel fueled power generation, typically with three or four generators situated in a single building. Most of AVEC's communities operate a single generator at any one time but have additional generators to act as backups and to ensure the ability to support varying loads, Stamm said.
The use of diesel generators requires the importing of fuel, to ensure that each power system has sufficient fuel to last through the year, he added.
Stamm said that there are two or three primary fuel vendors for western Alaska, but just two of these serve the smaller communities. Essentially, while a tanker works its way up and down the coast during the open water season, smaller barges ferry fuel from the tanker to the communities. AVEC's strategy is to stock each community with a 14-month fuel supply, in case a delivery is missed in the spring or fall. Barge delivered fuel costs $3.50 to $4.50 per gallon, but if the fuel has to be delivered by air the cost is $10 to $11 per gallon, Stamm said.
That translates to a cost of $25 to $35 per Btu of energy for barged fuel and around $80 per Btu if fuel is delivered by air. This compares with a current cost of just under $10 per Btu for power in the Railbelt, potentially increasing to $14 or $15 in the future, Stamm said.
Maintenance challenges Maintaining the electrical system for a community can be challenging, given the general absence of heavy equipment such as bucket trucks, with linesmen having to climb every power line pole when conducting repairs or hooking up services. Moving heavy equipment may have to be done by pulling, using a block and tackle, four-wheeler or a snow machine. An AVEC "line truck" may consist of a sled towed by a snow machine.
Another challenge is the age of much of the equipment. Fuel storage tanks, for example, may have been purchased many decades ago, with some of them not being replaced or brought up to code.
Stamm also commented that in the past 10 years there has been a significant change in the availability of line workers for conducting repairs and dealing with power outages in rural Alaska. While most of these workers used to live in Alaska, most of them now live out of state. They come up to Alaska to work for a while and then return home, he said. As a consequence, AVEC only has a limited number of people to conduct repair work and the utility has to continuously fly people around between communities. Consequently it can take up to five days to deal with a power outage, Stamm said.
Power supply arrangements for New Stuyahok As an example of how rural power supplies typically work, Stamm talked about the electricity system in New Stuyahok to the west of Lake Iliamna. The average load from the community is about 300 kilowatts, with a peak load of perhaps around 450 kilowatts. As in many Alaska rural communities, the primary source of power demand is the village school, Stamm commented. Electricity demand comes through 150 electric meters that AVEC is responsible for serving.
Tank farms store the diesel fuel and gasoline that the community needs, including AVEC's tanks to support its diesel power generation. AVEC's power plant has three diesel generators and the necessary control system. Three transformers are mounted at the plant, plus a fourth transformer as a spare.
The utility has modified the diesel engine cooling systems to share the heat across the engines and to use excess heat to heat the living quarters and also transfer some heat to the school. In some communities, heat from the diesel generators is shared with the community water and sewer facilities, Stamm said. And in 2017 AVEC built an 8-mile power line from New Stuyahok to the neighboring village of Ekwok, so that Ekwok's power plant can operate in standby mode, thereby improving the overall efficiency of the power supply arrangements.
Also, in the last year and a half AVEC has been selected for infrastructure funding to install a solar power system and battery storage facility at New Stuyahok, Stamm said.
"This system, once it's fully completed would allow us during summer days at times to go completely diesels off," he said.
And the installation of solar arrays in small communities has the potential to displace 10% to 15% of diesel generation, he added.
Support across multiple communities Stamm said that, across the 58 rural communities that AVEC serves there are 46 power plants with a total of 170 diesel generators, including standby generators. Diesel fuel consumption amounted to 9.3 million gallons in 2023. However, the utility also operates 13 wind sites with a total of 33 wind turbines serving 22 communities. AVEC has the largest number of wind farms of any cooperative in the United States, Stamm said.
Nevertheless, more than half of the utility's annual revenue is used for the supply of diesel fuel to the communities that the utility serves. The cost of power ranges from 50 cents per kilowatt hour for some communities to more than $1 per kilowatt hour for others. And while, except for the town of Bethel, AVEC spreads its non-fuel costs across its members through a postage stamp rate, the cost of the diesel fuel for a community is passed through to that community as a kilowatt hour charge associated with the electricity that the community uses.
Renewable energy sources Stamm said that AVEC started incorporating renewable energy sources into its generation portfolio in 2000 and has been installing two or three wind turbines in each community. Although the turbines have been relatively small at around 100 kilowatts, the utility has started installing 900 kilowatt units in larger communities such as Bethel that can support them. It has been possible to displace 30% to 40% of the diesel fuel usage in communities where wind turbines have been installed, as a direct consequence of support from Alaska's Renewable Energy Fund, Stamm said.
However, although the use of renewable energy can reduce the use of diesel fuel, there is no scenario for the near future that would eliminate the shipment of some diesel fuel to the rural communities, Stamm commented.
The power cost equalization program Stamm also commented that more than 180 rural communities qualify for Alaska's power cost equalization program, the state's funding program for reducing rural residential power costs. A number years ago, given the impracticality of providing funding for some energy project that would support all of the rural communities, the state established an endowment that would help equalize the cost of power for the rural communities at a level commensurate with the average cost of power in Juneau, Anchorage and Fairbanks, Stamm said.
At the same time, AVEC is trying to reduce the cost of power for its members through a number of strategies, including improved generation efficiency; minimizing distribution losses; interconnecting multiple villages; and adding renewable energy power generation coupled with energy storage, where possible, Stamm said.
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