LEGISLATIVE NEWS RELEASE: New Bills Seek Savings for Electricity Along Railbelt

SB105 and HB187 would create the Railbelt Electric Transmission Authority

FROM ALASKANOMICS: 

Update on the Alaska LNG Project– Anchorage Make it Monday Forum

Posted: 13 Apr 2015 04:16 PM PDT

The companies working on the Alaska LNG project are working hard to keep the project rolling through the next stage. In the summer of 2015, there will be continuing fieldwork as the project prepares for the Environmental Impact Study (EIS). The Federal Energy Regulatory Commission (FERC) will conduct one EIS for the project that will be accessible to all federal agencies. A 550-800 acre land acquisition is in the works to provide space for the liquefaction plant and marine terminal in Nikiski. The US Coast Guard is also working on the Cook Inlet Waterway Suitability Assessment that will be needed for the project to proceed. Community meetings are continuing at all levels of the project. FERC has opened a 9-month scoping period for the public to bring forward their concerns and questions about the project.

The Legislature and the Governor are locked in a battle over Alaska’s future for LNG. Governor Walker wants the Alaska Gasline Development Corporation (AGDC) to move forward on a project with a higher volume pipe, as an alternative to the AK LNG project. He states that it is good to have alternatives to make sure LNG is viable in Alaska. The Legislature wants to pursue only the AK LNG project and feels that splitting focus will create market confusion and instability in the Alaska oil and gas industry. Anchorage Chamber of Commerce Make it Monday Forum Presenter Larry Persily noted that he felt that AGDC was like a child in the middle of a highly contested divorce/custody battle. The internal battle between the Governor and the Legislature continues to cause frustration for many working on LNG in Alaska.

There are reasons that the AK LNG project could fall apart as well as reasons for optimism that it will continue and become a reality. The global demand for LNG could come up short, Alaska’s competitors could beat us on price, Russia could pull Asian markets to their product, and Alaska politics could get in the way of success for the project. However, there are still reasons to be optimistic moving forward. Alaska’s LNG has high BTU content, we have proven reserves with no exploration work needed, we are a proven supplier, and Alaska is the shortest distance to Asia from the other North American markets.

AK LNG will continue to move forward in their work and the Governor and the Legislature will continue their battle through the end of session next week and beyond. There will be many more discussions on this in the coming months and even years.

JUNEAU-Two bills have been introduced this week to help reduce electricity costs for a majority of Alaskans by creating the Railbelt Electrical Transmission Authority (RETA) to manage electrical transmission along the Railbelt.  The Railbelt is Alaska’s largest interconnected electric transmission area and home to the largest population centers: from Fairbanks in the north through the Mat-Su Borough, Anchorage, Seward and Homer in the south.  

The House Special Committee on Energy, co-chaired by Representatives Liz Vazquez, R-Anchorage, and Jim Colver, R-Palmer introduced House Bill 187 on Friday, while Senator Lesil McGuire, R-Anchorage, introduced its companion bill, Senate Bill 105, in the Senate on Saturday.  

“Historically, we have had three generation and transmission (G&T) utilities along the Railbelt which had regional responsibility and voluntary compliance,” said Senator McGuire.  “Now we have five G&T utilities, each with their own regional challenges that cannot be resolved with the current structure.  We need to find a way to establish predictable, reliable and affordable economic dispatch across the Railbelt with open access policies for independent power producers.  There are tremendous savings possible for the consumer with a unified transmission system.” 

“Delivering affordable energy efficiently is absolutely crucial for Alaskan families and for our state’s economic development – and our Railbelt grid needs to be up to the task,” said Representative Liz Vazquez, R-Anchorage.  “As a former utility board member, I’ve seen this problem first-hand, and we’ve been working very hard this session to start developing a long-term solution. These bills are the first step in solving the problem and bringing affordable energy efficiently to the Railbelt.”

The legislation proposes the Railbelt Transmission Authority would be a division of the Regulatory Commission of Alaska (RCA) which is currently the agency that oversees and regulates Alaska’s utilities.  Several similar concepts have been proposed by various utilities in recent years including the Alaska Railbelt Cooperative Transmission and Electric Company (ARCTEC) and Transco (a Railbelt transmission company).  Though ownership structures differ in all three proposals each have similar goals: economic dispatch of electricity across the Railbelt, open and non-discriminatory access, regional planning of future transmission infrastructure and reduced end-user costs. 

“It is important to state that this bill is a starting point,” said Representative Colver. “We are starting a conversation that I hope results in a more efficient use of our power generation and transmission systems on the Railbelt.  Our goal is to lower the costs of energy to consumers.  I look forward to working with the RCA and engaging with all stakeholders.”

The sponsors of the legislation do not plan on advancing the bill during the current legislative session, but plan to hold meetings over the interim to further develop the plan in preparation for next January.

For more information, please contact Josh Walton in Representative Liz Vazquez’s office at 907-465-3892, David Scott in Representative Colver’s office at 907-465-4859, or Jesse Logan in Senator McGuire’s office at 907-465-2995.