www.AKRDC.org 37 BY TIM BRADNER IN TERMS OF ENERGY, THE ALASKA LEGISLATURE’S BIG SUCCESS FOR 2024 WAS ITS PASSAGE OF HOUSE BILL 307, STREAMLINING THE REGULATION OF ELECTRICAL POWER TRANSMISSION. The bill will be a game-changer for new energy projects along the Southcentral-Interior “Railbelt” energy grid because of Independent Power Producers, or IPPS. That’s because they will be able to sell their power to customers anywhere in the grid without being disadvantaged by differing tolls charged by utilities who own segments of transmission line, which stretches from Homer to Fairbanks. Another important new development is the long-sought upgrade of the Railbelt grid itself with new federal funds. Currently, lack of capacity on transmission lines, some built in the 1960s, limits the efficient movement of power. The combination of these opens up new possibilities for utilities, said Julie Estey, spokesperson for Matanuska Electric Association. That’s because utilities will be able to buy economical power from IPPs, who are typically private sector, as well as other utilities outside their service areas, and from anywhere along the transmission line. With HB 307 and the expansion of the grid itself underway, MEA is now exploring the purchase of more power, Estey said. Most immediately this could come from the privately-owned solar energy project now operating at Houston as well as MEA’s possibly participation, with Anchorage’s Chugach Electric Association, in purchasing power from a large new wind project near Mount Susitna on the west side of Cook Inlet. That wind project is now proposed with a capacity to generate 120 Megawatts of electricity but could be expanded if more power could be sold. Houston solar now has a capacity of six Megawatts. It sells power to MEA at less than what the utility pays for natural gas for power generation. The utilities are discussing a larger second phase with the developer. MEA is working with Chugach Electric to understand how the utilities can manage the variability of more power from both projects. Wind generation can drop, or increase, when wind speeds change. Solar power can drop if clouds obscure the sun. Typically, utilities manage these problems with sufficient backup power from fossil-fuel power generation or with large batteries. The most important part of the new HB 307, meanwhile, is that it will end so-called “pancaking” of tolls for transmission of power along the Railbelt grid. These tolls now vary because utilities that own segments of transmission line have different costs incurred when they financed construction, typically with debt. The cumulative effect of the different tolls can make it uneconomic for a power producer in one area to sell to a customer elsewhere along the transmission line. An example often cited is when Cook Inlet Region, Inc. (CIRI) was unable to sell additional power from its Fire Island wind project near Anchorage to a customer in the Fairbanks area, in the Interior. The additional power sold would have allowed CIRI to increase the number of wind turbines at Fire Island. Under House Bill 307 the state’s Alaska Energy Authority will develop a plan for a uniform toll for power transmission, allowing utilities and independent power producers to have more certainty. The Railbelt utilities will work with the AEA through a finance committee structured like one formed for the existing Bradley Lake hydro project, which is owned by the AEA with its power purchased by utilities. The “Bradley Lake model” for collaboration between utilities and the AEA has been highly successful over the years. Developing new sources of energy for Southcentral Alaska communities is vital. That’s because natural gas production in Cook Inlet, which now fuels space heating and most power generation in the region, is expected to decline beginning in 2027, according to studies by the Alaska Division of Oil and Gas. NEW LAW TO DIVERSIFY STATE’S ENERGY SUPPLY VOLUME 1 | ISSUE 2 | SUMMER 2024 — JUNEAU, ALASKA — AVAILABLE STATEWIDE operations@coastalhelicopters.com 907-789-5600 www.coastalhelicopters.com ✓ CONSTRUCTION ✓ EXPLORATION ✓ CONTRACT ✓ SUPPORT ✓ CHARTER
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