Alaska s Electric Energy Providers

Transcription

1 Alaska s Electric Energy Providers Delivering Vital Service to our Communities Lunch & Learn by the Alaska Power Association Managers Forum for the House Special Committee on Energy January 29, 2014

2 Introduction Alaska Power Association Statewide electric utility trade association Electric cooperatives, municipal utilities, joint action agencies and investor-owned utilities Alaska Power Association Managers Forum Co-Chairs Bradley Evans, CEO, Chugach Electric Association Clay Koplin, CEO, Cordova Electric Cooperative 2

3 Introduction One size does not fit all Overarching issues for Alaska electric power Transmission infrastructure Weak Railbelt grid Most of the state not interconnected High cost of fuel Regulatory challenges Overreaching Federal environmental regulations 3

4 What will be covered Western and Interior Alaska 4

5 Southeast Trey Acteson, CEO Southeast Alaska Power Agency (SEAPA) 5

6 Southeast Primary goals Provide safe, reliable, and affordable power Displace diesel generation with lower cost alternatives Develop renewable energy resources to meet load growth and storage needs Extend regional interconnection Cultivate sustainable communities Rate stability 6

7 Southeast Key issues and cost drivers Small isolated loads, small rate base Some communities 100% diesel generation Large increase in electrical heating loads Rugged terrain and water crossings No single solution for the region Regulatory hurdles and Roadless Rule Hydro project selection and development Inflow volatility Lack of storage High fuel costs 7

8 Southeast Recommendations Accelerate and expand State energy programs Investment in our power infrastructure will reduce the need for funding in other areas Build storage capacity Extend transmission Increase fuel diversification Promote viable new projects Dedicate necessary resources Partner to share risk 8

9 Southeast Summary Safe, reliable and affordable energy is the Cornerstone of Sustainable Communities Power providers are proactively seeking innovative and cost conscious solutions to meet the needs of our customers Renewable energy development and additional transmission interconnection is the best long-term solution for our region Joint funding strategies will be necessary to effectively advance this effort State energy programs are making a difference 9

10 Copper River, Coastal and Kodiak Clay Koplin, CEO, Cordova Electric Cooperative 10

11 Copper River, Coastal and Kodiak Primary Goals Hydro-diesel and hydro-wind coordination (energy and power storage) More renewable energy (CVEA Allison, Kodiak Wind, Kodiak Terror #3, Kodiak Battery, Kodiak Flywheel, CEC Crater Lake, CEC Snyder Falls, incremental Stable Prices 11

12 Copper River, Coastal and Kodiak Key energy issues and cost drivers High cost of fuel High cost of new generation No interconnection to others Thermal heating Technical challenges 12

13 Copper River, Coastal and Kodiak Suggestions/Solutions Public-private partnerships Innovation Energy storage Fuel alternatives - LNG 13

14 Railbelt Bradley Evans, CEO, Chugach Electric Association 14

15 Railbelt Regional overview Six retail utilities (4 co-ops, 2 munis) Plus military & university ~850 MW peak load Generation mix Interior: coal, gas-fired purchased power, hydro, fuel oil and wind Southcentral: natural gas, hydro, wind, some fuel-oil backup The Railbelt electric utility situation is changing as longstanding power sales agreements come to an end Utilities need to find new ways to work together on behalf of their customers 15

16 Railbelt Key issues and cost drivers Transmission congestion Capital investments underway Utilities have and are making major investments in replacement generation Fuel has a big impact on the cost of electricity Grid unification and economic dispatch would benefit the region 16

17 Railbelt Path forward Create an Independent System Operator Provide non-discriminatory open-access transmission Enforce reliability standards Ensure transmission upgrades Manage generation interconnection Administer a universal tariff Manage transmission congestion Facilitate economic dispatch Continue efforts to ensure gas supply 17

18 Railbelt Summary Once-in-a-generation power plant construction nearing an end Railbelt transmission system needs to be planned and economic generation operated for the maximum benefit of customers Reliability must be maintained Transmission bottlenecks need to be addressed Economic renewables need access to the grid Fuel supply and costs remain issues More hydro will benefit the region 18

19 Western and Interior Alaska Meera Kohler, President and CEO, Alaska Village Electric Cooperative 19

20 Western and Interior Alaska Regional Overview 2011 Alaska Power Statistics 146 Utilities 66% of state 24,727 Customers 7.6% of state 283 million kwh sales 4.5% of state $141 million revenue 50 cents/kwh Small utility rates (AVEC) 58 cents/kwh Diesel 96%, wind/hydro 4% 20

21 Western and Interior Alaska Key issues and cost drivers Size of power plants (<1 MW) Low generation efficiencies Hub communities ~15 kwh/gallon Small communities ~13 kwh/gallon Micro communities ~11 kwh/gallon Lack of technical resources manpower High cost of fuel Alternative technologies too expensive to operate/maintain Widespread contaminated site/metal debris problem Lack of capital for renewals/overhauls Dependence on State for technical support 21

22 Western and Interior Alaska Recommendations PCE program is a critical lifeline Tweak statute/regulations for wind to heat 1-2% of Endowment Fund for Interties? Investment in interties vs. power plants/tank farms Discourage second bite at the apple Promote shared services Schools, clinics, airports, utilities Launch comprehensive contaminated site clean-up Continue and grow Renewable Energy Fund program 22

23 Western and Interior Alaska Summary The high cost of energy (heat and power) is crippling rural Alaska PCE is helping make ends meet but tweaks are needed Connecting villages must be made a top priority Foster competence! Renewable investments are making inroads Feasibility improves with larger loads Optimize recovered heat/wind to heat applications Fund street light conversion to LED 23

24 Northwest Arctic and North Slope Brad Reeve, General Manager/CEO, Kotzebue Electric Association, Inc. 24

25 Northwest Arctic and North Slope Regional overview Electric accounts: 5,382 Primary generation fuels: Diesel, natural gas and wind 25

26 Northwest Arctic and North Slope Key energy issues Liquid fuel transportation Lack of interconnection High cost of diesel Thermal heating cost ($6-$11/gal.) Fuel cost drivers Lack of competition Group purchasing Western Alaska Fuel Group NWASD/AVEC - joint fuel purchase Possibly piggyback with Red Dog 26

27 North Slope and Northwest Arctic Suggestions/Solutions State energy programs Renewable Energy Grant Fund Power Cost Equalization AHFC Weatherization and Home Energy Rebate programs Future possible actions Natural gas drilling tax initiatives Road construction to Ambler mining district New technology appropriations Battery energy storage investigation 27

28 North Slope and Northwest Arctic Summary Projects making a difference Solar Thermal Elders Homes EETF Organic Rankine Cycle REF Kotzebue Electric Wind Expansion REF Battery project REF Excess wind to heat (Marriott Hotel) - REF Buckland Wind Expansion - REF Deering Wind Expansion REF EcoCyle 20 kw Demonstration EETF Smart Grid Project DOE/NRECA Solar for W & S Systems REF Buckland LED Street Lights - EECBG 28

29 Summary Your industry is focused on the cost-quality-clean balance of electricity One size does not fit all Localized challenges and opportunities Overarching issues Transmission, high cost of fuel, overreaching federal regulations We evaluate all options and welcome any solutions that improve the cost of power in our communities 29

30 Questions 30