Railbelt Electric Companies May Undergo Changes

Alaska’s Railbelt electric companies are the sole users of the state’s main transmission lines that carry energy from the Bradley Lake hydropower project in Homer north to Fairbanks. But changes are coming. Managers of the state-owned portion of the line – called the Alaska Intertie – want to give independent power producers access to the system and some power company officials want to bring the entire grid under a single owner – operator model.

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 Bradley Lake’s 120 megawatts of electricity transmits through two 20 mile long lines that connect to the state’s main power grid. The power thrums Northward, electrifying Clam Gulch, Kenai, Soldotna and on up to Anchorage, where electricity from Chugach Electric’s gas fired Beluga generation plant ties in. Then power flows through the Matanuska Valley, and on to Healy.   The line’s full length is divided into segments, each owned and operated by a different power company.

 In late December, the Alaska Energy Authority, which owns the Alaska Intertie, the segment that links Willow and Healy, announced a plan to allow independent power producers to access the line. Gene Therriault, AEA’s deputy director, says, the open access move anticipates future need.

“The demand or the search for cheaper sources of power may lead people to link up their demand with a source. And so we just want to stay ahead of the curve, and make sure that we’ve some languguage and a general understanding of how the governments would be operated if in fact somebody came in and made a bid to get someone into the system. “‘

 The open access plan is pending before the state’s Regulatory Commission. Joe Griffith, general manager of Matanuska Electric Association, says independent producers, such as alternative energy providers, or producers of any source of power, want access to reach customers, but newcomers need to help payback what established power companies have spent on building and maintaining the lines

“Part of the assertion has been that they can’t get access to the customers over the transmission system. The difficulty is caused by the fact that most of the transmission in the Railbelt is privately owned, and the owners expect to be reimbursed for the use of it. “

 Griffith spoke at a panel discussion regarding Alaska’s energy needs in Anchorage recently. He says that the real problem is the patchwork of utilities involved in electricity’s transmission.  Currently, Griffith also heads ARCTEC, the Alaska Railbelt Cooperative Electric and Transmission company, which is composed of four Railbelt utilities

 “The intent of ARCTEC was to become the generation and transmission provider of the railbelt.”

 ARCTEC’s goal is to create a single operator for the entire transmission network from Homer to Fairbanks. But there’s a rub. All six power utilities have to sign on to the idea, and only four of them belong to ARCTEC.  Homer Electric and ML&P are not members.

 Griffith says a single operator – or a so – called TRANSCO model, would save consumers huge amounts of money.

“And the single operator puts in literally one office. Some of these TRANSCOs in the Lower 48 are three or four people is all. And they just look at the generation on line and say the next most costly piece to bring up is here, and they just call up somebody’s generation plant and say ‘deliver me X megawatts.”

 Last year, AEA did a study on transmission upgrades and  just how much money would be saved by eliminating the conflicts and duplications of multiple operators along the transmission line.  Joe Griffith says the study shows savings of 100 million dollars a year.

“But the TRANSCO we are talking about would be the single operator of the entire Railbelt transmission system. And, in effect, each of the utilities that own transmission systems would just simply sign it over to this group to operate it through operating agreements similar to agreements we have done on the North Slope with the oil companies. “

 Griffith wants ARCTEC to be that single operator. He says it will take some work to figure out the financial aspect, but it can be done

“If you created your TRANSCO today, you would simply assign a cost, probably be a postage stamp type rate over the whole system and say ‘anytime you have power flowing on the transmission system here, here’s what you pay.’ And then the TRANSCO would turn around at the end of the month and send a check to each utility who’s transmission system they
used. “

 Therriault says AEA is not opposed to a TRANSCO model

 “There is sort of a growing realization that the overall system could operate more efficiently. With increases or investment in the intertie system, there would be tremendous savings for the overall consumers in the Railbelt, if we were actually able to get to a system with some real streamline operation.”

 Now that AEA is opening access to the Alaska Intertie, all the utilities along the Railbelt may follow suit, Therriault says. And he says, the open access language before the RCA provides reliability standards and an allocation of costs for newcomers.