Anchorage and the rest of urban Alaska are facing a natural gas supply shortage, and fears are rising about how the region will secure reliable access to fuel to heat homes and generate electricity.
Consumer advocates and environmental groups say one way to reduce the state’s dependence on natural gas is through something called a “renewable portfolio standard.” That’s a mandate that Alaska’s electric utilities generate a certain amount of power from renewable sources.
Freelance journalist Nat Herz, at his publication Northern Journal, has been reporting about state lawmakers’ efforts to craft such a mandate. But Herz says the proposal has stalled at the Alaska Capitol amid intense opposition from utilities.
Nat Herz: Yeah, so we pay pretty high prices for our natural gas-generated power here on the Railbelt. And in a few years, the big natural gas company that operates in Cook Inlet, Hilcorp, has said, “Look, you guys are essentially out of gas that we can find in a way that doesn’t cost more money than anyone is going to want to pay for it.” And so there’s kind of this natural gas cliff that we may fall off in a few years where, all of a sudden, we are either going to have to generate power in some other way or we’re potentially going to have to pay a lot of money to import natural gas in liquefied form in tankers from outside the state.
So one thing that folks think we could do about that is find ways to reduce our dependence on natural gas, such as by installing large amounts of wind, solar, hydroelectric, other forms of renewable power. But there’s not a lot of confidence by these advocacy groups that utilities are going to do this on their own. And so one way that they have tried to encourage this to happen is through what’s called a “renewable portfolio standard.” And that is essentially a piece of legislation that would require utilities to generate a certain amount of power from renewable sources by a specific time.
Casey Grove: And here in Alaska, there was a renewables bill in the legislature last year. Tell me about that.
NH: What’s interesting is that Republican Gov. Mike Dunleavy was the one who proposed this renewable portfolio standard to require the utilities to generate 80% of their power from renewable sources by 2040, which is a pretty quick turnaround, given that they generate about 20% right now. But the governor’s bill didn’t really seem to get anywhere. And we obtained some emails through public records requests that showed that the deputy that Dunleavy assigned to carry the bill through the Legislature, Curtis Thayer, who heads the Alaska Energy Authority, the emails showed that he actually was working behind the scenes early on, as the legislation was being developed, to try to make the legislation a little bit more palatable to the utilities, which were objecting to the pace and the high degree of renewables adoption that was originally put in the bill. And through the legislative process, last year, the legislation was kind of amended, to allow sources like nuclear power, for example, also to maybe push off the implementation by about 10 years to 2050. But ultimately, the bill never passed, and it died at the end of the legislative session last year.
CG: Am I getting this right, that the concerns about putting more solar, wind, other renewable power sources onto the grid, those concerns are that that will raise electricity prices or affect reliability? What do we actually know about that?
NH: You know, what’s interesting is that they are actually very, very, very different analyses of, is this going to cost more money? Because the price of renewables has just gone down so far in the past, you know, five ,10, 15 years. And so the utilities say they’ve got some models that suggest that moving to renewables in the way that the governor’s legislation last year wanted would drive rates up by as much as 15%, 20%, 25%. There’s another analysis done by a credible independent energy analyst that shows actually the the cost of building all of the renewable stuff would be far smaller than the fuel savings that would result in not having to buy natural gas to feed our natural gas power plants. There is a more authoritative study that’s expected out from the National Renewable Energy Laboratory that was commissioned by the governor’s office that should actually sort of put this debate to rest. But it’s not done yet, so we don’t really have the information. And it’s really become a kind of point of debate, as lawmakers have considered this proposed legislation.
CG: So the debate has not been laid to rest this point. Where does this proposal stand right now?
NH: Yeah, so the governor did not reintroduce this bill this year. I interviewed him about this, and he basically said, “I had too much other stuff on my plate. I was proposing legislation to monetize Alaska’s forests. I appointed a clean energy task force.” The governor said he was waiting for legislators to likely introduce it. There were a couple of them that did ultimately propose a bill, but it took them two months into the legislative session. They basically started from square one without all of these items that had been previously added at the request of the utilities, like including nuclear power in the renewables category, like delaying the implementation. So now they’re kind of starting through the legislative process again.
But meanwhile, we’ve gone another two years, basically, since the governor introduced his first proposal, where we’ve been, you know, using that dwindling supply of natural gas in Cook Inlet without a clear solution of what we’re going to do when that gas is no longer available and without really a whole lot of obvious urgency and new projects being announced by the utilities. So there’s some pretty big questions about how this is all going to play out.