Just a fifth of the electricity produced on Alaska’s Railbelt today is generated from renewable sources. The rest comes from fossil fuels, primarily natural gas. But with a looming natural gas shortfall on the way, clean energy advocates want to give Railbelt utilities a strong push to boost renewables and ease the reliance on natural gas.
Last week, the state’s largest utility, Chugach Electric Association, endorsed the plan.
SB101, a bill introduced last year by Anchorage Democratic Sen. Löki Tobin, would establish a renewable portfolio standard, or RPS.
The bill has support from lawmakers across the political spectrum, Governor Mike Dunleavy, and renewable energy advocates, though in recent years it’s faced pushback from utilities who say a mandate is unnecessary.
The RPS is a set of benchmarks that would require Railbelt utilities to ramp up renewable energy generation. The bill proposes a standard to ensure 25% of Railbelt power is generated from renewables by 2027. It aims for 80% renewables by 2040.
“It’s a matter of it being time for the transition,” said Sam Cason, chair of the board of Chugach Electric Association, Alaska’s largest utility. “And that’s what we’re looking at, is a transition here.”
Last week the Chugach board passed a resolution in favor of a renewable standard, a win for renewable energy advocates hoping to get the standard passed this legislative session.
Cason said the board supports a standard but still has some remaining reservations about the legislation, including how its target dates will be set.
“We don’t think it’s perfect,” Cason said. “But everyone tells us that an RPS will help us get the price down, it will demonstrate to the market that Alaska is serious about making a timely transition and hopefully get us bids for renewables that vindicate that.”
The utility currently generates about 18% of its power from renewable sources.
Chugach is the only Railbelt utility that has publicly backed a renewable standard so far.
Gov. Dunleavy introduced a similar RPS bill in 2022, citing the need for cheap, secure electricity amid rising natural gas prices. Last year The Northern Journal reported that utilities like Matanuska Electric Association opposed the idea of a renewables mandate. Dunleavy’s bill ultimately never made it to a vote in either chamber of the legislature.
A recent statement from Golden Valley Electric Association’s board said the short-term targets in the new RPS bill are unrealistic and the timeline should be extended. The utility, based in Fairbanks, also opposed penalties the bill outlines for utilities that don’t meet targets after the first year. GVEA’s board chair Tom DeLong did not respond to a request for comment.
Cason said he’s heard the same concerns from other utilities and thinks they deserve discussion.
“There needs to be flexibility, there needs to be room at the table for everyone to express their concerns, their beliefs and their findings of what we can do to be timely and reach realistic goals,” he said.
The way the bill is written, utilities may be fined for not complying with the standard, but that money can be rolled back into renewable energy projects and energy efficiency updates. The bill includes many exemptions for noncompliance fines, including for extreme weather, natural disasters, or a global pandemic. Fines also wouldn’t be issued for the first year of the legislation.
Both the Chugach and GVEA boards’ statements recognize the importance of ramping up renewables now, as the Railbelt is staring down an impending natural gas shortfall.
Importing liquified natural gas from Canada already appears to be a likely — but expensive — option in the future, said Chris Rose, executive director of Renewable Energy Alaska Project.
“We are going into some uncharted territory here with the imports of LNG on the horizon,” he said.
Rose argued that right now is a critical time to establish an RPS, to spur investment in renewable energy projects and take advantage of abundant federal clean energy tax credits.
Currently, Southcentral Alaska relies on natural gas for more than 80% of its electricity generation. Rose said a renewable standard would ensure that utilities diversify their energy sources and keep costs down.
A 2022 study from the National Renewable Energy Laboratory found that an RPS with an 80% target could save consumers hundreds of millions of dollars in fuel costs annually.
“Solar and wind projects are the kinds of projects, along with battery storage, that can be built quickly enough to actually make a difference in the short term, and reduce the amount of LNG that the region has to import,” Rose said.
Sen. Tobin, one of the bill sponsors, said she’s excited to see Chugach’s support for a renewable standard. And she said she’s glad to discuss the concerns GVEA outlined in their statement.
“I was feeling pretty optimistic before they published them, and I’m feeling more optimistic now as I see folks engaging in that conversation with good faith efforts and with interest in how they can be part of the solution,” Tobin said.
Tobin’s bill and a partner bill in the state House are both waiting to be heard in committees.