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SE regional energy plan met with mixed reactions

Testimony agrees plan is needed, but it lacks vision for future growth

Posted: February 10, 2012 - 1:15am

Note: This story has been modified to correct a word in quote.

Public testimony on the Alaska Energy Authority’s energy plan for Southeast Alaska was measured at the House Resources Committee meeting Thursday. While many felt Southeast Alaska needed a regional energy plan, the draft released by AEA was not quite that plan.

The concern brought up several times during testimony in a meeting of the House Special Committee on Energy was the plan didn’t consider a growing Southeast Alaska. More specifically, the feeling was that the plan just didn’t dream big enough when it discounts building electrical interties within Southeast or to British Columbia.

The plan, created with the help of contracting firm Black and Veatch, does not set policy.

“By not exploring the potential maximum load of Southeast Alaska,” Brad Fluetsch, a representative of the Alaska Native Brotherhood, said the plan is “biased against growth and prosperity.” He said that the plan puts too much emphasis on minimizing future power supply, as the IRP states, and by doing so “does not take into account a growing Southeast energy demand,” Fluetsch said.

“As seriously flawed as it is, we need to save it,” Bob Grim, CEO of Alaska Power and Telephone said of the plan. “It is the best IRP we have because it is the only IRP we’ve ever had.” However, he said, a final plan should account for “a brighter future than is envisioned in this draft.”

Grim said he agreed that the draft IRP doesn’t take into account enough current and future demand.

“Mistakes happen,” Grim said, “but (the plan) can be salvaged.”

According to Black and Veatch Director Kevin M. Harper, this view of the plan as dream-killer is incorrect. Harper said his firm made recommendations based on a model of Southeast Alaska that does not grow much in energy demand and one in which it does grow.

The plan recommends increased energy efficiencies of homes, public buildings and businesses to reduce the need for some future increase in Southeast’s power supply.

Also, Harper said, some potential energy demand is currently too speculative too account for. He gave the example of mineral mines in their early stages.

A fundamental problem with the analysis, Harper said, is the lack of information about the 24 most feasible hydroelectric projects as selected by Black and Veatch models. These projects are in addition to five Southeast hydro projects already in the works.

The plan recommends one of the first steps would be to study potential hydro projects to get the quality of information on those projects so regional decisions can be made on which projects should go forward, Harper said.

Energy demand in Alaska is relatively small compared to regions Outside. Even the state’s largest electrical intertie, stretching from Homer and Seward on the Kenai Peninsula to Fairbanks, could have its power demands met by one good sized coal-fired power plant commonly used in the Lower 48. The Railbelt still has five times the demand of Southeast Alaska. This paucity of power needs creates unique obstacles to region-wide power planning, Harper said.

Southeast Alaska also has unique issues regarding the price of energy.

Harper said power costs in Southeast Alaska vary widely from nine cents per kilowatt hour to more than 30 cents for the same.

“I can’t think of another place in North America with that disparity of cost,” Harper said.

And that energy doesn’t just go to turning on the lights or keeping sodas refrigerated.

“It is very easy to think of the integrated resource plan as an electric only plan. But it is in fact aimed at addressing both the high cost of electricity and the high cost of space heating,” Harper said.

He said local power users should consider moving from diesel fuel to biomass space heating.

This call to switch energy sources created a concern that Southeast Alaska was being asked to give up its hydroelectric projects.

Harper said this is not the case, that the plan calls for nearly 70 megawatts of added hydro supply in a region with a max load of under 200Mw. Nearly three-fourths of the energy used in the region goes to heating homes, public spaces and businesses.

Electricity may not be the best energy for home heating, Harper said.

“Electricity turns motors, which create jobs,” Harper said. A better energy source for heating homes in Southeast Alaska would be biomass, Harper said.

While building new hydro to meet the energy demands required to get most of the region off of diesel would save 16-17 percent, biomass could do the same at over 40 percent savings.

The state contacted Black and Veatch to create an Integrated Resource Plan. To date, the project has cost $900,000 of the $1 million dedicated to the project.

Black and Veatch recommends Southeast carry out the plan in two phases. The first phase will take the region to 2016 and is expected to cost require more than $340 million in investment. Phase two projects Southeast Alaska’s power planning out 50 years. This second, long-term phase is estimated to cost $2.15 billion.

Harper said his most important recommendation is for communities in the region to work together. The problem wont be solved if each area plans only for its own needs, he said.

Rick Harris, executive vice president of Sealaska Corp., testified as the chairman of the Integrated Resource Plan committee. He called the recommended changes in the IRP “jaw-dropping.” The plan has “lots of things we haven’t seen before,” Harris said, like recommending against regional and B.C. interties. “All of which were staggering,” Harris said.

The committee did not endorse the IRP, Harris said. “But we did support getting the IRP out into the public.”

He said he believes AEA is committed to listening to public comments and that a final IRP must reflect these comments.

Bill Leighty of Alaska Applied Sciences, Inc. called the plan “extremely powerful” and said he was pleased that the plan addressed heating.

“Space heating accounts for the majority of energy used in Juneau,” he said. Leighty said the region should “look even beyond this innovative IRP” at other ways of moving energy around Southeast Alaska.

Other testifiers brought their own unique concerns to the House committee.

Angoon Mayor Albert Howard said he wants the intertie to his community reconsidered. His constituents pay 67 cents per kilowatt hour, he said, even though their town is located not far from a power line to a mine. He said the plan doesn’t address the human impacts of an intertie, only the financial impacts.

He said the concerns of his people were ignored and that he wants to try to help.

“The people I work for I see every day. This comes from them.”

Bob Losher said the plan doesn’t act fast enough.

“The economy is tough and jobs are hard to get,” Losher said, “and energy is a huge burden.” Some of his neighbors even resort to foregoing prescription medicine to pay heating costs, he said.

“The problem is immediate, it is an emergency state and needs to be dealt with now,” Losher said. He said energy could be a pillar of Southeast Alaska’s economy.

“We need to provide a product that we can use for our super region, B.C. and the western U.S., but could also be used in our own region,” Losher said.

“This plan is not ready for prime time,” Losher said. “I would hope that the Legislature not use this plan as a basis for decision-making.”

Angel Drobinica, Southeast Alaska Conservation Council’s energy coordinator, said the IRP was an important first step. Energy is a “very significant issue with no easy answer,” she said.

SEACC applauds the energy conservation recommendations in the plan, Drobinica said. And while the conservation group approves of using biomass in the region, SEACC also believes the plan should account for other technologies, like heat transfer pumps.

Public testimony ended at about 5:30 p.m., before all who where signed up had a chance to speak. To allow for more testimony, the committee plans to meet for another hearing next week.

• Contact reporter Russell Stigall at 523-2276 or at russell.stigall@juneauempire.com.

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