Six railbelt utilities consider joining forces

Both state agencies that handle power issues are involved in the effort

Posted: Monday, January 24, 2005

Six utilities serving the power corridor between Fairbanks and Homer are considering teaming up, a move pres to share resources.

Under the proposed arrangement, the utilities would form a single entity that could share such efforts as training, accounting and lobbying.

"Today no one is charged with the planning of the system for the entire grid," said Mike Barry, board chairman for the Alaska Industrial Development and Export Authority and Alaska Energy Authority.

Both state agencies, which handle power issues, are involved in the effort. Barry said the proposed "joint action agency" could ultimately save money by having one entity, rather than six utilities, handle responsibilities for what is commonly referred to as the railbelt grid.

The railbelt grid serves about 75 percent of Alaska's population and is responsible for about 85 percent of the electricity generated in the state, according to a 2003 report by a task force commissioned by the Legislature.

One idea being considered is a uniform rate, so, for example, electricity in Soldotna would cost the same as it does in Two Rivers. However, utility representatives do not agree on whether a uniform rate would be advantageous.

Fairbanks-based Golden Valley Electric Association is already moving ahead with the concept, along with the Chugach Electric Association and Anchorage Municipal Light and Power. The boards for the three utilities have already or are expected to approve joining up, according to Golden Valley.

The concept drew mostly positive comments Friday during a meeting of the AIDEA and AEA boards, although utility representatives and other interested parties disagreed on the form the arrangement should take.

Utility representatives said a joint action agency could prove helpful in efforts such as replacing aging Railbelt generation facilities and diversifying methods used to produce electricity. Currently, 67 percent of railbelt electricity comes from natural gas, 15 percent from hydropower, 13 percent from fuel and 5 percent from coal.

"I think you're starting to see more realization among the utilities that there needs to be more cooperation," said Steve Denton, a vice president at Healy-based Usibelli Coal Mine, both a supplier and customer of Railbelt electricity.

Whether a JAA involving all six utilities moves forward rests with the utilities.

Beside the three utilities that have already moved forward with the concept, the railbelt utilities also include the city of Seward Electric System, Homer Electric Association and Matanuska Electric Association.

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