Draft plan suggests merging utilities

FAIRBANKS - A draft plan on statewide electrical generation in Alaska suggests savings by consolidating six electrical utilities in Fairbanks and the Southcentral region.

The Regional Integrated Resource Plan, released last week, analyzed Alaska's electrical infrastructure and suggested that consolidation could make it easier to shift the state toward more renewable power.

It said households and businesses will save money if one centralized utility replaced aging transmission lines and power plants, and managed energy efficiency programs. It also suggests energy efficiency programs would benefit homes and businesses in and near urban areas.

Former Gov. Sarah Palin proposed such a consolidation before leaving office.

Directors at the Fairbanks utility, Golden Valley Electric Association, told the Fairbanks Daily News-Miner they generally agree with the draft plan by Black & Veatch, a Kansas-based international consulting firm.

But utility officials say they have yet to agree on how to consolidate without saddling customers with higher short-term electricity prices.

"You could achieve a little more (savings) by consolidating, but only a little bit more," said Brian Newton, chief executive at Golden Valley. "Getting there is going to be very painful."

Black & Veatch said if a consolidated electric utility isn't formed soon, the state should open an office to develop efficiency programs and help steer efforts to build renewable energy projects.

Palin's consolidation proposal, pitched through current bills in the House and Senate energy committees, would create a centralized nonprofit utility with a 13-member board. Utilities would slowly transfer ownership of power plants to the company, as would the state Energy Authority with the Bradley Lake Hydroelectric plant.

The region's six utilities are split regarding the detailed consolidation proposal, with Gov. Sean Parnell backing the prospect of merging the entities.

"Affordable and reliable power is a fundamental building block for economic growth," Parnell said last month, praising three utilities that have backed consolidation.