Alaska electric utilities submit long-sought plan for a Railbelt grid planning group

It’s been nearly seven years since the Regulatory Commission of Alaska scolded the state’s largest electric utilities for not working together more to improve reliability and lower costs in the Railbelt grid.

The utilities submitted what amounts to their final response plan March 25.

The Railbelt Reliability Council’s application to the RCA would form an electric reliability organization, or ERO, to manage, plan and evaluate potential investments in the Railbelt transmission grid that covers the territories of five utilities across the four most populous areas of Alaska.

While the council, or RRC, would be led by a board that includes representatives from each of the utilities among 13 voting directors, it would also importantly include several stakeholder representatives who have advocated for change in how the utilities operate.

RRC Chair Julie Estey said the application commits the fledgling organization to “continued collaboration, transparency, technical excellence and inclusion,” as the group attempts to meet the ever-evolving demands of Railbelt consumers.

With aging, single-line transmission links between the Railbelt’s population centers and natural gas prices that have until very recently been two to three times greater than across much of the Lower 48, the pressure for significant change in the Railbelt electric system has been building for years.

“The concept of a collaborative structure that brings a variety of diverse perspectives together of the benefit of the entire region has been discussed for decades and we couldn’t be happier to achieve this critical milestone,” said Estey, who is also the external affairs director for Matanuska Electric Association. “The RRC appreciates the RCA’s consideration of our application and, if approved, we stand ready to fulfill the critical mission of the state’s first ERO.”

In June 2015, the five-member RCA described the Railbelt grid as “fragmented” and “balkanized,” outlining how the lack of a system-wide, institutional structure at the time led the utilities to collectively invest approximately $1.5 billion in separate new gas-fired generation facilities with little evaluation as to what would be best for the Railbelt grid overall.

The Railbelt region stretches from Homer to Fairbanks and accounts for more than 75% of the power used in the state.

In a rare move for the mostly apolitical administrative body, the RCA endorsed state legislation passed in 2020 that required the establishment of a Railbelt ERO, and laying out some of its goals also pushed the utilities into action after voluntary prior attempts to form other power planning organizations stalled.

An RCA spokesman could not be reached in time for this story.

A clear example of the need for improvements in the system is the fact that utilities have often been unable to maximize the cost benefits of hydropower from the state-owned Bradley Lake plant near Homer because of constraints in the transmission lines between the Kenai Peninsula and the rest of the Railbelt. Bradley Lake is the largest hydroelectric facility in Alaska and provides the lowest-cost power in the region.

The utilities estimated that a four-month outage in 2019, after a stretch of transmission lines was damaged by the Swan Lake fire near Cooper Landing, cost ratepayers in Anchorage, the Mat-Su and Fairbanks nearly an extra $12 million because it cut off power from Bradley Lake.

Chris Rose, executive director of the Renewable Energy Alaska Project, and an RRC Implementation Committee board member, has long been among those stressing the need for an independent group to plan investments in the Railbelt that could maximize efficiencies between the utilities through better power generation coordination and encourage more renewable power projects in the region.

To that end, Gov. Mike Dunleavy submitted legislation in February mandating, with some exceptions, that at least 80% of the Railbelt’s power come from renewable sources by 2040. Rose and other active stakeholders have said achieving such a renewable portfolio standard is only possible with an independent organization that could plan the Railbelt grid to optimize the integration of renewable power.

Studies commissioned by the Alaska Energy Authority have concluded that a robust, redundant Railbelt transmission system would cost upward of $900 million, though many utility leaders question the need for many of the individual investments within that total.

Rose has at times been a vocal critic of how Railbelt utility leaders have approached the integration of renewable power sources they do not own. Utility leaders insist they have a responsibility to look out for the interests of their members first, even if a renewable project or transmission investment could benefit the Railbelt as a whole. He acknowledged there is an inherent challenge in the RRC maintaining its independence, given the utilities and other stakeholders make up the vast majority of the board leadership as envisioned, but said council staff will be tasked with providing independent recommendations to an advisory committee that will inform the RRC board decisions.

It will be up to the RRC staff to vet potential infrastructure investments and power sharing plans, in part to make sure they make sense across the Railbelt.

“It will be a staff of senior engineers who lead processes that include a working group composed of all different interests,” Rose said. “The staff is then acting independently, we hope, of both the influence that the board may have and the influence that the governance committee may have.”

If the RCA approves the application within the normal six-month window, the RRC could be staffed and ready to start working on its first long-term integrated resource plan for the region’s grid next year. The final plan is still likely three or four years away, Rose estimated.

The RRC’s filings call for a staff of 12 and a $4.5 million budget in 2023, paid for by the utilities.

While it’s often very technical and bureaucratic, the issues driving the formation of a Railbelt electric reliability organization — possibly the RRC — touch everyone in the Railbelt now and are likely to become more important, according to Rose.

“As we move from fossil fuel transportation and heat to electric transportation and heat, electricity is going to be touching even more of our lives and there are more stakeholders that need to be a part of it,” he said.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.