Tuesday, November 23, 2010

HEA Members Forum Update

Last Chance to Comment on the New HEA Rate Plan
The new HEA rate plan was filed with the Regulatory Commission of Alaska on November 2, 2010. It is undergoing a 45-day review by RCA staff. At the end if this period (around December 17) staff will present recommendations to Commissioners and a docket will be open for further investigation. This will likely include a 20-day public review process. Watch for notice of this if you have concerns or suggestions about the proposed rate plan that you would like to bring before the RCA.

Weigh in on New Energy Efficiency Standards
The RCA is considering adoption of new amendments to the Public Utilities Regulatory Policies Act which are intended to encourage energy efficiency, among other things. As might be expected, the RCA staff suggests against adopting the federal standards but does propose some modest increase in state regulatory support for energy efficiency. You have until December 9 to submit comments. See the attached summary for more information and go to the source at http://rca.alaska.gov/RCAWeb/Dockets/DocketDetails.aspx?id=ccbcfb40-5010-41c7-af3d-d2e42b57241d.

Independent Light -- Not the Brightest Bulb
Through it’s shadow corporation, the Alaska Electric and Energy Cooperative, Inc., HEA approved spending another $4.5 million on equipment and design engineering services for the Nikiski facility and old Soldotna 1 site. Most of this, $3.3 million, went to the latter. For the most part people see the logic in spending money to improve efficiency of the Nikiski plant. But to many, in a situation where the natural gas supply is questionable, spending millions on new stand-by gas turbines for Soldotna seems like a bad choice. All the more so, given that Anchorage Municipal Light & Power offered a power purchase agreement that one HEA Board member reputedly deemed “a pretty good deal.” As one former HEA electrical engineer recently pointed out, it’s unlikely we can ever recover the cost of new Soldotna turbines. With no one but ourselves to sell power to, they will stand idle most of the time and never generate revenue.

Alaska Railbelt Cooperative Transmission and Energy Company (ARCTEC)
HEA and other railbelt utilities continue to work on draft articles of incorporation for this potential confederation aimed at improved collaboration. The stated intent is to improve prospects for dealing with natural gas supply problems, better address transmission issues, and pursue utility scale alternative energy opportunities. According to HEA General Manager Brad Janorschke, utilities hope to come to agreement and file the articles by the end of this month (November). We agree that better collaboration will be needed to effectively meet railbelt energy needs in the coming years. Such efforts are to be commended, assuming that ratepayer interests are being taken into consideration. Unfortunately, as is so often the case, this process is being conducted behind closed doors.

Renewable Double Speak
While all of the HEA Directors say they favor adding more renewable energy sources to our energy mix, General Manager Janorschke has joined with other railbelt utility managers in signing the attached letter to the RCA and legislative leaders complaining that integrating renewable energy into the existing generation scheme is just too difficult. While the letter claims it isn’t a rejection of renewable technologies, it sure comes out reading like one. These utilities have failed to work with each other or potential independent power producers like Fire Island Wind (CIRI) or Kenai Winds to find ways to overcome integration challenges. HEA has committed to spending $180 million (plus) on natural gas generation but only $2-3 million on a single, very controversial, small hydroelectric project and not a dime on technology to balance fluctuations from wind generators. Railbelt utilities predict potentially high costs associated with integrating renewable energy but think nothing of increasing our dependency natural gas, even if we need to import it in liquefied form from outside. Wonder what that’s going to cost?

December HEA/AEEC Meetings
These meetings will all take place in Kenai at the Central Peninsula Offices, 280 Airport Way.

Tuesday, December 7, 2010
2:00 PM -- Operations and Special Projects

Tuesday, December 14, 2010
1:00 PM -- Finance Committee
3:00 PM -- AEEC Board Meeting
5:30 PM -- HEA Board Meeting

Download draft agendas at http://www.homerelectric.com/BoardofDirectorsElections/BoardMeetingInformation/Agendas/tabid/220/Default.aspx. Video conferencing is available in the Homer Offices at 3977 Lake Street -- call either HEA office at 283-5831 (Kenai) or 235-8551 (Homer).

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