Alaska is an island. Most certainly not an island like Hawaii, surrounded by the Pacific Ocean on every side, but separated from the mainland United States, nonetheless. Alaska is connected by a road but that road distance is greater than the sea voyage from the Port of Seattle by hundreds of miles. This accounts for the reason that Southcentral's percentage of freight that is received by sea is more than 85 percent and compares closely to Hawaii's 90 percent.
The isolation caused by the distance also means that Alaska is not connected to the infrastructure grid of the mainland United States, as anyone knows who attempts to get free shipping and sometimes finds that the fine print neatly excludes Alaska and Hawaii. Infrastructure is more than transportation and includes basic services such as telecommunication, internet access, emergency services, hazardous waste management, water resources, and electrical power generation and transmission.
The latter, electrical power generation and transmission, is such an important infrastructure need that the Federal Energy Regulatory Commission (FERC) is charged with ensuring the state governments and public utilities make sharing power reliable, efficient, sustainable, and as economical as possible. Alaska and Hawaii are excluded from FERC's public utility related statutory authority due to their electrical isolation and consequent inability to share power to another state. In short, Alaska is responsible for ensuring its own power generation and transmission is reliable, efficient, sustainable, and economical as possible.
Alaska Is 'Missing Out'
Kirk Warren, chief operation officer and director of project implementation at the Alaska Energy Authority (AEA), is working on an Alaska solution. Warren says, "It is true that Alaska is missing out on the ancillary benefits of being part of a larger interstate electrical grid such as access to high inertia generating units which would allow for vastly greater amounts of non-dispatchable, variable load interconnections and that Alaska relies upon the local utilities, the Regulatory Commission of Alaska, and State of Alaska agencies like AEA to link Alaska communities and their power for mutual benefit."
To this end Warren, through AEA, released in March 2017 the Final Railbelt Transmission Plan, a culmination of a series of planning efforts and studies that have been in progress since 2010. The recommendations, if fully implemented, would cost less than $1 billion (as spent) over the next thirteen years to 2030; however, they may save as much as $38 million to $83 million per year in 2030 dollars. The uncertainty in the projected savings is more sensitive to future power needs, how many of the recommendations are implemented, how the system is operated, and surprisingly not strongly tied to the price of fuel.
Economically, the cost savings could pay for the investment. Discounted for twenty years at 3 percent (the national five-year annual rate of inflation for energy) would generate savings of $1.2 billion in 2030 dollars if the full $83 million per year savings...