Railbelt electric grid power struggle: reform needed for aging infrastructure and inefficiencies.

• Author: Bradner, Mike
• Position: SPECIAL SECTION: Energy & Power

Some things take a long time to change. Electric utility restructuring and reform along Alaska's "Railbelt" power grid is one of them.

In February 2014, Chugach Electric Association CEO Brad Evans briefed a state legislative committee about issues facing the railbelt utilities, and Evans' words ring as true today as they did almost a year and a half ago.

The Railbelt refers to Alaska communities along the route of the Alaska Railroad from Southcentral to Interior Alaska. The term is used loosely because it includes the Homer Electric Association (HEA) service area on the Kenai Peninsula.

In short, nothing has happened yet to resolve problems Evans spoke of in early 2014 despite years of talk. Power is being generated and distributed across the power grid safely and reliably, but it is being done inefficiently, the utilities and independent experts agree. About $1.5 billion in new power generation facilities have been built by individual utilities in recent years, but not in ways that will most benefit consumers across the entire region.

Finally, the transmission infrastructure is aging, which raises the threat of a breakdown of the system.

The problems are now becoming more severe, and the state's regulatory commission appears to be finally ready to step in with a big stick, possibly backed by the Legislature.

Evans explained the situation this way in early 2014:

"The interconnected Railbelt electric system is in transition. Legacy agreements [the older wholesale power contacts] are coming to an end [those ended in 2015]. New and upgraded transmission lines are needed but are not being constructed. Commonly accepted 'rules of the road' are needed for the transmission network, along with a means of enforcing them. Non-utility power providers [mostly private independent power producers] want access to the grid," Evans said.

"Above all, studies by the Alaska Energy Authority have shown that ratepayers in the Railbelt could save significant amounts of money each year if the most efficient generating units could be dispatched first and if there were not transmission bottlenecks restricting their output," he said.

A new business model is needed for the Railbelt utilities, Evans said. In other states, regulators, typically state utility commissions, solved similar problems by creating Independent System Operators, or ISOs (also called Unified System Operators, or USOs) to manage the grid and ensure that different generating units were used in the...