Rural power grids.

• Author: White, Rindi
• Position: ENERGY - Alaska spend as much as 47 percent of their household income

Residents of rural and remote communities in Alaska spend as much as 47 percent of their household income on energy, based on 2008 energy prices, according to a 2012 report on rural energy use from public policy forum Commonwealth North.

The sting hits low-income households the hardest. Mid-range income households in the same areas pay around 13 percent of their household income for energy, the report states. But it's still a lot more than Alaska residents living on the road system pay for energy, where heat and power is delivered via an interconnected grid and largely based on less-expensive natural gas instead of higher-cost diesel.

In road-system communities, low-income households typically pay about 18 percent of their income to energy sup pliers, while mid-range households pay about 6 percent.

That's not because rural residents are using more energy--most use less than half the energy urban consumers use, the report states.

The state has recognized this disparity and provides help through its Power Cost Equalization program, which assists customers in rural areas by offsetting the per-kilowatt-hour charge.

In fiscal year 2015, the state appropriated $41 million from its Power Cost Equalization Endowment Fund to 190 rural communities to help subsidize the high cost of power in rural areas of the state.

But is continuing to pay a portion of each rural resident's power bill the best solution?

Meera Kohler, president of the Alaska Village Electric Cooperative (AVEC), says no. Kohler chaired a committee working with Commonwealth North that, in February 2012, issued a report outlining a plan for a statewide energy grid.

"One of the conclusions was that we have to connect the state," Kohler says.

The Commonwealth North report emerged about the same time as a plan by the All Alaska Energy Project to build a high-voltage direct current concept that would connect the state using efficient transmission lines.

"Up till now, all the projects visualized a future that was a carbon copy of the current," Kohler says. That is, she explained, that other proposed projects do little to capitalize on the state's abundant natural resources.

"This offered the ability to capitalize on those resources ... and no other project does that," she says.

Building a Statewide Energy Grid

The plan hinges on a large (two thousand megawatt) gas-fired power plant at the North Slope.

That initial phase is estimated to cost $2.5 billion. Proponents say it would allow North Slope producers to take stranded gas to market and create a long-term, sustainable market for it. The large plant would make energy production more efficient and more cost effective than smaller, community-operated, diesel-run power plants. Emissions would be reduced and the plant could integrate...