Utilities collaborate to form Alaska Railbelt Transco: working together at behest of Regulatory Commission of Alaska.

• Author: Barbour, Tracy
• Position: SPECIAL SECTION: Energy & Power

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Alaska's Railbelt electric utilities are progressing with plans to form an Alaska Railbelt region electric transmission company--commonly referred to as a Transco--and other efforts meant to control electricity costs, increase reliability, and generally benefit all Railbelt power users.

In June 2015, the Regulatory Commission of Alaska (RCA) directed the Railbelt's six electric utilities to voluntarily work together to investigate and report the potential costs and benefits of creating a Railbelt Transco. The RCA regulates utilities to protect consumer interests and promote economic development.

Determining Potential Benefits

The Railbelt utilities have been working together for more than a year to determine the potential benefits of using a Transco in combination with a single "unified" or "independent" system operator (USO or ISO) to improve electric system service and reliability in their own service areas and across the Railbelt. Both a Transco and single system operator would be regulated by the RCA and could improve Railbelt electric service by facilitating system-wide planning and management of generation and transmission infrastructure. The Transco model could provide infrastructure planning, finance, construction, and management options that are currently not possible for the six individual utilities.

As an important note, the electric utility business has three components: power generation, transmission, and distribution. Generation produces electricity from energy sources, including natural gas, coal, wind, or flowing water. Transmission entails moving high-voltage power from generators to population centers. And distribution involves delivering power to individual homes and businesses. Not all utility companies engage in all three aspects of the business. A Transco is a utility that only transmits power that is generated and distributed by other entities.

Power transmission is generally a straightforward process of moving electricity from producers to distribution points. Electricity must first be stepped up or transformed to higher voltages, so it can safely and efficiently move relatively long distances across a network of high-voltage transmission lines. It is then reduced to lower voltages at another substation before distribution companies deliver it to consumers' homes and businesses.

About 80 percent of all Alaskans receive their power from one of the six Railbelt utilities. These utilities--including Golden Valley Electric Association, Matanuska Electric Association (MEA), Chugach Electric Association, Homer Electric Association, Municipal Light and Power of Anchorage (ML&P), and the City of Seward--serve a combined area that extends from the Kenai Peninsula to Fairbanks. Each utility has special challenges associated with its service area's unique geography.

The utilities have formed working groups to create cost-benefit models for a Transco and single system operator that would manage all power generation to meet the entire Railbelt's demands. To facilitate their efforts, they have been working with American Transmission Company (ATC), a Wisconsin-based transmission-only utility. ATC has fifteen years of experience forming and operating a Transco in the Midwest. "We've been through the experience bringing together many utilities, large and small, including municipalities and cooperatives, to identify, construct, and operate transmission lines for their mutual benefit," says Mike Rowe, CEO of ATC. "We look forward to being part of that sort of partnership in Alaska."

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The Railbelt utilities are optimistic about the collaborative process that is already taking place. "ATC helped us create milestones that could lead to the creation of a Railbelt Transco," says Mark Johnston, general manager of ML&P. "The utilities have been working toward this goal for a long time. But we were working as six individual utilities," Johnston says. "Bringing us together and doing it as a group, we have a much better chance of success."

The utilities are analyzing...