February 14, 2013 | Vol. 39, No. 7

Utility and community leaders talk energy

Community and utility leaders from Petersburg, Wrangell, Juneau, Angoon and Ketchikan gathered last week to discuss energy resources in a round table forum.

The common denominator for most of these leaders was a way to reduce the need for diesel power or get off of this expensive power altogether.

Southeast Conference Energy Coordinator Robert Venables facilitated the event and laid out several key findings from the Southeast Alaska Integrated Resource Plan that he thought necessary for consideration.

“The current situation facing the Southeast region includes a number of issues that place the region at a historical crossroad regarding the mix of generation, demand-site management/energy efficiency, end-use conversions, transmission and transportation resources that it will rely on to economically and reliably meet future electric and heating needs,” Venables said. “There is no silver bullet solution and we need to be aware of opportunities that come along.”

He also explained that another major concern is the region's inability to store energy to meet demands during the winter.

According to Venables, the future role of Southeast Alaska Power Agency, SEAPA, may need to evolve.

“In a discussion such as this by the Southeast Conference several years ago, there was call for an entity for energy generation and Four Dam Pool wasn’t it,” Venables said. “That vision has evolved into what is now SEAPA and I think many in the region look to SEAPA for answers to these energy questions.”

Venables said that Southeast Alaska is like the Saudi Arabia of hydro-electric resources.

“In the summer this comparison is true,” Venables stated. “We have seepage, leakage and everything but the sustaining storage capacity just isn't there.”

He also explained that a lack of information on potential hydro projects is a major concern and is something that needs to be analyzed.

“It is well known that the Kake Inter-tie project is in its final processes of departmenting,” Venables stated. “We hope to see a draft Environmental Impact Statement, EIS, in the next days, weeks or months but we also know it is also only as reliable as the energy that is available.”

According to Venables, this meeting is the perfect opportunity to review an approach to the future and see where we are in regards to energy.

“It is important for the region to think about the future in two phases with regard to long-term resource decisions,” Venables said. “In phase one communities should look to the next five years and phase two should include beyond that.”

The mayors of each represented community gave suggestions and updates on their power usage and possible project development.

“I would like to see some kind of application go forward for the permits in Thomas Bay,” Petersburg Borough Mayor Mark Jensen said. “I know a permit has been applied for Cascade Creek and Ruth Lake is still wide open. We need to get more generation and if we get that from Thomas Bay we can tie it into the grid and eventually have a line that would tie into Snettisham. That could make it possible to be tied in from Greens Creek, all the way to Metlakatla.”

According to former Wrangell Mayor Don McConachie, the smaller communities are right next to the area where more energy is needed.

“My focus would be on getting smaller hydro-electric projects that could be tied into a complete infrastructure throughout Southeast Alaska,” McConachie said. “It would be great to tie directly into Juneau at some point, but I know that would be years down the line.”

McConachie also explained that it is known that Southeast Alaska gets a lot of rain and that is what makes hydro power the most sensible.

Ketchikan's Vice Mayor Bob Sivertson spoke on the collaboration of a larger regional project instead of many small ones.

“With our low inflow in the lakes, we have been operating on diesel power for over a month and no one likes that,” Sivertson said. “We have to work together as a region and find a common goal to find another hydro project to get our communities off the diesel.”

In agreement with Sivertson, is Juneau's Mayor Merrill Sanford.

“We all seem to me we are all beginning to bump up the upper end of our hydro capacities and we are all looking for ways to overcome that,” Sanford stated.

Angoon Mayor Richard George spoke of the work to develop a hydro plant at Thayer Lake.

“As many know this project has been in the works for the last 40 years, it was identified as a potential hydro site and for whatever reason it hasn't come about yet,” George said. “There is a large group of people back home that are waiting for this to happen and we are very concerned about the funding being depleted before it can happen.”

George explained that he attended the meeting to encourage support for the Kake – Petersburg Inter-tie.

Venables made a point to explain that the work on the Thayer Lake project does continue and it is supported by all of the communities throughout the region.

The utility managers chimed in at this point from the operational side to update all on where they are with power generation.

“Our system has shifted from a summer peaking system to a winter peaking system,” Petersburg Municipal Power and Light Superintendent Joe Nelson stated. “We would much rather have a power sales agreement with a large entity and pay them rather than have a diesel plant and that is one of the main reasons we would like to see a project in Thomas Bay.”

Nelson also explained that he personally believes that the permitting process would be the same for several small projects as it would be for a large project.

“By a large project, I mean something in excess of 20 megawatts,” Nelson said. “With a project like that on the grid all of these things open up and it really establishes a true grid and allows us to work to get people off of diesel.”

Nelson explained that the larger the grid, the more generation can be established.

“There is an inertia there so that the minor bumps of plugging in a toaster in Petersburg and the lights dim in Wrangell won't happen,” Nelson said. “The economic future of the Southeast depends on a unified voice that is looking to the energy future of the region.”

According to Wrangell Light and Power Superintendent Clay Hammer, Wrangell is the new kid on the block as far as recent growth and that is in large part to trying to use reserve fuel.

“Only 42 percent of our residential customers have converted to electric heat and only 35 percent of our commercial customers have converted,” Hammer said. “In the grand scheme of things there are still a lot of people out there that haven't converted over.”

He stated that there are several large industrial buildings that haven't been converted and if fuel prices stay where they are, these customers will have to start looking for alternatives.

“I believe that Thomas Bay would be the best place to start with the development of other hydro projects,” Hammer stated. “Thomas Bay could quite possibly be the cornerstone to a Southeast grid.”

Ketchikan Power Utility General Manager Andy Donato stated that Ketchikan has been running on diesel power for over a month and that is not good for the community.

Donato came prepared with information explaining electricity usage over the last several years for some of the new facilities in the area.

“The new fire hall used 750 kilowatts of power from 2011 to 2012,” Donato stated. “The schools take 5,000 kilowatts per year.”

Donato also explained that there has been a two percent increase in power usage over the last two years.

Inside Passage Electric Cooperative General Manager Jodi Mitchell encouraged the group to pursue a large hydro-electric project.

“We would like to have some security about power in the area,” Mitchell said. “Our average residential customer, in 2012, only used 375 kilowatt hours per month and the national average is 909 kilowatt hours so this becomes a quality of life issue.”

She explains that businesses in the community are folding left and right because they can't afford to keep them going due to power costs of diesel.

Alaska Electric Light and Power General Manager Tim McCleod pointed out what all of the communities have in common.

“Safety is key and we have to put enough of an investment into our projects to make sure the communities are safe,” McCleod said. “And any investment that is made is paid for by our customers. Reliability is another common point, but this also drives the costs up.”

He explained that all of these key factors are important but they all bring the costs of power up for the customer.

“We have six hydro projects but we could lose 85 percent of our hydro by one failure,” McCleod stated. “We have to have enough diesel generation to cover that loss and we are putting more funds into more back-up generation.”

According to McCleod, the electric industry is the most capital intensive industry in the entire world, even more so than the space program.

“Hydro projects are very difficult to build,” he stated. “The timing of when it is more cost effective to run some diesel or to develop a hydro project is the most difficult aspect of the electric industry.”

Venables stated that SEAPA will have a role in all of the projects and possible projects that have been spoken of in this forum.

“SEAPA is currently working on some things that will hopefully address some of the issues that were brought up here,” SEAPA CEO Trey Acteson said. “The migration to electrical loads has accelerated but big projects seem to come along all at once and overloads the power system.”

Acteson explained that SEAPA received a legislative appropriation that has provided of $3 million that included $578,000 that has been designated specifically to hydro storage and the Swan Lake Reservoir expansion.

“We can build a big hydro project,” he stated. “But more than likely we will still be burning some diesel for power. It all depends on the in-flow of water.”

No clear-cut solutions were reached by the end of the discussion but many suggestions and ideas were submitted and brought to the forefront by all of the community and utility leaders.

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