Historic Legislation Unites Railbelt Utilities to Bring Increased Efficiency, Coordination and Diverse Voices to Alaska’s Energy Future
On April 29, 2020 Alaska’s Governor signed into law Senate Bill 123 to ensure the creation of a new electric reliability organization (ERO) for the Railbelt region. The legislation will bring a greater level of continuity and efficiency to the region’s electric system which is expected to provide more opportunities to renewable energy developers and help to lower electricity costs for consumers. Renewable Energy Alaska Project (REAP) has been a strong advocate for this reform for more than six years.
The ERO will be tasked with regional planning for all new generation and transmission projects, overseeing regional reliability standards and developing non-discriminatory protocols to access the regional grid. For the first time, Alaskans will have a direct voice in what new projects are built in the region and the Regulatory Commission of Alaska (RCA) will have the authority to approve large projects before they are built.
“This is a historic moment for Alaska. Efforts to reform the Railbelt electric grid to improve coordination and efficiency among the six utilities is something people have been trying to do for several decades. This is a major win for everyone. It will create a better environment for renewable energy development, create efficiencies that will lower electric costs for consumers and allow Alaskans to have a say on what projects are built in the future,” said Chris Rose, REAP Executive Director.
What an ERO means for Alaskans:
1. Lower electricity costs and increased utility efficiency.
The new ERO will bring the region’s six independent utilities together with other non-utility stakeholders to improve coordination and develop efficiencies which will lower electricity costs. Currently, the six utilities plan and operate their systems separately from one another. The new ERO, operating under the RCA, will be tasked with developing a way to recover costs for new transmission projects that have regional benefit.
“In 2018, Railbelt consumers collectively paid about $880 million for electricity. Even a two percent increase in efficiency along the Railbelt grid would save consumers over $17 million every year,” said Rose.
2. Increased renewable energy development
The new ERO will make it easier for renewable energy projects to be developed. Non-discriminatory open access to the transmission grid, regional planning and changes to the way transmission costs are calculated will all help level the playing field for independent power producers that would like to sell renewable power into the Railbelt grid.
3. New public involvement on utility projects
Under the new ERO, decisions about new, large power generation and transmission infrastructure will be decided through a “integrated resource planning” process that will include public comment, and the RCA will have new authority to approve those plans. In addition, the new electric reliability organization will be governed by a mix of utility and non-utility stakeholders, including voices for renewable energy, independent power production and consumer protection.
REAP helped get SB 123 (and its companion in the House, HB 151) introduced in May 2019. The organization has been a leading advocate in Juneau for the creation of a new regional entity for the Railbelt, having supported previous legislation in both 2015 and 2018.
All six regional electric utilities supported SB 123, including Golden Valley Electric Association (GVEA) in Fairbanks, Matanuska Electric Association (MEA) in Palmer, Chugach Electric Association (CEA) in Anchorage, Municipal Light and Power (ML&P) in Anchorage, the City of Seward’s electrical department and Homer Electric Association (HEA), which serves the Kenai Peninsula. Key lawmakers who helped move the bill through the legislature included Senator John Coghill, Chair of the Senate Special Committee on the Railbelt Electric System and Representative Grier Hopkins, Chair of the House Special Committee on Energy.