Railbelt Grid Reform : REAP

Railbelt Grid Reform

Reforming Alaska’s Railbelt electric grid

Since 2014, REAP has been advocating for the creation of a new regional organization to unite all six Railbelt utilities. On March 20, 2020 the Alaska Legislature finally passed a bill to ensure that an Electric Reliability Organization, or ERO, will be created. The new ERO will establish and oversee region-wide reliability standards as well as non-discriminatory interconnection standards that will make it easier for independent power producers to access the transmission system to sell renewable energy. An ERO will also oversee a public planning process to determine what new generation and transmission assets are needed in the Railbelt.

Why an Electric Reliability Organization?

Between Homer and Fairbanks there are five interconnected utilities that distribute electricity to customers in six separate service areas in what Alaskans call the “Railbelt.” Four of those utilities also own and operate generation, and all five, plus the State of Alaska, own parts of the transmission system. For decades, those entities have independently planned and operated each of their relatively small service areas. An ERO will create a set of regional rules, standards and protocols and help ensure a level playing field for renewable energy development in the Railbelt.

Two important roles

The ERO would establish and oversee region-wide reliability standards and non-discriminatory interconnection standards as well as oversee a public planning process to determine new generation and transmission assets.

In the future, the ERO could also administer two other important functions that are essential for more renewable electrons to flow in the state’s most populated region:

1. Oversee an open access transmission tariff for the entire Railbelt region. Today, each utility can charge fees for the use of their transmission assets, making moving electrons long distances unpredictably expensive.

2. Establish a system operator that would dispatch all of the Railbelt’s electric generators, with the most efficient generators being turned on first regardless of which utility owned them. This type of “merit order economic dispatch” of generation assets would require all supply and demand of electricity in the region to be balanced together, rather than allowing each utility to balance supply and demand in their much smaller respective service territories. Creating such a single, much larger “load balancing area” would make it easier for variable electrons from wind and solar plants to be integrated and fully utilized. To read more on the need for economic dispatch through a system operator, see our white paper on the subject.

Our efforts

We have been working both in front of the Regulatory Commission of Alaska (RCA) and the state legislature on this issue for six years.

In 2015, we helped get legislation introduced to create a regional system operator and later that same year the RCA sent a letter to the legislature outlining its findings and recommendations for reforming the Railbelt grid. That letter from the RCA led to a number of stop-start voluntary efforts on the part of the utilities to begin economic dispatch in the Anchorage area, and to create regional reliability standards.

To keep the process moving, REAP helped get another bill introduced in the Alaska State House in 2018. Since the fall of 2018, we have been working with the utilities on a voluntary effort to form an ERO that is being called the Railbelt Reliability Council, or RRC. Currently, REAP sits on the Implementation Committee of the RRC to create foundational documents and an application to the RCA to become the ERO as directed by SB123.

Current status

In the spring of 2019 we worked to get legislation introduced in both the House (HB 151) and Senate (SB 123) in order to provide the RCA the authority to regulate an ERO, which will be a non-profit organization rather than a utility. After a flurry of hearings in the winter of 2019/2020 in both the Senate and House, SB 123 passed both chambers, culminating years of REAP advocacy. The Governor signed the bill into law in April of 2020. Since then the RCA has begun a public process to write the regulations that will govern the new regional entity. Read about the RCA order issued on May 18, 2020 to start the rule making process.

The voluntary efforts to form the RRC are also continuing. REAP has been appointed to the Implementation Committee that will work to form the RRC and we are hopeful that these efforts will succeed. If those efforts to form the RRC do not succeed, SB 123 gives the RCA explicit authority to form an ERO on its own. If the RRC is ultimately certified by the RCA to become the Electric Reliability Organization for the Railbelt region, REAP would likely be one of the voting members on the RRC’s first governing board.

While the legislative victory to pass SB 123 is significant, there is still much work ahead to ensure that the new Electric Reliability Organization is formed to support more future renewable energy development. Effective reform of the way the state’s largest electric grid operates will attract private investment and help Alaskans move toward a clean energy future where local renewable energy is used for both transportation and heat.

To read more see the public comments that REAP has filed since June 2020 in the ongoing RCA process to make rules to implement SB 123, follow the links below.