House Bill 382 would create a Railbelt Electrical System Authority to oversee region wide planning of energy generation and transmission projects. It would create a unified transmission and generation system and establish open access protocols for this system. This proposed authority would also perform what is called merit-ordered economic dispatch, which is system of using the cheapest and most-efficient power generation source, followed by the second-cheapest and efficient power generator, and so on.
Rep. Adam Wool, D-Fairbanks, introduced the bill. The session clock is ticking and there are more pressing issues to be dealt with such as the budget, so the bill might not get much traction at this point.
Why should Alaskans care about the bill? Because establishing a Railbelt Electrical System Authority could dramatically reduce the rates for electricity consumers along the Railbelt.
As Janet Reiser, the director of the Alaska Energy Authority, explained during a House Energy Committee meeting Thursday, the six Railbelt utilities are each trying to offer the best rates to their own customers — and to no other customers along the Railbelt — yet they all share the same infrastructure. This is not an ideal situation for such a small population of consumers.
According to a 2015 Regulatory Commission of Alaska letter to the Legislature, “Concerns about the fragmented, Balkanized and often contentious Railbelt utilities have been raised numerous times over the past 40 years. Several efforts have been made to reform and reorganize the Railbelt electrical system, but none have succeeded.”
The RCA’s letter made five recommendations, which HB 382 aims to address.
After the RCA sent its letter, it seems the the Railbelt utilities put aside their differences and started working together. These utilities have also hired a contractor to make recommendations on how to improve without government intervention, which is why four of six utilities reject HB 382.
“The Railbelt utilities understand the value of working together toward solutions. We continue to make progress toward cooperation and move into a future of collaboration that brings value to the entire region. We invite others to do the same,” the letter states. Executive officers of GVEA, Matanuska Electric Association, Homer Electric Inc., and Chugach Electric Association, signed the letter in opposition of the bill.
The Railbelt utilities are getting along fine right now, but the currently congenial business relationships could break down again.
Whether HB 382 fails this session or succeeds, it’s presence has likely nudged the utilities forward toward more collaboration. And, if the utilities don’t progress toward greater benefit of their customers, then the legislation can be reintroduced again and again.
— Fairbanks Daily News-Miner,
April 1
