Compass: Chugach tries to balance more renewables and affordable power costs

Chugach Electric Association members and other Anchorage residents are talking about the CIRI Fire Island Wind project and about renewable energy generally. Chugach has been and remains a leader in bringing renewable energy to Anchorage homes. As we explain below, we have been thoughtful and deliberate in doing so.

Chugach members want reliable electric power at a reasonable cost, and many support adding more renewable energy to our portfolio. In 2009, Chugach began its consideration of a proposed 50-megawatt Fire Island Wind Project. Over the next 18 months, our board and management did a thorough analysis of the potential challenges, risks and benefits of incorporating wind. One of the big challenges is that wind is intermittent. We concluded that we could incorporate 17 megawatts.

Cost is very important, of course. The state of Alaska had provided $25 million toward construction of an undersea cable to bring power from Fire Island to Chugach facilities. Congress had provided tax incentives. Projections of the future price of natural gas led us to conclude that over the life of the contract, FIWP power, at the price we negotiated with CIRI, would become cheaper than power generated by gas turbines. The Regulatory Commission of Alaska accepted our analysis and authorized us to recover the cost of Fire Island wind power in rates.

Chugach continues to evaluate new renewable projects, including the proposed second phase of FIWP. We will be testing battery/flywheel technology to help us integrate wind and other intermittent sources. We have encouraged developers to send us proposals for other renewable energy projects, and we have received presentations on tidal, geothermal and waste-to-energy projects. We operate and are developing new or expanded hydroelectric projects. In 2013, renewables (wind and hydro) accounted for 13 percent of our generation.

Chugach also is promoting a "single operator" for the Railbelt grid (the transmission system, Fairbanks to Seward). This would allow that operator to evaluate and to bring energy from wind and other renewable projects into the homes of the entire Railbelt. The Legislature added $250,000 to the capital budget for the Regulatory Commission of Alaska to study the feasibility of an independent transmission organization for the Railbelt. We see this as an important first step. However, unifying the transmission system will not make uneconomic projects economic.

At the end of the day, projects must make sense for utilities and the customers they serve. A unified transmission system will help integrate good projects into the regional grid.

Janet Reiser is chairwoman of the board of directors of Chugach Electric Association.