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Results are in for latest Southcentral Alaska Energy Watch drill

Suzanna Caldwell
Loren Holmes photo

The results of Southcentral Alaska's fourth annual "Energy Watch" test are in, and the results weren't too surprising.

The tests gauge how far utility customers can voluntarily restrict their power consumption in the event of a shortage. For two hours on the evening of Oct. 31, residents of Anchorage, Kenai and the Mat-Su Valley -- Alaska's core population center -- reduced the area's energy load by 1.5 percent, or about the same amount of conservation as last year's watch, according to the city.

In past years, the reduction was between 2 to 4 percent. The test results were derived by comparing Oct. 31's usage with the same time period on both the days before and after.

While a 1.5 percent reduction might not sound like much, Enstar spokesman and Energy Watch Committee member John Sims said if usage were reduced by that amount on a daily basis for the entire year, it would add up to 1 billion cubic feet of natural gas.

Generally, Southcentral Alaska relies on 70 billion cubic feet of natural gas to power and warm the state's population center. Sims said the average home consumes 149 thousand cubic feet (mcf) of natural gas a year. Do the math, and that's enough gas to heat half a million homes for entire year.

Imports and rising energy costs

The energy watch, conducted each fall, asks residents to go to "yellow" energy alert. In the Yellow stage, residents are asked to lower home thermostats to 65 degrees, turn down the setting on water heaters and avoid using high-energy appliances like dishwashers and washing machines.

While Wednesday's exercise was just a test, in the event of a potential energy shortfall, going to yellow -- or even red alert where conservation measures become more extreme -- could be an actual possibility.

After 50 years of use, wells in Cook Inlet are depleting. While new wells are coming online, it's not enough. Production is not expected to meet future demand. Last month consultants Petrochemical Resources of Alaska pushed the date of a potential gas deficiency forward -- saying that Cook Inlet gas supplies could begin to fall short in 2014.

Despite incentives from the state -- like House Bill 280, which in 2010 established a natural gas storage facility on the Kenai and offered tax incentives for new producers in the Inlet -- utilities are looking elsewhere to meet natural gas needs.

Recently, the companies, which include Enstar, Chugach Electric and Municipal Light and Power, informed the Regulatory Commission of Alaska that they are currently seeking proposals to import either liquefied natural gas or compressed natural gas.

While there are pros and cons to each, both would require new infrastructure to push the imported gas into the lines. The imported gas will undoubtedly be more expensive than Cook Inlet gas. Currently LNG costs between $15-18 per thousand cubic feet. Cook Inlet gas is about $6.

In Fairbanks, residents are being left in limbo, with extraordinarily high heating costs plaguing residents, despite a pipeline of crude oil flowing just miles north of the state's second largest city.

With multiple energy pet projects being floated -- natural gas pipelines and/or trucking it from the North Slope, hydroelectric dam projects and the like -- the questions remain: Should Alaska look at reducing oil taxes by as much as $2 billion per year? Or should that money go toward helping Alaskans struggling with the increasingly high cost of energy?

No waiting

Either way, Southcentral utilities aren't waiting. They're expected to make a decision on what type of natural gas to import sometime in early 2013. The announcement will most likely come while state legislators are in session in Juneau.

The energy watch wasn't just about turning down the thermostat. As part of the energy watch, the utilities commissioned a poll asking Southcentral residents whether they were aware of potential natural gas delivery problem. The poll found that about 60 percent did.

Sims said that was encouraging. Utilities will spend the next few winter months continuing the Energy Watch program. Whether or not that will translate into action in from state lawmakers is hard to say.

“(Legislators have) done a lot to increase activity and it's proving to work,” he said. ”But the question is, was it too late?”

Contact Suzanna Caldwell at suzanna(at)alaskadispatch.com