Alaska News

Independent power producers praise regulatory decision they say gives broad access to power distribution

Independent power producers are celebrating a Regulatory Commission of Alaska decision that will grant them competitive access to electrical transmission, saying it will spur investment in renewable energy projects.

The commission voted four to one Wednesday to adopt new regulations, which dictate a number of cost factors used in negotiating with independent power producers.

The decision updates a series of complex electrical utility regulations from 1982. Independent power producers said those rules made it difficult to develop renewable and alternative energy sources by creating high cost barriers for small electrical generators to sell wholesale power and access state-owned or -subsidized transmission systems.

Non-utility power producers -- generally, small-scale renewable energy producers -- have been working with the RCA for years in an attempt to update the regulations.

Mike Craft, Alaska Environmental Power owner, filed a challenge with the RCA in 2013 after he struggled to find a buyer for power produced at his wind farm in 2010.

In a phone interview Monday he said he was pleased with the ruling. He said he spent the weekend talking to wind turbine manufacturers about how he could increase the size of his wind project in Delta Junction.

"Alaska is now open for business," he said.


Duff Mitchell, executive director of the Alaska Independent Power Producers Association, said now utilities must operate under a "non-discriminatory process" when negotiating with the producers. Updating how the power costs are calculated means a fairer playing field, Mitchell said.

"Before (the RCA decision), if you were CIRI or a wind farm, or a Native corporation out in the middle of nowhere, and you wanted to put some windmills up, with the current regulatory regime the deck was stacked against you," he said. "It foiled a lot of our development."

Mitchell said to expect to see more independent power projects go into development as a result of the RCA's ruling.

"I don't think it will be a snap of the finger and money will starts rolling in, but it starts that process where it's reduced regulatory uncertainty for renewable energy projects," Mitchell said. "Banks hate risk, so we've reduced risk."

Electric utilities have often cited increased costs to ratepayers as a rationale for not buying power from independent producers. But Golden Valley Electric Association CEO Cory Borgeson said in a phone interview Monday that his electric cooperative has worked hard to incorporate independent power into the grid. He said last year they spent more than $100,000 looking at potentially incorporating Fire Island Wind energy and he appreciates the guidance provided by the regulations from the RCA.

"We believe this open process is important," he said. "We're always welcome to open additional independent power producers to our system, with the one caveat that it can't increase the cost to our members."

CIRI Senior Vice President of Land and Energy Development Ethan Schutt agreed that the new regulations would likely be helpful for future energy producers hoping to do business in Alaska. But he said the effort was two years too late to help phase II of the Fire Island Wind project from moving forward. Phase II of the Anchorage wind farm was suspended earlier this year after no buyers emerged for the power.

"Had this been done two years ago we might have done a deal with (GVEA) last year," he said. "But these very issues killed that opportunity."

The regulations are scheduled to go into effect next year.

Suzanna Caldwell

Suzanna Caldwell is a former reporter for Alaska Dispatch News and Alaska Dispatch. She left the ADN in 2017.