Alaska’s economy has been adversely impacted by the coronavirus pandemic. While a full recovery to pre-pandemic levels will take time, there is reason for hope. As we look to Alaska’s future and work to make it the best possible, we can look back and reflect on past accomplishments, which are the building blocks for tomorrow’s prosperity.
The Alaska Energy Authority (AEA) serves Alaskans as the state’s energy agency by reducing the cost of energy, providing energy policy guidance, and engaging with the state’s electric utilities and all those interested in energy issues. As the owner of significant Railbelt generation and transmission assets, AEA ensures that sound public policy and energy initiatives maximize benefits to the broadest group of stakeholders.
Among Alaska’s valuable energy assets is the Bradley Lake Hydroelectric Project. As the state’s largest hydro plant, it serves more than 500,000 Alaskans. Located at the northeast end of Kachemak Bay near Homer, the project consists of a 125-foot-high dam, a 3.5-mile-long power tunnel, a generating plant and 20 miles of transmission line.
In October, AEA, along with our partners Chugach Electric Association, Homer Electric Association (HEA), and Matanuska Electric Association, completed the West Fork Upper Battle Creek Diversion Project to divert water from Battle Creek into Bradley Lake. This $47 million project increased the amount of clean, low-cost energy produced at Bradley Lake by about 10 percent, or 37,000 megawatt-hours of energy annually (equating to approximately 5,000 homes). The project was the largest improvement to the Bradley Lake facility since it began operation in September 1991.
Another vital AEA-owned asset is the Alaska Intertie, a 170-mile transmission line between Willow and Healy, which serves as a critical link between Southcentral utilities and Golden Valley Electric Association (GVEA), in Fairbanks. It allows Interior ratepayers to benefit from the low cost of Bradley Hydroelectric power and natural-gas-fired generation in Southcentral. Between 2008 and 2018, the Intertie provided an average annual cost savings of $40 million to GVEA customers.
AEA is also improving the reliability and resilience of Alaska’s Railbelt Grid and decreasing costs for ratepayers by its purchase from HEA of a 39-mile, 115-kilovolt transmission line for $17 million that runs between the Sterling Substation and Quartz Creek (SSQ Line). The SSQ Line is a critical component of the Railbelt transmission system. This historic transaction brings significant benefits to Railbelt customers including better cost alignment, increased reliability, and the prospect of future upgrades to unconstrain Bradley power.
In September, AEA was awarded a $21 million grant from the United States Department of Transportation to participate in the construction of a cargo storage facility at the Ted Stevens Anchorage International Airport. The project, known as the Alaska Cargo and Cold Storage, is a public-private partnership with McKinley Capital Management, LLC and partners. The grant funds AEA’s participation in Phase 1 of an approximately 715,000-square-foot, $220 million state-of-the-art facility boosting the airport’s value as an international shipping hub between the U.S. and Asia. By partnering with AEA for federal funding, ACCS reduces development costs and benefits from AEA’s expertise as it incorporates best-in-class energy efficiency in its facility.
Under Gov. Mike Dunleavy’s leadership, reducing the cost of energy is not only a priority and a critical component of Alaska’s economic recovery, but also key to providing opportunities for future generations of Alaskans. The Alaska Energy Authority, along with its Board of Directors, the governor and the Legislature, will continue to strive to deliver the lowest cost and most reliable energy to the Railbelt and rural Alaska.
Curtis W. Thayer serves as the Executive Director of AEA, a public corporation of the state of Alaska governed by a board of directors with the mission to “reduce the cost of energy in Alaska.”
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