Railbelt Electrical Transmission System Update 11/03/2018
Within the past four years, initiatives on how the 6 Railbelt utilities will organize themselves in a more efficient manner have seen movement.
- The 2014 Alaska State Legislature tasked the Regulatory Commission of Alaska (RCA) to determine if the creation of an independent system operator (ISO) or similar structure for Railbelt electrical utilities is the best option for effective and efficient electrical transmission.
- In response, a June 30, 2015, RCA letter to the Legislature stated recommendations that included the creation of an independent transmission company to operate and maintain the transmission system, system-wide merit order economic dispatch of Railbelt electrical generation, and enforceable and consistent operating and reliability standards. The RCA gave the utilities an indefinite period of time to address their recommendations.
- In the last 4 years, two bills have been introduced in the Legislature to establish an ISO, The latest was HB382 in 2018 by Rep. Adam Wool of Fairbanks to create a Railbelt Electrical System Authority (RESA) as a division of the RCA.
- The Alaska Railbelt Cooperative Transmission and Electric Company (ARCTEC) is a co-operative of the 6 Railbelt utilities formed in 2011 to address generation and transmission service needs. In 2017, they contracted with GDS to create an entity called the Railbelt Reliability Council (RRC).
- In January 2017, the 3 Anchorage serving utilities of MEA, Chung Electric Ass, and Municipal Light and Power promised the RCA to develop a “tight power pool” for the economic dispatch of electricity to the Anchorage area. This was a big deal in the media. These 3 entities have voluntarily done a “loose power pool” since then. According to MEA testimony, this resulted in $16 million in cost-saving benefits the first year.
- The year-long process by GDS resulted in a final report in the spring of 2018. The function of economic dispatch for the entire railbelt was not recommended. Instead, a proposed study of cost/benefit analysis should be undertaken by the RRC. The main purpose of the RRC is to develop, adapt, and enhance reliability, physical and cyber security standards, adopt and enforce system-wide interconnection protocols, regional integrated planning, and evaluate regional security constrained economic dispatch.
- September and October 2018, the RCA held 3 hearings on utility progress in all these processes. The RCA will communicate to the Alaska Legislature in January 2019, the progress that has been made.
Out of these hearings, the public learned:
- The three utilities effort to create a tight power pool via a formal 20 year agreement has been “paused” and put on hold until 2021 until the merger between MLP and CEA is approved. RCA Commissioners were disappointed with that.
- A Memorandum of Understanding between the utilities to approve the RRC has not been signed. An Implementation Committee has been set up to drive the process.
- There is no transmission company created. Instead there is tentative agreement on 7 categories of issues.
- There is no non-discriminatory open access interconnection standards.
- And the talk of an ISO has dissipated, replaced by the creation of the RRC. The public questions whether this is adequate.
This participant has testified to the legislature and the RCA and can safely say that the RCA is very frustrated at how long all this is taking. They want the utilities to voluntarily do all this, but it is very slow. And this slowness is not serving the public interest.
ISOs are common in the lower 48. An ISO would be a non-profit railbelt wide operator that includes a variety of stakeholders on the governing board regulated by the RCA. An ISO would do integrated planning for the entire region, merit order economic dispatch, enforce reliability standards, non-discriminatory open access to the grid by all qualified independent producers, and develop a universal transmission tariff.
Merit order economic dispatch is region wide dispatch that turns on the generators in the order relative to their thermal efficiencies, location, and fuel price. It would be the most efficient and lowest cost.
A “Transco” is a transmission only company that would own the transmission assets, operate and maintain it and carry out new transmission. Theoretically, the ISO should happen first before the Transco.
The strength behind the movement toward “reform” was that the railbelt utilities spent $1.5 billion for new generation this decade. They overbuilt, and ratepayers have to pay for it. Right now, we have a balkanized system of 6 electrical fiefdoms. Their allegiance is to their own ratepayers and not the whole region. The public wants reform so that renewable independent energy can competitively come on the grid. Energy conservation, efficiency, region wide integrated planning and low cost energy will prove that a proposal like the Susitna Dam is not needed.