Three Alaska Railbelt electric utilities are teaming up to pool power generation, which they say will reduce costs and could save customers money.
Chugach Electric Association, Matanuska Electric Association and Anchorage's Municipal Light & Power announced Monday that they have signed an agreement that "solidifies work of the utilities on a power market, allowing the utilities to buy and sell power when it is more economic than generating their own," they said in a news release.
The power pooling agreement is expected to save between $12 million and $16 million each year for the utilities in fuel, operations and maintenance costs, and reduce carbon dioxide emissions by up to 120,000 tons per year, according to the companies.
For customers, the change is expected to translate to a rate reduction of about 2 percent if all other costs remained the same, Chugach Electric CEO Lee Thibert said at a Monday press conference. But it's hard to predict exactly how much money it might save consumers.
"Our focus is really all about increasing reliability while decreasing costs," said Tony Izzo, CEO of MEA. "What we're doing is combining those generation assets, planning and using them in such a way that we maximize efficiency and use the lowest amount of fuel possible."
Thibert offered one example of how the agreement would work, saying that Chugach Electric right now is using its Beluga Power Plant, which "has a high heat rate, so it's not as efficient."
"Once we have the pool together, once ML&P has their new plant up and running, we'll be able to purchase power from that unit, which is much more efficient than our Beluga unit," he said.
Different times of the year — and even different times of day — mean different energy demands.
"It's just using all of your different resources depending on a specific demand at any given time, for what's going to be the most efficient," said Julie Estey, spokeswoman for MEA.
The utilities have already been pooling power informally, she said, but have now formalized the agreement and filed it with the Regulatory Commission of Alaska.
Over the next year, the utilities will work out the details of the agreement and associated payments.
Golden Valley Electric Association, Homer Electric Association and the city of Seward will also be able to join the agreement.