Bradley Lake power line outage from wildfire tops $10M in cost to Alaska Railbelt ratepayers

The Swan Lake fire is still costing the majority of Alaskans through the continued outage of a power line that links the state’s population centers to low-cost energy produced on the Kenai Peninsula.

According to Chugach Electric Association spokeswoman Julie Hasquet, members are collectively paying between $30,000 and $50,000 per day in additional power costs — mainly burning more costly natural gas at its power plants — as a result of the transmission line between Soldotna and Cooper Landing being out of service.

North Anchorage residents and businesses are paying about $13,000 more per day due to the outage, Municipal Light and Power spokeswoman Julie Harris wrote in an email.

For Matanuska Electric Association members, the added fuel cost totals about $12,000 per day, said CEO Tony Izzo.

Farther north, Interior electric utility Golden Valley Electric Association officials informed their ratepayers Dec. 2 that the cooperative’s fuel and power purchase charge would be increased 19.8 percent through February to cover the cost of replacing the hydropower currently unavailable due to the line outage with more expensive generation fuels.

The rate hike equates to about an $11 per month increase to average residential customer bills, according to the utility.

Izzo said that as of Dec. 6, the added costs to Southcentral and Interior electricity consumers because of the transmission outage totaled roughly $10.4 million since the Swan Lake fire damaged power poles in mid-August.

Dubbed the “SQ line” for its route between Soldotna and a substation at Quartz Creek, the 115-kilovolt line links utilities in Anchorage, the Mat-Su, Fairbanks and Seward to the Bradley Lake hydroelectric project located across Kachemak Bay from Homer.

Since its startup in 1991, Bradley Lake has supplied up to 10 percent of the electricity needed by Alaska’s Railbelt utilities. At 4 cents per kilowatt-hour, the hydroelectric dam can produce power for about half the current cost of natural gas-fired generation and is some of the lowest-cost power in the state, according to the Alaska Energy Authority, which owns Bradley Lake.

However, capacity-constrained transmission lines between Bradley Lake and most Railbelt utilities have made maximizing the use of the project’s cheap and clean power a challenge that has simply been elevated by the Swan Lake fire damage.

The SQ line is one of several transmission segments between Bradley Lake and Fairbanks without any backup, or redundancy. Utility leaders and Regulatory Commission of Alaska officials have long discussed and debated the need to invest in upgrading the Railbelt electric transmission system, but finding equitable ways for the utilities to pay for the costly projects is a hurdle that has yet to be cleared.

While a second 115-kilovolt SQ line would de-constrain one section of the Railbelt transmission system, a 2017 study commissioned by AEA recommended against the project for its high costs, though a specific price was not cited.

At the center of the immediate problem are a handful of burned and damaged poles that support the three-wire SQ line along the challenging terrain near Jean Lake east of Cooper Landing and near the Sterling Highway corridor.

Delayed repairs

Managers from the other Railbelt electric utilities expressed frustration during a Dec. 6 Bradley Project Management Committee meeting over the time it has taken Homer Electric Association, or HEA, to prepare for the SQ line repairs and the lack of information available at the time.

HEA owns the SQ line; it was built in the late 1960s.

HEA officials who called into the meeting held at AEA’s Anchorage office initially said they did not know exactly how many poles needed to be repaired and they did not know if a crew was working on the line at the time.

AEA officials and other utility representatives said they believe 14 poles need to be replaced at an estimated cost of about $2 million.

Chugach Electric CEO Lee Thibert asked for daily updates from HEA.

“This is an urgent matter for the northern utilities,” Thibert said.

Jim Butler, Homer Electric Association’s incident management advisor, said Dec. 9 that the Kenai Peninsula utility has identified seven poles that need to be replaced before the SQ line can be turned back on.

AEA Executive Director Curtis Thayer said in a subsequent interview that he understands there to be 14 poles that eventually need to be addressed, but only a subset need immediate replacement.

The work to repair the line has been slow going for a host of reasons, according to Butler, who said crews couldn’t just rush into the area after the fire was largely suppressed in early September.

“The determination that the fire was quote-unquote out was sort of an initial step. We were advised by the (Kenai) Wildlife Refuge that the area that was impacted by the fire, particularly high fire intensity in the area of where the SQ line runs from mile 62 of the Sterling Highway east. There were significant ash pits and hazard trees in the area,” he said. “So that safety concern based on the advice of fire managers was something that we had to factor into timing and scheduling.”

The damaged section of the line runs through the Kenai National Wildlife Refuge.

After taking time to evaluate the area, which is a mix of wetlands and mountainous terrain, recent windstorms in Southcentral forced HEA to divert maintenance crews to other outages and likely made more burned trees unstable, Butler noted.

HEA was mobilizing equipment and crews to the area Dec. 9, according to Butler, who said it would likely take two or three weeks to restore power to the line if no other issues arise.

Another problem has been that the wetlands in the area are not frozen; work is typically done there in January or February when the ground is solid but the current conditions don’t afford that.

“We’ve been trying to be very practical about how to get in and unwind the odd and unique debris in an area that still has hot ground and make sure that everybody’s safe when they’re doing it,” Butler said.

Rising water

Adding another layer to the situation is the fact that the unusually warm fall weather on the Kenai Peninsula has meant that more rain that normal has fallen in the Bradley Lake watershed and raised the lake level past a key threshold.

Each Railbelt utility is normally apportioned a specific share of Bradley Lake power, but when that power can’t be transferred north — such as now — it is used by HEA.

The Bradley Lake operating agreements signed by the utilities call for HEA to repay the other utilities for using their share of Bradley Lake power when the lake is below “imminent spill” level, which is set at 1,175 feet. However, when the lake level is above 1,175 feet, the power can be used by any utility that can access it without the repayment obligation, according to Matanuska Electric Association officials. The true spill level is 1,180 feet.

HEA representatives said at the Dec. 6 committee meeting that the lake has been at about 1,179 feet for some time. That was before the most recent rainstorm.

They stressed that HEA has not intentionally slowed the work to capture more Bradley Lake power for its members, a message echoed by Butler.

“It’s an important piece of infrastructure; that’s not lost on anybody, but it’s also important that we approach this methodically and don’t end up getting somebody injured because I don’t think anybody wants that,” Butler said in an interview.

Potential sale

AEA’s Thayer said Dec. 10 that the situation has spurred discussions about the state-owned authority purchasing the SQ line.

HEA General Manager Brad Janorschke wrote via email that folks from his utility have talked to AEA about such a deal and they are continuing those discussions.

Officials from the state authority were meeting with HEA representatives that day to discuss the possible sale, which is in the preliminary stages, according to Thayer.

AEA already owns the 170-mile Alaska Intertie between Willow and Healy that connects Golden Valley with the rest of the Railbelt electric grid.

He said the value of the line and the corresponding price are obvious issues the sides still need to resolve, but he estimated it would be less than $25 million.

The SQ line could potentially be upgraded to help the northern utilities access their full share of Bradley Lake power exactly when it is most beneficial to them under AEA’s ownership, he added.

“The line belongs to Homer, it’s in their service territory but it doesn’t serve one (HEA) customer,” Thayer said.

Representatives from the other Railbelt utilities said they support AEA buying the SQ line in concept, with final support being contingent on the details of the transaction.

Thayer said AEA could ask the Legislature for an appropriation or it could turn to its sister authority, the Alaska Industrial Development and Export Authority, for help bonding for the money to make the purchase if the Railbelt utilities agree with that course of action.

If it is paid for with bonds the utilities would pay tariffs for transferring power across the SQ line to repay the debt.

AEA and AIDEA share a board of directors.

Thayer said he hopes to have the issue settled sometime in January whether AEA ultimately buys the SQ line or not.