OPINION: Delay and distraction endanger our energy future

Tim Bradner’s article in the April 21 edition of the ADN (“Carbon capture could expand Alaska power options”) argued that Southcentral should seriously consider a coal-fired generation plant to supplement our dwindling supply of natural gas from Cook Inlet. There was a more critical look at the same proposal by Roger Painter in the April 28 opinion section (“Alaska’s ‘clean coal’ misadventure shows dangers of jumping aboard energy hype”). As Chugach Electric Association board members, we appreciate thoughtful commentary and ideas — these two well-written articles demonstrate why we must remain open to new ideas but insist on solid analysis before making choices. What was not highlighted by either article is the real risk we see in this proposal: distraction and delay.

It would take at least 10 years to design, obtain permitting and construct a plant such as the one described. A new coal plant is not a short- to midterm option for diversification. Hilcorp’s contracts for “all requirements” gas delivery to the electric utilities will end before a coal plant could be built. Homer Electric has already had to make alternative arrangements, next year MEA, then Chugach in March of 2028. The production curve that the state Department of Natural Resources projects for Cook Inlet gas, which includes “proven but undeveloped reserves,” roughly equals projected demand in 2025 and 2026, then falls below projected demand by 2027 or 2028.

The same timing issue also means we can’t rely on a North Slope gas line or a new hydro project to solve our gas supply issues. Even if the Legislature appropriated enough money to begin the construction process today, by the time such a project could be built, we would have already had to come up with alternative ways to keep the lights on. The serious risk of being distracted now is that if we don’t secure a new gas supply very soon, the Railbelt will run short of natural gas, our most common heating fuel, during a future cold-weather event.

Chugach is actively making short- to midterm plans to obtain and store enough natural gas to meet our utility’s needs even in the face of adverse conditions. In the midterm, we can reduce pressure on our existing gas supplies by aggressively integrating renewable energies and conserving fuel so that we can use it to balance our loads. As an example, we are evaluating a wind project proposal on the West side of Cook Inlet. We estimate this wind project could reduce gas consumption by up to 3.5 bcf of natural gas per year, (approximately a quarter of Chugach’s 17 bcf annual consumption). We can stretch our gas for use when the wind isn’t blowing. We hope to begin bringing that project online in the next three years, a fraction of the time required for a coal plant or natural gas line.

Currently, 80% of our generation is fueled by natural gas. Chugach members have invested many millions of dollars in highly efficient gas-fired generation plants; most of them have many years of useful life left. Natural gas generation is dispatchable. If we have gas, we can fire up a plant and generate electricity on demand. Natural gas will remain a major part of our portfolio for years to come. But the rising cost of natural gas means the price of electricity generated with it will increase. Faced with increasing prices, we intend to extend those gas reserves by rapidly diversifying our portfolio to include sustainable and renewable power.

If we follow through, this kind of mid-term planning can complement and facilitate the examination of long-term solutions: hydropower, geothermal, tidal or even a coal plant. Long-term planning gives us the opportunity to develop more complete cost evaluations (lacking in Bradner’s article but suggested by Painter’s) so that we can realistically evaluate the costs and impact on rates of such projects.

Some issues can be separated. For example, no matter how we generate, whether we continue to rely on gas or move to diversify to renewables, we need better transmission. The Railbelt utilities are working together on an improved transmission system, and the Legislature appears to support taking advantage of matching federal funds.

This kind of planning takes time and stability. Last winter, even though Enstar announced we were having an energy emergency, the lights stayed on. Chugach has contracts with producers for its gas needs further into the future and at less cost than any of the other Railbelt electric utilities. That is the kind of reliability and stability we stand for.

Mark Wiggin is an engineer with oil and gas field production experience. Sam Cason is an attorney with regulatory and litigation experience. Both have been actively involved in electric utility issues for decades and are running for re-election to the Chugach Electric board of directors.

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