OPINION: What importing natural gas could mean for you, the Alaska power consumer

The Alaska Railbelt communities, including Chugach Electric’s service area, have serious energy challenges with a looming natural gas shortage. Recently, there has been much discussion regarding importing liquefied natural gas (LNG), with some expressing concern that LNG is not an appropriate solution to solving our energy challenges. We recognize the concerns of some Alaskans regarding importing LNG despite the vast gas reserves on the North Slope. However, as largest electric utility in the state, we cannot rely on the hope that North Slope gas will be available soon, that there will be sufficient development in the Cook Inlet basin, or the timely development of another project to address the pressing needs of the region.

Concern has been expressed over the potential increase in your electric bill due to the cost of LNG. Your Chugach electric bill will not be going up by 50% if we import LNG. We have heard this and other numbers over the past several months. For Chugach Electric members, we estimate bills would go up approximately 10% when LNG is imported in 2028. Why is that? It is because only a small portion of your electric bill will be impacted by replacing our current Hilcorp Alaska gas contract with imported LNG. The majority of Chugach’s cost structure is not impacted by fuel costs, including the non-fuel costs of operating and maintaining our power plants, our transmission system, our distribution system and our customer service function.

We must remain laser-focused on ensuring reliable electric service, the certainty of reasonably priced natural gas, and increased diversity of electric power generation, including renewable projects. Currently, 80% of Chugach’s generation is produced using natural gas, with hydro and wind making up the remaining 20%. While working to diversify our generation mix, Chugach needs a bridge fuel supply to a renewable future, and that is imported LNG.

Chugach has set a goal to reduce our carbon intensity, from a 2012 baseline year, by at least 35% by 2030, and by at least 50% by 2040, provided there is not a material negative impact to electric rates and/or reliability. We recently updated our Integrated Resource Plan, found on our website (chugachelectric.com), which outlines our plans for decades to come. Please take a look.

We work every day to ensure we are providing the most reliable and affordable generation we can for our more than 91,000 members and over 113,000 metered locations. We always have these goals and our members in mind as we make our decisions, and we know affordable energy is crucial for a robust economy. As a not-for-profit, member-owned cooperative, we are in this together.

Arthur Miller is the CEO of Chugach Electric Association.

Mark Wiggin is board chair for Chugach Electric Association.

The views expressed here are the writer’s and are not necessarily endorsed by the Anchorage Daily News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)adn.com. Send submissions shorter than 200 words to letters@adn.com or click here to submit via any web browser. Read our full guidelines for letters and commentaries here.