Opinion: Planning for natural a gas supply in Southcentral Alaska this winter and beyond

As we approach the new year, there continues to be significant discussion on natural gas supply for Southcentral Alaska utilities. In 2022, Hilcorp Alaska informed the utilities it will not extend gas contracts beyond their current expiration dates. These dates vary for each utility, with Chugach Electric Association Inc.’s contract with Hilcorp set to expire on March 31, 2028.

Chugach is a member-owned, not-for-profit electric cooperative, and we are working to diversify our generation mix. The good news for Chugach members is that we currently meet approximately 60% of our gas requirements through our two-thirds working interest ownership in the Beluga River Unit (BRU) gas field. The remaining 40% comes from our contract with Hilcorp, who is the operator and other working interest owner in the field.

We need a bridging fuel supply for the 40% of our natural gas that comes from our Hilcorp contract, and that fuel is imported liquefied natural gas. We are working with other Alaska utilities and companies to identify the best LNG solution and confidential negotiations with potential partners and suppliers are ongoing, with decisions expected soon.

With those efforts underway, Chugach is ready for the new year and the cold weather it will bring. We have the natural gas we need to serve our members, and we stand ready to work with others. You may remember earlier this year, during the January/February cold snap, two of five wells at the Cook Inlet Natural Gas Storage Alaska (CINGSA) storage facility were down, which reduced gas deliverability to local utilities. Located on the Kenai Peninsula, CINGSA is Alaska’s first and only commercial natural gas storage utility. With two wells restricted, electric utilities were asked to use less natural gas to ensure there was enough available for heating purposes. Because electric utilities have the option to supplement our thermal generation with renewable generation like hydro, solar and wind to generate electricity, we worked together to solve the short-term natural gas deliverability issue.

Additionally, we have been working on other fronts to ensure available natural gas. Chugach has co-invested in 15 new wells at BRU with Hilcorp, and five more wells are planned for 2025. We currently contract for 2.1 billion cubic feet (Bcf) of gas storage service with CINGSA and we are evaluating the feasibility of adding up to 20 Bcf of gas storage at the BRU. Efforts are being made to optimize investment in the gas field.

In October, we commissioned a 40-megawatt, two-hour Battery Energy Storage System (BESS), owned 75% by Chugach and 25% by Matanuska Electric Association Inc. The BESS is expected to reduce Chugach’s annual gas use by about 5%. Additionally, the BESS is already proving to be a useful tool by providing contingency reserves, which allows the system to respond instantly to changing grid conditions, increasing reliability and providing greater operational efficiencies.

As the state’s largest electric utility, Chugach’s priority is providing safe, affordable and reliable power to our more than 91,000 members. The future of energy in our state will include more renewable energy, increased storage of natural gas, more battery storage, new gas from the Cook Inlet Basin, imported LNG, and potentially gas from the North Slope. We are considering all options as our focus is both short and long-term energy security. We recognize our obligation to ensure that our members and the communities we serve have reliable power both today and well into the future.

Arthur Miller is CEO of Chugach Electric Association. Mark Wiggin is the chair of Chugach’s board of directors.

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.