ELECTRIC GENERATION AND TRANSMISSION ON THE RAILBELT Joe Griffith General Manager, MEA Chief Executive Officer, ARCTEC Anchorage Mayor ’ s Energy Task Force November 6, 2013 1
RAILBELT MAKEUP Electrical utilities are all cooperatives or municipalities • Anchorage Municipal Light & Power • • Seward Electric System Chugach Electric Association • Golden Valley Electric Association • • Homer Electric Association Matanuska Electric Association • 2
RAILBELT TRANSMISSION SYSTEM Connects utilities • Facilitates economic dispatch • Transfers power • • Shares Reserves 3
RAILBELT ELECTRICAL GENERATION 1 – Eklutna Generation Station (EGS) 2 – Bradley Lake 3 – Soldotna 4 – Nikiski 5 – Fire Island 6 – SPP 7 – ML&P Plants 2 & 2A 8 – Beluga 9 – Mount Spurr Geothermal Project 10 – Watana 11 – Eva Creek 12 – Healy 2 (HCC) 13 – Battery Energy Storage System (BESS) 14 – Zehnder 15 – North Pole 4
GENERATION All utilities have or will soon have their own generation capability • New generation cost is approximately $1 billion • • Utility balance sheets are stressed • No additional debt-assuming capability 5
RAILBELT GENERATION SUITE Chugach – Beluga, South Anchorage, IGT, Cooper Lake hydro, Eklutna hydro • AML&P – Plant 1, 2, & 2A (soon to be built), Eklutna hydro • • GVEA – North Pole, Eva Creek Wind, Healy 1 & 2, Aurora (IPP), BESS, Zehnder MEA – Eklutna Generation Station, Eklutna hydro, + 2 small IPPs • HEA – Nikiski combined cycle, Soldotna, Bernice Lake • • SES – Seward plant Note: All above participate in Bradley Lake hydro (state-owned IPP)- 124 mW capacity 6
SITUATION New generation system changes playing field due to transmission constraints • Limits Bradley Lake power deliveries when needed most. • • Railbelt economy demands reasonably-priced power (as does the rest of Alaska) 7
AEA TRANSMISSION STUDY Southern section upgrades proposed: • Quartz creek to University (AC) • • Additional conductor from Quartz Creek to Daves Creek • 230 kV upgrade from Daves Creek to University s/s DC tie line from Bernice Lake to Beluga • 2 nd 115kV line from Bradley Junction to Soldotna • Anchorage battery • • Northern Upgrades 230 kV Lake Lorraine to Douglas upgrade • • Douglas to Healy upgrade 8
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11 Slater Consulting August 2013
AEA TRANSMISSION STUDY – CASES MODELED • Scenario 1: All transmission upgrades • Scenario 2: Southern transmission upgrades • Scenario 3: Northern transmission upgrades • Scenario 4: No transmission upgrades 12
AEA TRANSMISSION STUDY – NO TRANSMISSION UPGRADES The system operates as a 5 separate utilities • Each provides its own reserves • The interface limit for Kenai North is 75 MW • • The transfer limit from Stevens (Talkeetna) to Cantwell is 75 MW North Pole CC is “must-run” Oct through Mar • • Bradley Spin is only 10 MW Commitment/Dispatch hurdles exist between all utilities • Opportunity cost of over $100 million per year • 13
ARCTEC 2014 REQUESTS Unconstrain Bradley Lake • • Silvertip Creek to Hope Substation 115 kV transmission line 4,500,000 • Powerline Pass to Indian 115 kV transmission line 5,000,000 • Eklutna hydro transmission upgrade 4,000,000 $24,000,000 • Battle Creek Diversion into Bradley Lake 50/50 Shared cost between State of Alaska and utilities. • TOTAL REQUEST: $37,500,000 14
INDEPENDENT POWER PRODUCERS (IPPs) Assert they can solve the problem Federal law: Public Utility Regulatory Policies Act (PURPA) • Avoided cost principle for Combined Heat and Power (CHP) utilities • • Must meet or beat avoided cost (2 types) • Firm and non-firm • Alaska RCA regulations mimic federal PURPA Rate of return: co-ops 3-5% / IPPs need 10%+ • • IPPs have filed with the RCA to disuage regulations IPPs pushing for Alaska statute changes to force utilities to accept their power at the • expense of ratepayers 15
SHORT-TERM ENERGY DELIVERY MITIGATIONS Decongest the transmission system to facilitate optimum use of Bradley Lake energy and • capacity Maintain Cook Inlet gas market • • Foster more exploration in Cook Inlet Import LNG and/or propane • 16
AEA TRANSMISSION STUDY – VALUE OF PROPOSED UPGRADES • $140,000,000 per year 17
CONCLUSION Without a program to rectify transmission shortcoming asap • Cost of electricity will continue to rise • Possible savings will be forfeited • • Alaska will not achieve its alternative energy goal Railbelt will be captive to Cook Inlet natural gas pricing and supply issues • 18
DISCUSSION / QUESTIONS 19
AEA TRANSMISSION STUDY – ALL TRANSMISSION UPGRADES CASE Base Case • The system operates as a single pool with a single system reserve requirement • The interface limit for Kenai North is 125 MW • Anchorage battery is 25 MW Bradley spin is 27 MW • 20
AEA TRANSMISSION STUDY – SOUTHERN TRANSMISSION CASES Case S1: Remove AC upgrades from Quartz Creek to University • The system operates as a single pool with a single system reserve requirement The interface limit for Kenai North is 100 MW • • Anchorage battery is 25 MW Bradley spin is 27 MW • Case S2: Remove DC tie • The system operates as a single pool with a single system reserve requirement The interface limit for Kenai North is 75 MW • Anchorage battery is 75 MW • Bradley spin is 27 MW • 21
AEA TRANSMISSION STUDY – SOUTHERN TRANSMISSION CASES Case S3: Do both S1 and S2 • The system effectively operates as 2 pools • Railbelt minus HEA • Shared reserves • HEA • HEA provides its own reserves • The interface limit for Kenai North is 75 MW Bradley spin is 27 MW • Commitment/Dispatch hurdles exist between all other companies and HEA • 22
AEA TRANSMISSION STUDY – SOUTHERN TRANSMISSION CASES Case S4: Case S3 + remove 2nd line from Bradley to Soldotna • The system effectively operates as 2 pools • Railbelt minus HEA • Shared reserves • HEA • HEA provides its own reserves • The interface limit for Kenai North is 75 MW Bradley spin is 10 MW • Commitment/Dispatch hurdles exist between all other companies and HEA • 23
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