State energy planners expect a 50-year economic plan for the Railbelt's six electric utilities to help make the case for major cooperation on power generation and transmission.

Due out at the end of November, the plan -- called the Railbelt Integrated Resource Plan -- offers a roadmap for building up electric generation and transmission infrastructure through the state's most populous region. The plan pinpoints the best options for future infrastructure with minimum long-term costs to rate payers, Alaska Energy Authority project manager Jim Strandberg said.

Speaking with the International Association for Energy Economics on Monday in Anchorage, Strandberg laid out the driver for bringing the six utilities into a single corporation -- according to AEA's analysis, that's the only way to boost the utilities' borrowing capacity to fund large power generation projects and transmission upgrades that will bring ratepayers from Fairbanks to Seward reliable power at reasonable cost. Each utility would still control its own distribution network.

Cooperation for efficiency's sake

The generation and transmission infrastructure throughout the Railbelt is fragile and unlikely to meet even basic load demands in the near future, Strandberg said. He gave his own age as 61 -- the infrastructure's, he said, is closer to 70.

Meanwhile, changing fuel supplies and prices are forcing a second look at where electricity comes from, and how it gets to users. Some utilities generate electricity from natural gas, but others are heavily reliant on diesel fuel, which translated into hefty surcharges on consumer bills when oil hit its $140 per barrel high in 2008. Even those utilities with natural gas feedstock aren't safe -- Cook Inlet natural gas supplies aren't enough to meet Southcentral demand at peak usage. Some power distributors, such as the City of Seward, have been warned they may need to kick-start backup diesel units if Southcentral runs short on gas this winter.

"We've just arrived, to a certain extent, at a perfect storm," Strandberg said.

A bill former Gov. Sarah Palin introduced halfway through the last legislative session would draw all six utilities into a single corporation for generation and transmission. She said future state funding for power projects would likely be contingent on the utilities' cooperation.

Joe Balash, who works on energy issues for Gov. Sean Parnell, said the new governor also supports the utilities working together for reliable, reasonable power.

"If your cost of energy is spiking, the likelihood you're going to attract any new business is pretty low," Balash said. "If the utilities want the state to help (with new infrastructure), then from a public interest standpoint we are going to demand it be done in the most efficient manner possible."

A 2008 study suggested Railbelt ratepayers could realize up to $40 million in savings in the future if the utilities work together on new generation and transmission, using tax-exempt revenue bonds.

But legislators in charge of the House and Senate committees that caught the bill said they weren't about to force the utilities into order -- at least until the utilities had ample time to come together on their own.

Some are headed that way. Matanuska Electric Association's board of directors was expected to take up a cooperation agreement at a Monday night meeting, signaling its intent to work with Chugach Electric and the City of Seward, which imports almost 90 percent of its power from Chugach.

The holdouts

Not all the Railbelt utilities are on board. While three are willing to work toward a single corporation, another three with more unique needs aren't quite there yet.

The outliers include Anchorage's Municipal Light and Power, which as a municipal utility has access to federal bonds and other funding streams; Homer Electric Association; and the distant Golden Valley Electric Association, serving Fairbanks.