Weeding through Railbelt energy solutions

Lawmakers tried Thursday afternoon to weed out the winners and losers among a half-dozen proposed energy projects serving the Railbelt, Alaska's most populated area spanning Anchorage and the Kenai Peninsula north to Fairbanks.

Power now comes mostly from natural gas produced out of Cook Inlet. The problem is production is slowing, and reserves are harder to get to - that means more expensive gas, if companies can be convinced to boost activity at all.

Lawmakers pulled officials with the proposed projects in to Juneau on Thursday afternoon to answer basic questions - how much could the projects cost, how soon would they be feeding power into the electric grid, and how much could consumers expect to pay out for that power in heat and light bills. Not all are state-sponsored, but most at least involve state tax credits or state land, if not huge amounts of state money.

The projects are Susitna hydro, by the Alaska Energy Authority; Mount Spurr geothermal by Ormat; the state's instate natural gas pipeline plans; CIRI's coal gasification (read our story on the project roll-out here) and Fire Island wind projects; and the Chakachamna hydro project by TDX Power.

All the projects have been on the table for awhile, and all have their challenges, from flat-out uncertainty (instate natural gas) to extraordinary price tags (Susitna hydroelectric dam). Almost all have regulatory and permitting issues involving salmon runs, protected lands or federal approvals.

The meeting started at 3 and was still going on at 6 p.m. A highlight so far? Rep. Charisse Millett, R-Anchorage, drew out a real disconnect involving an instate natural gas pipeline.

Southcentral utilities' contracts for Cook Inlet gas should run through 2011, she said. A large-diameter natural gas pipeline, as proposed by TransCanada and by Denali, wouldn't be sanctioned until 2014, with operations scheduled after 2020. That leaves quite a gap, she said, asking instate gas coordinator Bob Swenson what constituents should make of that.

The administration has stressed that an instate line is a back-up plan in case a big line fails, she said. But that leaves Alaska without answers for too long. Rep. Jay Ramras, R-Fairbanks, told Swenson many legislators were losing patience with the administration's instate gas plans.

The Railbelt's six electric utilities are considering banding together as a joint corporation, pushed by former Gov. Sarah Palin. Future state funding for major power projects, like those discussed Thursday, could be contingent on their participation. In a comprehensive study released late last year, state consultant Black and Veatch said the utilities will have to work together in order to accumulate the bonding capacity necessary not only to fund major projects, but also to cover transmission upgrades critical within the next decade. The study estimated $10 billion will have to go into Railbelt transmission and generation within the next 50 years. (We reported the results of that study here)

Senate and House versions of a bill establishing a joint corporation are scheduled for hearings next week. SB 143 goes before the Senate Energy Committee at 3:30 p.m. March 17. HB 182 will be heard by the House Energy Committee at 3 p.m. March 18.