HomeMy WebLinkAboutAEA 2012 Report To Alaskans 2012-A2012 report to alaskans
Alaska Energy Authority (AEA) is a public
corporation of the state. The Alaska State
Legislature created the Authority in 1976.
AEA’s mission is to reduce the cost of energy in Alaska
This report was printed at a cost of $3.48 per copy and was printed in Anchorage, Alaska.
Design and production by Northwest Strategies. Printed by PIP Printing.
Report to Alaskans 2
Governor’s Letter 5
Alaska Energy Statistics 6
AEA Project Highlights 7
AEA Programs
Statewide 15
Regional 20
Rural 21
Management Team 24
Board of Directors 24
Financial Highlights 25
AEA’s mission is to reduce the cost of energy in Alaska Contents
report to alaskans
December 2012
2012 marked another successful year for aea as a statewide energy policy leader,
working to reduce the cost of energy in alaska.
renewable energy Fund projects continue to be developed across the state. aea
continues to move forward with susitna-Watana Hydro on the railbelt, and in rural
alaska, aea brings positive results to many communities through a wide range of
programs.
a major highlight of 2012 was our work to advance the Federal energy regulatory
Commission (FerC) licensing process for susitna-Watana Hydro. this project would
help alaska reach the goal of producing 50 percent of our power from renewable
resources by 2025, and would provide clean and reliable power for generations.
through the aea-administered renewable energy Fund (re Fund), $202.5 million for 227
renewable energy projects has been approved. six application periods are complete,
and the first 62 renewable energy projects to either be in operation or construction will
provide net benefits of $501 million during their lifetimes. the re Fund investment in
these projects is $112 million. re Fund highlights in this report include the Chuniisax
Creek Hydroelectric project and the anchorage landfill-Gas-to-energy project.
throughout rural alaska, aea has completed 72 of 109 Bulk Fuel Upgrade projects and
51 of 114 rural power system Upgrade projects. since 2000, in partnership with the
Denali Commission, aea has completed more than $304 million in rural Bulk Fuel and
rural power system Upgrade projects. In the following pages you will see highlights of
upgrade projects in akiak and takotna.
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the energy efficiency and Conservation
program continues to make a positive
impact in alaska communities, in
some cases providing immediate
cost savings. efficiency measures
implemented through the Village
energy efficiency program and the
energy efficiency and Conservation
Block Grants program returned an
average of $0.29 immediate savings
on every dollar invested, with annual
savings continuing into the future.
the alaska Commercial energy audit
program targets privately owned
commercial buildings, and audits
revealed average savings of 30 percent.
our work on a whole-village retrofit in
emmonak is highlighted in this report.
aea’s newest program is the recently
created emerging energy technology
Fund, an exciting program designed
to test emerging technologies that
have the potential to be brought to
Continued on page 4
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commercialization in five years. after rigorous review of 70 proposals, 16 projects were selected for funding
in 2012.
aea continues to lead statewide energy policy and program development, and regional energy planning
for alaska. on the railbelt, aea owns two key energy assets: the alaska Intertie and Bradley lake
Hydroelectric project. Bradley lake Hydro produces the lowest cost power generation on the railbelt and
the project is featured in this report.
on behalf of aea’s Board, management and staff, we thank Gov. parnell, alaska’s lawmakers and all
alaskans for their continued support of aea and its commitment to helping move our state toward a bright
energy future.
sincerely,
sara Fisher-Goad
executive Director
Continued from page 3
4
Governor’s letter
February 2013
Dear Fellow alaskans,
as a public corporation of the state of alaska, the alaska energy authority (aea) is an
integral part of our efforts to light, heat, and power alaska by developing renewable
energy sources, upgrading rural power systems, training local residents, and more.
the mission of aea is to reduce the cost of energy for alaskans.
not only is aea working to reduce power costs, but its efforts also create new
opportunities for economic development and jobs for alaskans by unlocking alaska’s
resources for alaskans’ benefit. aea leads the effort on critically important projects,
such as the susitna-Watana Hydroelectric project and the Interior energy plan, to
bring long-term, reliable energy to alaskans.
I appreciate aea’s work to energize and grow alaska’s economy and reduce the cost
of energy. together, we will build a more secure, stable energy future for all alaskans.
Best regards,
sean parnell
Governor
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a preliminary report that provides a detailed examination
of electricity in alaska as of 2011 was released in 2012. the
alaska energy statistics 1960-2011 was prepared by the
Uaa Institute of social and economic research (Iser) in
collaboration with aea.
• Preliminary numbers show that, of the approximately 6.5
million megawatt-hours of electricity generated across alaska
in 2011, natural gas generated 58 percent, hydroelectric
power 20 percent, diesel and other oil products 16 percent,
coal 6 percent and wind less than 1 percent.
• The Railbelt region generates most of its electricity
with natural gas, but also some with hydropower. Many
communities in southeast alaska rely on hydropower, but
some depend entirely on diesel. rural communities in
Western and Interior alaska rely primarily on diesel to generate electricity, but wind power is being added in a
growing number of rural locations, financed largely by the Denali Commission and the alaska re Fund.
• On average, residential use of electricity per customer in Alaska was about 7,770 kilowatt-hours in 2011. That’s
considerably less than the national average of 11,500 kilowatt-hours. But use within alaska varied widely,
depending on the price of electricity—from 1,500 kilowatt-hours in places where electricity is most expensive to
14,900 kilowatt-hours where it is least expensive.
alaska energy statistics
Wind less than 1%
Gas 58%
Hydro 20 %
Coal 6%
Oil 16%
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Akiak
Rural Power System Upgrades
the City of akiak is located on the west bank of the kuskokwim river, approximately 42 air miles from the
regional hub of Bethel.
the community’s old powerhouse and generators were past their useful life, and akiak residents faced electricity
rationing. aea replaced the existing system with a new, modular powerhouse equipped with four efficient,
250-kilowatt diesel generators, fully automated switchgear, remote monitoring and a heat recovery system.
a new powerhouse site was chosen to facilitate recovery system heating to the water treatment plant and to the
city office. aea installed a double-wall intermediate fuel tank at the new powerhouse to receive fuel from the
main bulk fuel tank farm.
With this upgrade in akiak, the community is experiencing a 13 percent improvement in kilowatt-hours generated
per gallon of diesel fuel. this translates into a savings of nearly $50,000 annually. aea is pleased that its work in
akiak is helping the community reduce its cost of energy.
project Highlights
7
Anchorage Landfill-Gas-to-Energy
Project
Biofuels Energy System
alaska’s first landfill-Gas-to-energy project received
funding from the re Fund, with additional funding
from Doyon Utilities and the federal government.
located on Joint Base elmendorf-richardson (JBer)
in anchorage, the project was planned, designed and
constructed within budget.
Four Ge Jenbacher J420 Gas engines and other
integrated equipment power the project, which utilizes
methane gas produced from the anchorage regional
landfill. the project will provide an estimated 56,000
megawatt-hours per year, which is 26 percent of
JBer’s annual use, and is expected to produce more
than $50 million in savings over its life.
the anchorage landfill-Gas-to-energy project is a
great example of how a re Fund project came to life
with community and military support. With its use of a
locally available, renewable fuel supply, this project will
help meet electricity needs on alaska’s JBer.
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Banner Year for Alaska Wind Projects
at the start of 2012, alaska had 15.3 megawatts of installed wind capacity. By the end of the year, the
total installed capacity had increased to 63.8 megawatts.
Eva Creek
Golden Valley electric association’s eva Creek wind farm, south of Fairbanks, is the largest in alaska with
24.6 megawatts of installed capacity. the eva Creek project is also home to the largest wind turbines in
the state: the repower MM92 2.05 megawatt turbine. the 12 turbines are projected to generate 76,000
megawatt-hours of electricity annually.
Fire Island
to the south, on the railbelt grid, Cook Inlet region, Inc. installed 17.6 megawatts of wind power
capacity at the Fire Island wind farm near anchorage. eleven Ge Xle 1.6 megawatt wind turbines are
expected to produce 51,000 megawatt-hours of electricity per year.
Kotzebue and Kodiak
these two hub communities expanded their wind farms in 2012. kotzebue electric association moved into
the large wind turbine arena with the installation of two 900 kilowatt eWt 54 turbines. this addition nearly
tripled the size of their existing wind farm. kodiak electric association doubled their pillar Mountain wind
farm capacity from 4.5 megawatts to 9 megawatts with the addition of three Ge 1.5 megawatt turbines.
In addition to these large systems, smaller wind turbines were commissioned in kongiganak, kwigillingok
and tuntutuliak.
aea is pleased with the increase in alaska’s wind power capacity and proud of the various roles the
authority plays in helping communities and regions develop viable systems that can make a difference.
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Bradley Lake Hydroelectric
AEA-Owned Project Provides Low-Cost Power to the Railbelt
the Bradley lake Hydroelectric project is located 27 air miles southeast of Homer on the kenai peninsula. the
project, which has been producing power since the mid-1990s, provides 5 to 10 percent of the railbelt’s annual
electric needs at an average cost of $.04 per kilowatt-hour. this is the lowest power generation cost on the railbelt.
the project consists of a 125-foot high, concrete-faced, rock-filled dam structure, three diversion structures, a
3.5-mile long power tunnel and vertical shaft, generating plant, interior substation, 20 miles of transmission line
and substation. Due to its remote location, the Bradley lake Hydroelectric project has its own airstrip, boat dock,
residential quarters and utility system.
operated by Homer electric association under contract with aea, the project is most important to the railbelt
electric system during the cold winter months, when demand for power is at its highest.
aea is proud to own and oversee the Bradley lake Hydroelectric project, a valuable asset that assures railbelt
residents from Homer to Fairbanks, as well as the Delta Junction area, with long-term power at a stable cost.
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Chuniisax Creek
Hydroelectric Project
With funding from the re Fund, the power project Fund and the U.s.
Department of Commerce economic Development administration,
aea helped the western aleutians community of atka complete the
Chuniisax Creek Hydroelectric project in 2012.
this hydroelectric project will provide for nearly all of atka’s current
electricity needs, including a portion of the energy atka pride
seafoods uses to operate its fish processing facility. the project
is expected to save the community more than $180,000 per year
in diesel fuel costs. additionally, excess power from the project
has the potential to provide even more savings in the future with
the installation of dispatchable electric boilers to heat community
buildings.
the scope of the Chuniisax Creek Hydroelectric project included
construction of a 13-foot high, reinforced concrete buttress dam and
intake, 1,050 feet of penstock, 2,600 feet of transmission line, and
switchgear and controls to allow integration of the hydropower plant
with the existing diesel powerhouse.
alaska’s western aleutian region is home to extreme weather
conditions and significant logistical challenges. aea is proud of
its role in helping atka residents meet these challenges to build a
hydroelectric project that will provide the community with a reliable
energy source and stable energy costs for years to come.
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Emmonak Whole Village Retrofit
Energy Efficiency and Conservation
located near the mouth of the Yukon river in Western
alaska, emmonak is a community of 796 people. With
funding from the Village energy efficiency program, and the
energy efficiency and Conservation Block Grant program,
aea initiated a whole village retrofit to help reduce the
community’s cost of energy.
energy efficiency professionals audited eight community
buildings and performed efficiency retrofits that are projected
to provide $90,000 in annual savings. twenty-seven percent
of total savings were found through measures that reduce
electricity consumption, such as lighting upgrades and
installation of occupancy sensors. the remaining 73 percent
of total savings resulted from measures that reduce fuel
consumption. these improvements include boiler tune-ups and
replacements, hot water system upgrades and the installation
of programmable thermostats.
With the total cost of energy efficiency and conservation
improvements in emmonak at just under $670,000, aea’s work
in the village is an example of how a community can achieve
significant savings over time, with no reduction in the level of
service the community receives.
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Takotna
Rural Power System Upgrades – Electrical Distribution
located in Interior alaska on the north bank of the takotna river, 17 air
miles west of McGrath, the community of takotna had an obsolete, non-
standard and inefficient electrical distribution system.
existing poles, cross arms, transformers and conductors were failing and
unsafe. the 277/480 V single-phase system required replacement with a
new, rural Utility service Compliant 7.2/12.47 kV three-phase system.
aea collaborated with the community on the new design and provided
assistance in procuring materials required for the project. new, taller
power poles with ten-foot cross arms ensured safe clearance and
separation for the three-phase distribution conductors.
aea rural Utility Workers, assisted by a strong community workforce,
completed the upgrades. the result for takotna residents is a safe,
reliable, balanced and efficient electrical distribution system.
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aea programs - statewide
Renewable Energy Fund
the alaska state legislature created the renewable energy Fund (re Fund) in 2008. this legislation placed
alaska at or near the forefront of the 50 states in funding for renewable energy. the legislature authorized aea
to manage the re Fund project application process, project evaluations, recommendations, completion of grant
agreements and disbursement of funds to grantees. aea began soliciting applications for re Fund grants in the
fall of 2008, and to date, has received 643 applications. six application periods are complete, with the round 6
application period having closed in september 2012. aea evaluates all applications received. to date, $202.5
million for 228 renewable energy projects have been approved. through December 2012, $114.5 million in
grant payments have been made. eighty-eight percent of rounds 1-5 re Fund projects are under way. the first
62 renewable energy projects to either be in operation or be in construction will provide net benefits of $501
million over their lifetimes. the re Fund investment in these projects is $112 million.
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Emerging Energy Technology Fund
aea manages the recently created emerging energy technology Fund program. Its purpose is to fund
demonstration projects that test emerging energy technologies or methods of conserving energy; improve
an existing energy technology; or deploy an existing technology that has not previously been demonstrated
in alaska. successful applicants will need to accomplish these objectives and have a reasonable expectation
to be commercially viable within five years. the legislature appropriated $4.8 million to the emerging energy
technology Fund. In addition, the Denali Commission contributed $4.8 million.
In response to its request for applications, aea received 70 proposals. aea and the emerging energy
technology Fund advisory Committee worked together to review and evaluate all proposals. sixteen projects
were selected for funding in 2012.
Power Project Fund
this program provides loans to electric utilities, regional electric authorities, local governments, regional and
village corporations, and independent power producers for smaller scale alaska energy projects. loans can
be made for reconnaissance and feasibility studies, license and permit applications, design and construction
of projects. the program is directed at power projects with less than 10 megawatts output capacity, bulk fuel
facilities, and transmission and distribution facilities. the program also provides for financing of waste-to-energy
projects, energy conservation and energy efficiency projects, and alternative energy facilities and equipment.
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Alternative Energy and Energy Efficiency
aea’s alternative energy and energy efficiency program
promotes the use of renewable resources as alternatives to
fossil fuel-based power and heat, and measures to improve
energy production and end-use efficiency. In rural areas the
program may support developing local sources of coal and
natural gas as diesel alternatives. this program currently
manages projects and initiatives totaling $234 million in
state and federal funding, and is divided into eight separate
program areas:
• The Alaska Energy Data Inventory, a collaborative
project between aea, the alaska Department of natural
resources, and the University of alaska’s Geographic
Information network of alaska, is compiling renewable and
fossil resource data, energy supply and usage, and other
information useful for energy planning and development.
• AEA’s Biomass Energy program develops projects using
wood, sawmill residue and municipal wastes for energy;
tests air emissions and performance of fish oil and diesel
blends as fuel; and assesses the viability of recovering fish
oil from fish processing wastes.
• AEA’s Combined Heat and Power program provides
assistance in developing projects that improve the overall
efficiency of power systems by recovering “waste heat”
from diesel-fueled and other generators.
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• The Energy Efficiency and Conservation program focuses on achieving Alaska’s goal of improving energy
efficiency by 15 percent through a wide portfolio of energy and cost savings measures for communities and
individuals. the portfolio includes technical assistance to communities and building owners/managers, broad
public outreach and education, stakeholder coordination, and financing for efficiency and conservation.
this program features projects such as the Village energy efficiency program, streetlight retrofit program,
Commercial Building energy audits, Industrial energy audits, statewide public outreach and alaska energy
efficiency partnership. additionally, akenergyefficiency.org and akenergyefficiencymap.org provide valuable
information on efficiency and conservation.
• AEA’s Geothermal program supports projects such as the Chena Hot Springs power plant; organizes
workshops and training sessions; and coordinates state assistance in developing other potential projects such
as Mt. spurr on the railbelt and Makushin in Unalaska.
• The Hydroelectric program provides technical assistance through staff and contractors for hydro feasibility
assessment. this program also manages public funding for project construction.
• AEA’s Ocean and River Energy program, in partnership with Alaska utilities and the Electric Power Research
Institute, evaluates technology and feasibility of converting wave motion, and tidal and river flow into power.
• AEA’s Wind program assists utilities and communities in resource evaluation, training, environmental
assessment, regional development, conceptual design and economic feasibility of rural wind-diesel systems.
the program also assists with railbelt wind integration studies.
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aea programs - regional
Regional Planning
aea has a lead role in regional energy planning for alaska. the authority initiates efforts in various regions to
help alaskans determine their energy priorities and formulate energy plans. In 2012, aea signed six contracts
with regional entities to develop energy plans in their respective regions. additionally, as the owner of two key
railbelt energy assets—the Bradley lake Hydro project and the alaska Intertie—aea has led, and continues to
lead, significant work for alaska’s railbelt grid.
Susitna-Watana
the hydroelectric potential of the susitna river has been studied since the 1950s. In 2008, the legislature
directed aea to reevaluate hydroelectric potential on the railbelt. In 2010, aea announced its recommendation
that the state should move forward with the susitna-Watana Hydroelectric project. In January 2011, Gov. parnell
introduced legislation that would accomplish this goal. In april 2011, after many hearings and substantial public
involvement, the legislature voted in favor of legislation that authorized aea to own and construct a hydropower
project on the susitna river.
aea entered the Federal energy regulatory Commission (FerC) licensing process in late 2011. Much of 2012 was
spent on the susitna-Watana Hydro environmental program. numerous stakeholder workgroups and technical
meetings were held to develop the proposed study plan, which was filed with FerC in 2012. the proposed
study plan includes 58 individual studies that focus on many resource areas, including: geology, water quality,
ice processes, geomorphology, instream flow, aquatic resources, wildlife, salmon and fish species, botanical
resources, recreation, aesthetics, cultural resources, socioeconomics, subsistence, transportation, project safety
and more. this is in addition to the historical data gathered from the 1980s’ susitna river project and the 18
studies conducted during 2012.
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aea programs - rural
Bulk Fuel Upgrades
Upgrading bulk fuel facilities reduces the cost of energy by replacing leaking tanks
and reducing the risk of future tank and equipment failure. Bringing these facilities
into compliance with federal and state regulations also makes them safer and more
reliable. aea completed two Bulk Fuel Upgrade projects in 2012. to date, 72 of 109
Bulk Fuel Upgrade projects have been completed. since 2000, and with substantial
contributions from the Denali Commission, aea has completed more than
$204 million in rural bulk fuel projects.
Rural Power System Upgrades
powerhouse upgrade projects replace outdated, inefficient systems with new
electronically controlled generator sets. new powerhouses contain generators
of several different sizes. this allows the operator to employ the most efficient
generator at various power demand levels throughout the day. at peak demand
times, the largest generator provides the power, while at low-demand times the
smallest generator provides the power. aea has also increased fuel efficiency by
adding electronic fuel injectors. aea’s capacity to provide technical assistance
is enhanced with the installation of remote monitoring systems. In 2012, aea
completed powerhouse, heat recovery, distribution and other upgrade projects
including switchgear and control upgrades in 11 communities. to date, 51 of 114
rural power system Upgrade projects have been completed. since 2000 and with
substantial contributions from the Denali Commission, aea has completed more
than $100 million in rural power system projects.
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Power Cost Equalization (PCE)
pCe payments reduce the cost of power to residential and
community customers of eligible utilities. the program
provides economic assistance to customers in rural areas,
where the kilowatt-hour charge for electricity can be
three to five times higher than in urban areas of the state.
With pCe, alaska’s rural areas are more able to maintain
communications and the operation of basic infrastructure
and systems. In FY 2012, aea disbursed $39.2 million in
pCe payments.
Emergency Response / Technical
Assistance
aea assists communities as power emergencies arise
and provides ongoing technical assistance to rural power
plant and bulk fuel facility operators. this helps assure
safe, reliable operation of rural alaska electric generation
equipment in which millions of dollars are invested, and
which provides power to a rural infrastructure of even
greater value.
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Training
aea trains local residents to
manage and operate rural energy
infrastructure. the intent of this
training is to ensure that community
personnel have the best skills
with which to sustain their energy
infrastructure in a business-like
manner. proper training and good
management are keys to success.
When aea’s commitment to provide
the best training is combined with
local residents’ commitment to
put it all into practice, the result is
an infrastructure that will last and
be useful its entire life span. Fifty-
four rural residents were trained
in FY 2012, including Bulk Fuel
operators, power plant operators,
advanced power plant operators and
Hydroelectric power plant operators.
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Management team
Sara Fisher-Goad
Executive Director
Sandra Moller
Deputy Director
Rural Energy Group
Sean Skaling
Deputy Director
Alternative Energy and
Energy Efficiency
Gene Therriault
Deputy Director
Energy Policy Development
Valorie Walker
Deputy Director
Finance and
Administration
Wayne Dyok
Lead Project Manager
Susitna-Watana
Hydroelectric Project
Emily Ford
Public Outreach Liaison
Board of Directors
Pictured from left to right
Robert Sheldon
Public Member
Gary Wilken
Public Member
Susan Bell
Vice Chair, Commissioner,
Alaska Department of
Commerce, Community,
and Economic
Development
Bryan Butcher
Commissioner, Alaska
Department of Revenue
Hugh Short
Chairman, Public Member
Wilson Hughes
Public Member
Ron Arvin
Public Member
Not
Pictured
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Unaudited Financial Highlights (in thousands)
As of
Balance Sheets June 30, 2012 June 30, 2011
Assets:
Investment securities and cash $ 975,335 $ 577,376
Loans, net 5,839 3,325
Capital assets, net 229,310 227,438
Receivables and other assets 18,253 408,680
Total Assets 1,228,737 1,216,819
Liabilities and net assets:
Liabilities
Bonds payable 94,487 101,171
Payables and other liabilities 63,622 39,739
Total liabilities 158,109 140,910
Net assets 1,070,628 1,075,909
Total liabilities and net assets $ 1,228,737 $ 1,216,819
Revenues, Expenses and For the years ended
Changes in Net Assets June 30, 2012 June 30, 2011
Operating revenues:
Federal grants $ 14,871 $ 11,758
Revenue from operating plants 16,357 17,613
State operating revenues 66,882 17,315
Interest on loans 302 484
Other operating revenues 248 98
Total operating revenues 98,660 47,268
Operating Expenses:
Grants and projects 97,047 62,072
Power cost equalization grants 38,899 31,180
Interest expense 5,032 5,540
Plant operating 4,501 5,674
General and administrative 5,267 3,933
Provision for loan losses 88 (14)
Depreciation 9,742 10,291
Total operating expenses 160,576 118,676
Operating loss (61,916) (71,408)
Investment Income, net 14,050 70,897
State of Alaska Fund Capitalization 42,501 437,200
Other non-operating losses 84 (3,828)
Increase (decrease) in net assets $ (5,281) $ 432,861
For AEA’s complete Audited Financial Statements for FY 2012, go to
akenergyauthority.org, or call 907.771.3000.
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akenergyauthority.org
AEA’s mission is to reduce the cost of energy in Alaska