HomeMy WebLinkAboutAlaska Energy Authority Annual Report 2020 Final 03-01-2021-AGovernor’s Letter 04
About AEA 05
Message from the Chair 06
Message from the Executive Director 07
Owned Assets 08
Power Cost Equalization 10
Rural Energy 11
Energy Technology Programs 14
Grants and Loans 17
Financial Highlights 20
Board of Directors 22
Executive Team 23
CONTENTS
2020 AEA ANNUAL REPORT 32020 AEA ANNUAL REPORT2
THE ALASKA ENERGY
AUTHORITY (AEA)
PROVIDES ENERGY
SOLUTIONS TO MEET THE
UNIQUE CHALLENGES OF
ALASKA’S RURAL AND
URBAN COMMUNITIES.
Annual Report Requirements:
The publication on the activities and financial condition of AEA is submitted in
accordance with Alaska Statute (AS) 44.83.940. AEA printed 500 copies of this
report in Anchorage, Alaska for $5.25 per copy. Design and production by AEA.
Printed by Service Business Printing.
Cover Photo:
Upside of the West Fork Battle Creek Diversion Project (looking downstream)
with the water flowing through the pipe.
AEA provides renewable
energy and energy efficiency
grants, analysis, and expertise.
These include hydro, biomass,
wind, solar, and others.
Energy Technology
Programs
AEA provides loans to qualified
utilities, local governments,
and independent power
producers for the construction
or upgrade of power
generation and other energy
facilities.
Grants and
Loans
In collaboration with local
and regional partners, AEA
provides critical economic
and engineering analysis
to plan the development
of cost-effective energy
infrastructure.
Energy
Planning
2020 AEA ANNUAL REPORT 52020 AEA ANNUAL REPORT4
MIKE DUNLEAVY
Governor
As a public corporation of the State of Alaska, the Alaska
Energy Authority (AEA) is an important part of Alaskans
managing energy costs. The mission of AEA is to reduce
the cost of energy for Alaskans, so it is involved with
developing energy policy and engaging with electric
utilities and all those interested in energy issues.
AEA is responsible for generation and transmission
assets on the Railbelt. This includes the Alaska Intertie
that serves Interior residents and the Bradley Lake
Hydroelectric Project, which provides affordable
energy to more than 500,000 Alaskans from Homer to
Fairbanks. AEA also oversees an important lifeline to
rural Alaska. The Power Cost Equalization (PCE) program
provides economic and personal benefits to more than
84,000 Alaskans in over 190 communities.
While 2020 brought many challenges, it also brought
newfound hope for a brighter future. Alaska’s great
potential remains within our reach. Increasing our
resilience and our security by modernizing our energy
infrastructure, enhancing our efficiency, and diversifying
our energy portfolio will help us meet our energy goals
while providing economic opportunities to the state.
I look forward to continuing this work with AEA’s
dedicated team in the year ahead to provide affordable
energy to all Alaskans.
Best regards,
Mike Dunleavy
Governor
GOVERNOR’S LETTER ABOUT AEA
Created in 1976 by the Alaska Legislature, AEA is a public corporation of the State of Alaska
governed by a board of directors with the mission to “reduce the cost of energy in Alaska.” AEA is
the state’s energy office and lead agency for statewide energy policy and program development.
AEA owns the Alaska
Intertie and the Bradley
Lake Hydroelectric Project.
These assets benefit Railbelt
consumers by reducing the
cost of power.
Owned
Assets
The Power Cost Equalization
Program reduces the unit cost
of electricity in rural Alaska
for residential customers
and community customers of
eligible utilities.
Power Cost
Equalization
AEA constructs bulk fuel tank
farms, diesel powerhouses,
and electrical distribution
grids in rural villages. AEA
supports the operation of
these facilities through circuit
rider and emergency response
programs.
Rural
Energy
2020 AEA ANNUAL REPORT 72020 AEA ANNUAL REPORT6
J. DANA PRUHS
Chair
Our world and our Alaska are markedly different
than they were one year ago. In a changing
environment, we are either left behind or we
change to make the most of new opportunities, and
that has been the path we have chosen at AEA.
Throughout 2020, AEA continued its 45-year record of
providing value to Alaskans through prudent management
of its owned assets and responsible stewardship of its
rural energy programs.
On the Railbelt, AEA owns the Bradley Lake Hydroelectric
Project, the largest hydro project in Alaska. Located
near Homer, the 120-megawatt facility provides some of
the cheapest power in the state to more than 500,000
Alaskans. AEA also owns the Alaska Intertie, a 170-mile-
long transmission line between Willow and Healy. In the
last decade, AEA, through its ownership and management
of the Intertie, has saved residents in Interior Alaska
approximately $40 million annually.
In rural Alaska, AEA helps to reduce the cost of energy
through the Power Cost Equalization (PCE) program.
Residents of participating rural communities received $28
million in PCE disbursements in Fiscal Year 2019. The PCE
program serves 84,000 Alaskans in 194 communities that
are largely reliant on diesel fuel for power generation.
Complementing PCE, AEA’s Rural Power System Upgrade
(RPSU) and Bulk Fuel Upgrade (BFU) Programs have
leveraged hundreds of millions of dollars in federal
funding to construct energy infrastructure in rural
communities.
While significant strides have been made to replace aging
bulk fuel tank farms and powerhouses, AEA estimates that
the current need for RPSU and BFU funding is over $1
billion.
I commend the leadership and staff for their unwavering
commitment to reducing the cost of energy for Alaskans.
On behalf of the Board, I look forward to AEA’s continued
momentum in 2021, as we continue on a path that will
deliver sustainable, long-term value to Alaskans. The
Board will continue to support the staff and leadership
team to ensure that Alaska remains a welcoming place to
do business and that its energy mission is met.
SAFE, AFFORDABLE, RELIABLE
ENERGY FOR ALL
INVESTING IN ALASKA’S FUTURE,
DELIVERING TODAY
CURTIS W. THAYER
Executive Director
In a challenging year, AEA’s activities and results
demonstrate the improved value in our homes and
where we work the ever more important place of
energy efficiency and renewable energy in Alaska’s
energy portfolio.
AEA strives daily to improve the reliability and resilience
of Alaska’s Railbelt Grid and to decrease costs for Alaska’s
ratepayers. By its recent purchase from Homer Electric
Association of a 39-mile 115-kilovolt transmission line
from the Sterling Substation to Quartz Creek, AEA
positions itself to bring significant benefits to Railbelt
customers including better cost alignment, increased
reliability, and the prospect of future upgrades to
unconstrain Bradley power.
AEA, in partnership with Chugach Electric Association, City
of Seward, Homer Electric Association, and Matanuska
Electric Association, also recently completed the West
Fork Upper Battle Creek Diversion Project. The project
diverts water from Battle Creek into Bradley Lake. This
$47 million project increases the amount of clean, low-
cost energy produced at Bradley Lake by about 10
percent, or 37,000 megawatt-hours of energy annually.
The project was the largest improvement to the Bradley
Lake facility since it began operation in September 1991.
Another area of focus is making our dollars go further
by partnering in projects that not only deliver energy
savings but also add value to our economy. AEA was
awarded a $21 million grant from the United States
Department of Transportation to participate in the
construction of a cargo storage facility at the Ted Stevens
Anchorage International Airport. The Alaska Cargo and
Cold Storage (ACCS) project is a public-private partnership
with McKinley Capital Management, LLC and partners.
The grant funds AEA’s participation in Phase 1 of a
715,000-square-foot $220 million state-of-the-art facility
boosting the airport’s value as an international shipping
hub between the U.S. and Asia. By partnering with AEA,
ACCS reduces development costs and benefits from AEA’s
expertise as it incorporates best-in-class energy efficiency
in its facility.
As AEA’s Executive Director, my personal goal is to
support projects that will provide energy and economic
benefits for the state. And as AEA celebrates its 45th year
serving Alaskans, we’ll continue to seek out opportunities
that deliver a steady reduction in the cost of energy for
both rural and urban communities.
2020 AEA ANNUAL REPORT 92020 AEA ANNUAL REPORT8
OWNED ASSETS
As the owner of significant Railbelt generation and
transmission assets, AEA ensures that sound public policy
and energy initiatives maximize benefits to the broadest
group of stakeholders.
ALASKA INTERTIE
The Alaska Intertie is a 170-mile long,
345 kilovolt (kV) transmission line
between Willow and Healy. The line
is owned by AEA and operates at
138 kV. The Intertie connects Golden
Valley Electric Association (GVEA),
the utility that serves areas north of
the Alaska Range, with Southcentral
Alaska utilities. It was constructed in
the mid-1980s with $124 million of
State appropriations and has no debt
service.
The Intertie provides significant cost
savings through the transmission of
economy energy to GVEA. It delivers
to GVEA its power share of Bradley
Lake and enables the sharing of
reserve generation capacity between
the Anchorage and Fairbanks load
centers. The operation of the Intertie
is governed by the Alaska Intertie
Agreement signed in 1985 and
amended thereafter. The parties to the
agreement are AEA, GVEA, Chugach
Electric Association, and Matanuska
Electric Association. Each of these
entities has a seat on the Intertie
Management Committee (IMC), which
has responsibility for managing the
Intertie.
Through AEA’s leadership as an IMC
member and with its step-in rights
on financial decisions regarding the
intertie, AEA is uniquely positioned
to ensure that ratepayers across the
electrically interconnected Railbelt
region benefit as intended under the
current Alaska Intertie Agreement.
BRADLEY LAKE
HYDROELECTRIC PROJECT
AEA owns the Bradley Lake
Hydroelectric Project, the largest hydro
project in Alaska. Located near Homer,
the 120-megawatt facility provides
some of the lowest-cost power in the
state to more than 500,000 Alaskans.
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; an interior
substation; and an external substation,
and 20 miles of transmission line.
The power generation potential of
Bradley Lake was first studied in 1955
by the U.S. Army Corps of Engineers.
AEA, then the Alaska Power Authority,
assumed responsibility for the project
in 1982.
In 2019, GVEA
ratepayers
achieved a
savings of
more than
$40 million
as a result
of power
transmission
over the
Intertie.
quiatiunto occabor
roraeperio blaut ut laccum,
The project began commercial operation on September
1, 1991, and has been producing power ever since. To
date, the total project costs including the West Fork Upper
Battle Creek (WFUBC) Diversion Project, is approximately
$400 million. The Bradley Lake project was funded
through legislative appropriations and AEA revenue bonds
that are being repaid by the participating utilities. The
Bradley Lake Project Management Committee generally
manages the project, subject to AEA’s non-delegable
rights, duties, and responsibilities.
In October 2020, AEA, along with our partners Chugach
Electric Association, City of Seward, Homer Electric
Association (HEA), and Matanuska Electric Association,
completed the WFUBC Project to divert water from Battle
Creek into Bradley Lake. This $47 million project increased
the amount of clean, low-cost energy produced at Bradley
Lake by about 10 percent, or 37,000 megawatt-hours of
energy annually. The project was the largest improvement
to the Bradley Lake project since it began operation.
In January 2021, the American Council of Engineering
Companies of Montana selected the West Fork Upper
Battle Creek Diversion (WFUBCD) Project for the 2021
Montana Grand Project Award. The award recognizes
projects that have applied unique or innovative
technologies, enhanced awareness for the engineering
profession, utilized social, economic, and sustainable
design, and successfully fulfilled the client/owner’s needs,
including schedule and budget.
AEA is also improving the reliability and resilience of
Alaska’s Railbelt Grid and decreasing costs for ratepayers
by its purchase from HEA of a 39-mile 115-kilovolt
transmission line for $17 million that runs between the
Sterling Substation and Quartz Creek (SSQ Line). The SSQ
Line is a critical component of the Railbelt transmission
system. This historic transaction brings significant benefits
to Railbelt customers including better cost alignment,
increased reliability, and the prospect of future upgrades
to unconstrain Bradley power.
Contractors at the West Fork Upper Battle Creek Diversion project site fuse two sections of high-density polyethylene pipe using the world’s largest
fusion welding machine, which was brought in from the Lower-48.
During a flyover, Governor Mike Dunleavy views a Kenai tranmission line
damaged by the Swan Lake Fire in August 2019.
2020 AEA ANNUAL REPORT 112020 AEA ANNUAL REPORT10
The Power Cost Equalization
Program (PCE) was enacted to
somewhat equalize the cost of
electrical power between urban
and rural Alaska.
POWER COST
EQUALIZATION
The PCE program makes payments to eligible rural
electric utility companies and those companies credit
their residential and community facility customers
with payments made from the program up to a level
of consumption. Those payments result in a reduction
of the unit cost of power to residential and community
customers. The pre-PCE cost of electricity in rural
communities is almost always significantly more than the
electricity costs borne by customers in Alaska’s urban
areas. Residential and community facility buildings and
assets in nearly 200 communities see the benefits of PCE
credits.
AEA calculates the amount an eligible electric utility is due
based on a filing made by the utility and issues monthly
payments. The PCE program staff also provides technical
assistance to utility clerks who need help preparing and
filing PCE reports. The PCE disbursements are funded
from the PCE Endowment Fund. AS 42.45.085 provides
that five percent of the PCE Endowment Fund’s three-year
monthly average market value may be appropriated to the
PCE program. Only in recent years has the five-percent
draw on the endowment been sufficient to fully fund
PCE disbursements. In Fiscal Year 2018, due to statutory
changes made addressing how excess PCE Endowment
Fund earnings are used has the PCE Endowment fully
funded the program’s administrative costs and been
sufficient to contribute $30 million to local governments
through the state’s community assistance program and
been able to provide an additional benefit of funding for
the Renewable Energy Fund and for some Rural Power
System Upgrade projects.
AEA is now using a web portal to accept monthly
filings from utility companies. The electronically filed
monthly reports reduce time in processing reports and
results in sooner payments. As the web portal gains
broader acceptance and after all utility companies are
trained in its use there will likely also be a reduction in
administrative costs and better security for electronic
fund disbursements.
RURAL POWER SYSTEM UPGRADE
AEA’s Rural Power Systems Upgrade (RPSU) program
builds and retrofits facilities in communities of less than
2,000 people, providing stable and reliable power. The
typical efficiency improvement in diesel generation is
between 10 and 20 percent. Upgrades may include
efficiency improvements, powerhouse upgrades
or replacements, line assessments, demand-side
enhancements, heat recovery, and repairs to generation
and distribution systems. The Denali Commission is AEA’s
major federal funding partner, which requires a state
match of 50 percent for non-distressed communities or
20 percent for distressed communities.
The RPSU program also manages the State’s allocation
through the Environmental Protection Agency’s (EPA’s)
Diesel Emissions Reduction Act (DERA). Pending yearly
funding from Congress, states can apply for DERA
funds based on population. In addition to the state
program, EPA also a tribal DERA program that awards
funds competitively nationwide. AEA uses DERA funds
exclusively to replace prime power diesel engines in rural
Alaska. AEA selects communities for engine replacement
through the DERA program based on current engine
condition, redundancy, efficiency, and engine eligibility.
In Calendar Year 2020, AEA completed two RPSU
powerhouse replacement projects, in Akhiok and Twin
Hills. Additional RPSU design and construction work,
including engine replacement with DERA funds, was
completed in Chignik Lake (two engines), Circle (two
engines), Takotna (two engines), and Tuluksak (one
engine).
AEA has switched emphasis from full facility replacement
to improving operations and maintenance to maximize
the benefit to rural power systems. There are currently
21 active Maintenance and Improvement (M&I) projects,
which target high return investment in eligible community
power systems. Typical projects include replacing
old switchgear and control systems, maximizing heat
recovery, and updating engine controls to improve
efficiency.
The deferred maintenance for RPSU is estimated at
approximately $327 million.
RURAL ENERGY
AEA is an essential partner with all of rural Alaska. Its policies emphasize community-
based project management. Through innovation and collaboration, AEA provides
the tools and the guidance necessary for all rural communities to embrace a better
energy future.
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BULK FUEL UPGRADE
Rural Alaska depends on liquid fuels for most of its energy
needs: diesel for power generation, and heating and
gasoline for transportation. Most rural villages are located
along rivers or on the coast, so fuel is delivered primarily
by barge. Delivery is often limited by season or weather.
Most communities receive barge fuel deliveries once or
twice a year.
Many of rural Alaska’s bulk fuel facilities were built in the
mid-1900s and do not comply with modern regulations.
Yet they typically continue in service until upgraded
or replaced, posing risks to personal safety and the
environment.
AEA’s Bulk Fuel Upgrade (BFU) program repairs or
upgrades fuel storage facilities in communities with
fewer than 2,000 residents. These facilities help decrease
the per-unit cost of fuel by allowing the community
to purchase fuel in bulk quantities. To date, AEA has
performed 133 bulk fuel upgrades, and nine more are in
design or construction.
In recent years, AEA has switched its emphasis from
bulk fuel facility replacement to Maintenance and
Improvement (M&I) projects. There are 16 M&I projects
planned currently which target high-return investment in
eligible community power systems. In Calendar Year 2020,
AEA completed one full-facility BFU project in Shaktoolik.
The deferred maintenance cost for BFU is estimated at
approximately $800 Million.
CIRCUIT RIDER AND TECHNICAL ASSISTANCE
AEA’s Circuit Rider’s assisted 454 eligible utilities in
Calendar Year 2020, providing remote monitoring,
training, technical consultation. On-site assistance, and
minor repairs to power systems we performed in 45
communities. The Circuit Rider and Technical Assistance
programs provide essential assistance to reduce the
number of emergency responses that are needed when
there are power outages in rural communities.
ELECTRICAL EMERGENCY ASSISTANCE
AEA provides power-related electrical emergency
assistance to rural communities. Electrical emergency
assistance encompasses risk to life or property due to
power failure. Thankfully this assistance is rarely needed.
In Calendar Year 2020, no emergency responses were
required. This is due largely to the attentive focus of
circuit rider and training programs.
RURAL TRAINING PROGRAM
AEA’s Rural Training Program provides operators with the
skills necessary to operate their energy infrastructure and
keep their facilities code compliant and operational. In
Calendar Year 2020, 45 operators from 21 communities
were trained in Bulk Fuel and Power Plant Operations,
Advanced Power Plant Operations, and by training
courses at the Alaska Vocational Technical Center.
Twenty-one communities received onsite training in
bulk fuel operations. AEA is pioneering the use of 3D
imaging coupled with data from each rural powerhouse
to create new ways for operators to learn about their site-
specific needs. AEA has also developed an online training
curriculum around the same technology to decrease the
cost of travel and to expand the training audience.
AEA’s BFU program replaces and repairs or
upgrades fuel storage facilities in communities
with fewer than 2,000 residents. These facilities
help decrease the per-unit cost of fuel by allowing
the community to purchase fuel in bulk quantities.
MANY OF RURAL
ALASKA’S BULK FUEL
FACILITIES WERE BUILT
IN THE 1950-60S AND
ARE AT THE END OF
THEIR USEFUL LIVES.
2020 AEA ANNUAL REPORT14 2020 AEA ANNUAL REPORT 15
ENERGY TECHNOLOGY PROGRAMS
Alternative energy and energy efficiency programs increase statewide knowledge around
the installation and operation of cost-effective energy efficiency projects and renewable
energy systems by providing technical workshops, hands-on and online training, technical
assistance, and funding.
BIOMASS
Biomass heat reduces diesel fuel use and keeps the money for fuel (wood) within
the community. AEA’s biomass program has funded over 20 operating woody
biomass heating systems for schools and public buildings. Along with the United
States Forest Service, the program has funded over 170 preliminary studies to
evaluate a community’s biomass potential and develop sustainable harvest plans.
Biomass is reducing diesel fuel consumption and creating local jobs.
ELECTRIC VEHICLES
Alaska intends to allocate 15 percent of the Volkswagen (VW) Trust funds (~$1.2
million) to develop an electric vehicle (EV) fast-charging corridor and install
community-based Level 2 charging stations over the next few years. In 2020,
AEA facilitated the development of the Alaska Electric Vehicle Working Group
(AKEVWG), composed of representatives of utilities, state and local government,
ACEP, EV owners, and stakeholder industries. The AKEVWG meets quarterly and
holds technical meetings on impediments to EV market adoption, utility demand
fees, and siting criteria. AEA has funded the Department of Transportation and
Public Facilities to install Level 2 chargers at several State-owned facilities. AEA
continues to pursue funding opportunities to leverage the State’s VW Trust funds.
ALASKA CARGO AND COLD STORAGE
AEA was awarded a $21 million grant from the U.S. Department of Transportation
to participate in the construction of a cargo storage facility at the Ted Stevens Anchorage
International Airport. The project, known as the Alaska Cargo and Cold Storage, is a public-
private partnership with McKinley Capital Management, LLC and partners. The grant
funds AEA’s participation in Phase 1 of an approximately 715,000-square-foot
$220 million state-of-the-art facility boosting the airport’s value as an international
shipping hub between the U.S. and Asia. By partnering with AEA for federal
funding, ACCS reduces development costs and benefits from AEA’s expertise
as it incorporates best-in-class energy efficiency in its facility.
ENERGY EFFICIENCY
Efficient production and consumption save costs, reduces demand, and are often
the lowest hanging fruit for energy solutions. It is available in every community in
Alaska.
Last year, AEA’s Energy Efficiency program leveraged federal State Energy
Program funds and a grant from Wells Fargo to meet our mission. Through a
public partnership, AEA’s Village Energy Efficiency Program (VEEP) received a $1
million grant from Wells Fargo to provide 47 communities with outdoor lighting
retrofits. The local match was $397,000, for a total investment of nearly $1.1
million. The project also leveraged Denali Commission funds. With $428,483
of Denali Commission funds and a local match of $110,917, AEA enabled 17
additional communities the same opportunity. The project’s to date expenditures
total $2,156,851. Despite the COVID-19 pandemic, communities have actively
implemented their projects. Fifteen sites are complete, 725 lights have been
replaced, and 308,024 kilowatt-hours (kWh) per year will be saved. Cost per kWh
in these communities ranges between $0.19 – $0.86.
Efficiency program staff increased access to financing markets and developed
mechanisms to attain private dollars with the Alaska C-PACE Program. AEA was
awarded $300,000 from the Department of Energy to stand up a Commercial
Property Assessed Clean Energy (C-PACE) program. AEA is matching 20 percent
— total project $360,000. AEA contracted with various entities for technical
assistance and a market study on commercial properties across the state. By
2022, AEA hopes to have Alaska C-PACE enabled in three municipalities in Alaska.
In November 2020 the Municipality of Anchorage was the first community in the
state to adopt its enabling ordinance.
EV Fast-Charging Corridor
2020 AEA ANNUAL REPORT 172020 AEA ANNUAL REPORT16
HYDROELECTRIC
As Alaska’s largest source of renewable energy, hydropower supplies more than 20 percent of the state’s electrical
energy in an average water year. AEA’s hydroelectric program assists approximately 51 utility-scale hydroelectric projects
throughout the state. The majority of Alaska’s existing hydro projects are located in the Southeast and Southcentral
regions of Alaska. Projects range from concepts to operational hydroelectric facilities. The hydroelectric program focuses
on improving efficiency and quality in development, lowering the cost of construction, and coordinating with State,
federal, municipalities, tribal entities, and private investors in analyzing, planning, and generally assisting hydroelectric
project development.
GRANTS AND LOANS
RENEWABLE ENERGY FUND
The Renewable Energy Fund (REF) exists to help Alaskans
reduce and stabilize their cost of energy through the
development of renewable energy projects. The program
is designed to produce cost-effective renewable energy
for heat and power to benefit Alaskans statewide.
To date, REF has made 287 grants to develop or construct
renewable energy projects statewide. There are now over
90 operating projects built with contributions from REF,
collectively saving more than 30 million gallons of diesel
each year. Annual renewable energy generation increases
each year as more REF-funded projects progress through
the construction phase and become operational. From
2008 through 2019, $268 million were made available
to REF projects. State funding has been matched with
hundreds of millions of dollars from other sources to
develop renewable energy projects designed to reduce
and stabilize the cost of energy in Alaska.
In Fiscal Year 2020 AEA solicited applications for
Renewable Energy Fund Grants and has forwarded to
the legislature 11 eligible renewable energy projects with
recommendations that the legislature fund each one.
The projects were evaluated by AEA staff and external
consultants and have been carefully considered by
the Renewable Energy Fund Advisory Committee. The
legislature will consider AEA’s recommendations for
funding in future fiscal years.
The authorization of the REF grant program expires on
June 30, 2023.
Another contribution AEA makes to those in the energy space is its administration of
funding programs. AEA monitors external funding sources including Tribal and Indian
Energy loan programs, U.S. Department of Energy (USDOE) funding opportunities, and
other funding opportunity announcements. AEA has a strong relationship with the USDOE
Alaska Energy Office and anticipates awareness of new funding streams and technical
assistance that become available because of that relationship and because of connections
with National Laboratories.
WIND
Alaska’s coastline, mountain tops, and passes have long been studied
as locations where wind can be harvested for energy capture. Today
Wind energy accounts for 2.4 percent of the state’s total energy
production and that percentage is growing. Since 2012, Alaska’s wind
energy capacity has increased 400 percent. This growth is supported
by AEA’s Renewable Energy Fund and the sharing of information with
wind energy producers and stakeholders. AEA’s Alaska Wind Working
Group and its Wind Advisory Panel meet regularly over policy issues
to advance wind energy. Funding for wind projects is a frequent topic
at these meetings. In partnership with the Wind Working Group, AEA
facilitates annual educational events including the wind-diesel and
energy storage workshops. AEA’s assistance to communities evaluating
wind energy has often aided rural community decision-making.
AEA constantly seeks out
opportunities that benefit
Alaskans — and Baxter Senior
Living is a great example of this.
AEA Executive Director Curtis W. Thayer
Baxter Senior Living, a senior living community in Anchorage, holds a ribbon cutting ceremony to commission the Yanmar Combined Heat and Power
(CHP) system, the largest installation of its kind in Alaska. The CHP system will produce the senior community’s electricity from natural gas it is burning
for heat. AEA provided the financing to make the project viable through its PPF loan program.
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POWER PROJECT FUND
AEA administers loan requests from applicants seeking low-interest loans that qualify for its Power Project Fund (PPF)
loan program. This loan funding program provides local utilities, local governments, or independent power producers
with an opportunity to seek funding for the development, expansion, or upgrade of electric power facilities, including
distribution, transmission, efficiency and conservation, bulk fuel storage, and waste energy. The PPF loan term is related
to the project’s useful life, but cannot exceed 50 years. The interest rate calculation for a PPF loan is formula-driven and
related to the 30-year taxable municipal bond yield. Loan requests of more than $5 million require legislative authorization.
VOLKSWAGEN SETTLEMENT FUNDS
On January 29, 2018, Alaska became the beneficiary of
an $8.125 million “Volkswagen (VW) Settlement.” AEA
is the State’s lead agency to develop and implement a
Beneficiary Mitigation Plan to distribute the funds to
eligible mitigation actions that result in a total lifetime
reduction of nitrogen oxides (NOx) emissions by 10.5
short tons. Several projects have been selected thus far
to reduce NOx emissions by more than 2.5 times Alaska’s
mitigation goal. A summary of the disbursement of funds
underway includes:
Replacement of Diesel Engines used for Prime
Power (~$813,000 + match funds)
AEA has set aside Trust funds as a voluntary match for
AEA’s Diesel Emission Reduction Act (DERA) program to
fully leverage the federal funds allocated to the State by
the EPA. By contributing the voluntary match, the State
can receive 50 percent more EPA DERA funds to replace
diesel engines or gensets in rural powerhouses. Engine/
genset replacement projects were completed in summer
and fall 2020 in Chignik Lake (2), Circle (2), Takotna (2), and
Tuluksak (1). Replacements are expected to occur in Arctic
Village (3) and Chenega Bay (2) during 2021.
All-electric Garbage and Box Trucks (~$25,000)
AEA has committed $25,000 to the Municipality of
Anchorage towards the purchase of an energy-storage-
based fast charger for their new all-electric garbage truck
and electric box truck.
Public Transit Bus Replacement (~$234,000)
AEA’s funded 20 percent of an all-electric bus purchased
by the City and Borough of Juneau, Capital Transit.
The bus was ordered in 2020 and is expected to be
operational in spring 2021.
School Bus Replacement (~$4.3 million)
The following school districts were awarded new school
buses and have put them into service or will when
in-person school resumes: Alaska Gateway (Tok) (1),
Anchorage (13), Juneau (1), Kake City (2), Kenai Peninsula
Borough (7), Kodiak Island (1), Matanuska-Susitna Borough
(4), and Southeast Island (Prince of Wales Island) (4).
The school bus in Tok is the first all-electric school bus in
the State of Alaska and only the third electric school bus
manufacturer Thomas has ever made.
2020 AEA ANNUAL REPORT 212020 AEA ANNUAL REPORT20
BALANCE SHEETS June 30, 2020 June 30, 2019
Assets and deferred outflows of resources:
Restricted Investments securities and cash 1,180,885 1,204,632
Loans, net 27,032 24,742
Capital assets, net 388,046 375,972
Receivables and other assets 3,919 4,244
Total Assets 1,599,882 1,609,590
Liabilities and net position:
Liabilities
Bonds payable 63,684 74,709
Other bond liabilities 1,052 1,269
Payables and other liabilities 1,096,980 1,090,582
Total liabilities 1,161,716 1,166,560
Net Position 438,166 443,030
Total liabilities and net position 1,599,882 1,609,590
FY2020 FINANCIAL HIGHLIGHTS*
REVENUES, EXPENSES, AND CHANGES IN NET POSITION June 30, 2020 June 30, 2019
Operating revenue:
Federal grants 7,845 3,552
Revenue from operating plants 21,361 21,035
State operating and capital revenues 4,719 20,444
Interest on loans 362 347
Other operating revenues 1,684 792
Total operating revenues 35,971 46,170
REVENUES, EXPENSES, AND CHANGES IN NET POSITION June 30, 2020 June 30, 2019
Operating Expenses:
Grants and projects 18,714 20,213
Power cost equalization grants 29,255 28,369
Interest expense 827 1,746
Plant operating 5,376 5,350
General and administrative 5,742 5,672
Provision for loan loss 61 169
Loss on disposal of asset ––
Depreciation 10,917 10,862
State of Alaska appropriations and transfers 21,288 1,097,628
Other project expenses ––
Total operating expense 92,180 1,170,009
Operating loss (56,209)(1,123,839)
Investment Income, net 51,411 78,008
State of Alaska reappropriations and transfers (66)(67)
Capital contributions –1
Increase (decrease) in net position (4,864) 1,045,897
*Unaudited — Derived from Audited Financial Statements.
**In FY19, the State of Alaska’s Department of Law opined that the PCE Endowment Fund was subject to the
State’s general fund unobligated fund balance sweep of certain money into the State’s Constitutional Budget
Reserve. On June 30, 2019, $1.05 billion was swept, with the reversal of the sweep, pursuant to legislation,
happened on July 1, 2019. The same sweep process occurred on June 30, 2020, which netted the reversal
from FY19 with the FY20 sweep amount of $1.06 billion. FY20 is the first year that the reversal and new sweep
occurred creating an increase to the overall net position. We anticipate the PCE Endowment Fund will be
subjected to the sweep each fiscal year.
* *
Curtis W. Thayer
Executive Director
Tim Sandstrom, PMP
Director, Rural Programs
T.W. Patch, JD
Director of Planning
Kirk Warren, P.E., PMP
Director, Engineering and
Energy Development
Salina Bearden
Controller
Amy Adler
Acting Chief Financial Officer
Linda Senn, Ph.D.
Human Resources Director
Brandy M. Dixon
Communications Director
BOARD OF DIRECTORS EXECUTIVE TEAM
2020 AEA ANNUAL REPORT 232020 AEA ANNUAL REPORT22
Dana Pruhs
Chair, Public Member
Albert Fogle
Public Member
Bernie Karl
Vice Chair, Public Member
Bill Kendig
Public Member
Julie Anderson
Commissioner, Department of
Commerce, Community and
Economic Development
Anna MacKinnon
Special Assistant to the
Commissioner Alaska
Department of Revenue
Julie Sande
Public Member