HomeMy WebLinkAbout2023-01-18 AEA Agenda and docs
813 West Northern Lights Boulevard, Anchorage, Alaska 99503 T 907.771.3000 Toll Free 888.300.8534 F 907.771.3044
REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG
Alaska Energy Authority Board Meeting
Wednesday, January 18, 2023 8:30 AM
AGENDA
Dial 1 (888) 585-9008 and enter code 212-753-619# Public comment guidelines are below.
1. CALL TO ORDER
2. ROLL CALL BOARD MEMBERS
3. AGENDA APPROVAL
4. PRIOR MINUTES – December 19, 2022
5. PUBLIC COMMENTS (2 minutes per person) see call in number above
6. NEW BUSINESS
A. Power Cost Equalization Endowment Presentation – Department of Revenue
B. Resolution No. 2023-01 FY24 Operating and Capital Budget Submissions Ratification
i. EXECUTIVE SESSION – To discuss confidential matters related to the FY24
Budget
7. OLD BUSINESS
8. DIRECTOR COMMENTS
A. Strategic Planning discussion
B. Power Revenue Bonds – closed 11/30/2022 (updated Term Sheet Letter)
C. 2022 Final Audit and Federal Single Audit
D. Hydro Update
E. Grid Resilience and Innovation Partnerships (GRIP) Concept Papers 1 (Railbelt Backbone Reconstruction), 2 (Battery Energy Storage/HVDC0), 3 (Railbelt), & 3(Rural)
F. Required Project Work Update
G. State Energy Security Plan Update
H. Rural Update
I. Power Cost Equalization Update
J. Power Project Loan and Dashboard
K. Denali Commission Update
L. Community Outreach
M. Articles of Interest
N. Next Regularly Scheduled AEA Board Meeting Wednesday, March 1, 2023
9. EXECUTIVE SESSION - Discuss confidential personnel matters.
10. BOARD COMMENTS
11. ADJOURNMENT
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Public Comment Guidelines Members of the public who wish to provide written comments, please email your comments to
publiccomment@akenergyauthority.org by no later than 4 p.m. on the day before the meeting, so they can be shared with board members prior to the meeting. On the meeting day, callers will enter the teleconference muted. After board roll call and agenda
approval, we will ask callers to press *9 on their phones if they wish to make a public comment. This will initiate the hand-raising function. We will unmute callers individually in the order the calls were received. When an individual is unmuted, you will hear, “It is now your turn to speak.” Please identify yourself and make your public comments.
813 W Northern Lights Blvd, Anchorage, AK 99503 Phone: (907) 771-3000 Fax: (907) 771-3044 Email: info@akenergyauthority.org
REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG
Alaska Energy Authority BOARD MEETING MINUTES
Monday, December 19, 2022
Anchorage, Alaska
1. CALL TO ORDER Chair Pruhs called the meeting of the Alaska Energy Authority to order on December 19, 2022, at 8:30 am. A quorum was established. 2. ROLL CALL BOARD MEMBERS Members present: Chair Dana Pruhs (Public Member); Vice-Chair Bill Kendig (Public Member); Albert Fogle (Public Member); Adam Crum (Commissioner DOR); Julie Sande (Commissioner DCCED); Bill Vivlamore (Public Member); and Randy Eledge (Public Member).
3. AGENDA APPROVAL MOTION: A motion was made by Vice-Chair Kendig to approve the agenda, as presented. Motion seconded by Mr. Fogle.
The motion to approve the agenda passed without objection.
4. PRIOR MINUTES – October 26, 2022
MOTION: A motion was made by Vice-Chair Kendig to approve the prior minutes of
October 26, 2022, as presented. Motion seconded by Mr. Fogle.
The motion to approve the minutes of the October 26, 2022, passed without objection.
5. PUBLIC COMMENTS (2 minutes per person)
There were no members of the public online or in-person who requested to comment.
6. NEW BUSINESS A. 2022 AEA Audit Review Curtis Thayer, Executive Director and Secretary-Treasurer, commented that there were no findings within the audit. He informed that the audit was late. There were issues with the recruiting and the hiring of candidates. Mr. Thayer introduced Pam Ellis, Comptroller, and noted that today is her first day of employment. Mr. Thayer highlighted that the audit shows that the Power Cost Equalization (PCE) lost $112 million last year, which has affected the financials. He informed that
Alaska Energy Authority Page 2 of 5
after 30 years, the Bradley Lake Project was fully paid on July 1, 2021.
Mr. Thayer advised that AEA repaid $10 million of the $17 million that was borrowed from AIDEA
in December of 2020 for the SSQ Line. He discussed that an increase in federal dollars is
anticipated over the next five years in the amounts of $52 million for electric vehicles (EV), $60
million for grid resilience, $74 million for energy efficiency with Alaska Housing, and $13 million
with Golden Valley Electric Association (GVEA) for power lines to Black Rapids Training Site (BRTS).
Mr. Thayer announced that the $166 million bonding for transmission and battery upgrades officially closed on November 30, 2022. He explained that thanks to previous Board member Deven Mitchell’s suggestions, the additional negotiation was successful. The rate was lowered 25 basis points and a refinance option is available after 10 years. Mr. Thayer noted the option will be described in more detail at the January meeting.
Mr. Thayer added that AEA’s Linda MacMillan and Amy Adler also worked diligently on the audit process to complete it in December rather than in January. He explained that the audit procedure is different from previous years, and as of next year, the basic financials will be easier to gather and easier to present. Mr. Thayer commented that Eide Bailey is supportive of the new format going forward. He expressed appreciation to Dona Keppers, CFO, and to the listed individuals on the Audit Team from both AEA and AIDEA for their efforts in completing the audit.
Chair Pruhs inquired if the $122 million PCE loss is based on the 12-month period or if it is based on the date the investment is sold. Mr. Thayer explained that the loss is smoothed over a five-year look-back period. Chair Pruhs asked if the PCE loss was realized or unrealized. Ms. Keppers
informed that the losses are unrealized. Mr. Thayer commented that the Department of Revenue,
by statute, manages the PCE fund and will provide an investment presentation at the January
Board meeting to explain the legislative investment parameters.
Commissioner Crum advised that he received an update and presentation on Friday by the Chief
Investment Officer of the State, Zach Hanna that will be shared with the Board and with the public
regarding the mechanics of the investment theory. The objective is to develop a normal process
in which to present information regarding each of the separate fiduciary funds and how the
investment process is in line with other State Boards, including the Alaska Retirement
Management Board.
Chair Pruhs expressed appreciation on behalf of the Board to Ms. MacMillan and Ms. Adler for
their assistance. He welcomed Ms. Ellis to her new position. Chair Pruhs requested that Ms.
Keppers continue the presentation. Ms. Keppers thanked Mr. Thayer for providing the highlights of the last year. She began the review of the Financial Statements for the year ending June 30, 2022. The second page of the report lists the index of the statements and schedules of both government and enterprise funds. Ms. Keppers commented that the format next year will provide the review in a consolidated fashion with a clearer presentation of the comparables. She expressed appreciation to Eide Bailey for working with staff to simplify the report.
Ms. Keppers requested Lealan Miller, Eide Bailey, to give the overview and the opinion of the
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report. Mr. Miller echoed the comments of appreciation for the efforts to complete the audit before January. He gave a high-level review of the audit report. The format of the report changed,
and the auditor’s opinion is now contained within the first two paragraphs of the report. The
financial statements of AEA have received a clean unmodified opinion. The remainder of the
report provides the basis for the clean opinion, lists the responsibilities of management of the
financial statements, and lists the responsibilities of the auditor.
Mr. Miller brought the Board’s attention to the Management’s Discussion and Analysis section on page five. He believes this is the most important section of the document, as it gives management the opportunity to describe the changes that occurred during the year, provide explanations for those changes, and give forward-looking information. Mr. Miller noted that the Statement of Net Position on pages 18 and 19 is also the balance sheet. The biggest changes from last year to this year were the pay-down of the debt, the change within the restricted cash and investments, and the effect of the unrealized investment losses. Mr. Miller indicated that the unrealized investment losses are not unusual during this time, as Eide Bailey has seen similar losses with other Alaska State agencies, as well as state agencies around the country.
Mr. Miller reviewed the Statement of Activities on page 20, identifying the governmental activities and business-type activities. The majority of the $187 million loss in the net position of governmental activities is due to the investment loss. The majority of the $8.8 million loss in the net position of business-type activities is due to the amount of utility revenue recognized this year versus last year because the debt was paid down. Mr. Miller discussed the Statement of Cash
Flows on page 26. The overall increase for the year of restricted cash and cash equivalents was
$1.5 million.
Mr. Miller explained that the footnotes beginning on page 28 provide additional explanation
regarding the financial information, including more detail pertaining to the debt and loan
programs. He advised that there were no new significant accounting standards issued this year,
and therefore, no new notes were released as part of this year’s audit. Mr. Miller indicated that
final audit will include suggested grammatical changes to the language and to the format of the
audit, but there will be no changes to the numbers.
Chair Pruhs asked Mr. Thayer for the typical expectation of when an audit should be completed.
Mr. Thayer indicated that next year’s audit will be completed in October. He explained that the
books are closed about two months after the end of the fiscal year of June 30th, and then the audit is completed. Mr. Thayer commented that the PCE accounting and accrual may delay the process
because they have up to 90 days to report.
Mr. Fogle expressed appreciation to Mr. Thayer, Ms. Keppers, and the team for their efforts. He commented that this year’s request for proposal (RFP) for auditor included the stipulation that the audit was to be completed by the end of September so that the Board could review and approve it at the October Board meeting. Mr. Fogle asked if that same stipulation will be included in next year’s RFP for auditor. Mr. Thayer agreed. He explained that the delay in this year’s audit was AEA’s delay.
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MOTION: A motion was made by Mr. Fogle to accept the 2022 Alaska Energy Authority Audited Financial Report, as presented today at this Board meeting. Motion seconded by
Vice-Chair Kendig.
A roll call was taken, and the motion to accept the 2022 Alaska Energy Authority Audited
Financial Report passed unanimously.
Chair Pruhs echoed the comments of appreciation to Mr. Thayer and all staff involved in
successfully completing the challenging audit.
Chair Pruhs requested that Megan Schmidt, AEA, remain in the room during Executive Session.
MOTION: A motion was made by Vice-Chair Kendig to enter into Executive Session to discuss confidential personnel issues. This is supported by the Open Meetings Act, which allows a Board to consider confidential matters in Executive Session. In this case, the Board believes that these are subjects which would have an adverse effect upon the finances of AEA or are protected by law due to rules protecting personal privacy and certain business information. Motion seconded by Mr. Fogle. A roll call was taken, and the motion to enter into Executive Session was approved unanimously. 7. EXECUTIVE SESSION: 8:58 a.m. – Discuss confidential personnel matters
The Board reconvened its regular meeting at 9:55 am. Chair Pruhs advised that the Board did not
take any formal action on the matters discussed while in Executive Session.
8. DIRECTORS COMMENTS
A. Next Regularly Scheduled AEA Board Meeting Wednesday, January 18, 2023
9. BOARD COMMENTS
Commissioner Sande extended appreciation to staff for their diligent work in preparing the audit.
She welcomed Commissioner Crum and thanked him for his meaningful participation on the
Board. Commissioner Sande welcomed John Springsteen as the new liaison between the agencies
and the Governor’s Administration. She thanked staff again for their work, and extended holiday
wishes to all.
Commissioner Crum expressed that he is glad to participate in the process of the good work of AEA. He thanked staff for their efforts and for providing a thorough orientation. He looks forward to continued involvement. Chair Pruhs extended appreciation to all for their time during this holiday season. He wished everyone a Merry Christmas. He reiterated thanks to Mr. Thayer and staff for the herculean effort
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regarding the audit. He thanked Ms. Schmidt for her efforts. Chair Pruhs suggested to Mr. Thayer that strategic planning opportunities are discussed during the January Board meeting. Mr. Thayer
agreed. Chair Pruhs suggested that work begin on preparing AEA’s public comment regarding
the Governor’s budget and how it positively affects AEA.
Commissioner Sande requested the Board’s indulgence as she and Commissioner Crum look to navigate their existing Board schedules and other commitments in relation to the published AEA Board calendar for the upcoming year. Chair Pruhs requested that Commissioner Sande and Commissioner Crum disseminate any calendar conflicts to Ms. Bertolini. Vice-Chair Kendig commented for planning purposes, that he usually schedules his travel during the last week of the month. There were no additional comments. 10. ADJOURNMENT There being no further business of the Board, the AEA meeting adjourned at 10:02 am.
______________________________________________________ Curtis W. Thayer, Executive Director / Secretary
Power Cost Equalization Fund:
Investment Policy and Performance
January 2023
Zachary Hanna, CFA, Chief Investment Officer
State of Alaska, Department of Revenue
2
Department of Revenue –Treasury Division
▪The Treasury Division is run by 40 professionals in
portfolio management, accounting, operations,
compliance, and cash management.
▪The Division is a resource to help state fiduciaries achieve
investment objectives and understand risks.
▪$47+ billion in assets managed as of 11/3/22:
-Alaska Retirement Management Board -$39 Billion
-SOA/Commissioner of Revenue -$8 Billion
-Other SOA fiduciaries -$300 million
▪Treasury implements investment policy and produces
results.
Portfolio Management
• Investment “Prudent Expert”
• Assists fiduciaries with asset
allocation and investment policy
• Implements investment policies and
produces results
Accounting and Operations
• Asset accounting
• Information technology
• Operations support
Compliance/Middle Office
• Performance reporting and
operational efficiency
• Ensures investments meet policies
• Industry compliance and regulations
Cash Management
• Oversees cash receipts &
expenditures
• Sets daily cash availability
• Coordinates with portfolio to
maximize invested cash
Treasury
Division
3
Investment Policy and
Asset Allocation Process
4
State Investment Policy and Asset Allocation Process
▪The Commissioner of Revenue is the fiduciary for
over $8 billion in state assets across 100+ accounts
pooled into 24 funds with similar assets or mandates.
▪Setting investment policies and asset allocations are
key fiduciary duties for these funds.
▪Treasury staff reviews and makes recommendations
on the investment policy and asset allocation of each
fund at least annually.
▪Each investment program is designed to balance
fund investment objectives, risk tolerance, and other
attributes:
–Time horizon
–Nominal or real return objectives
–Cashflows, liquidity, and income needs
–Capacity for loss or volatility over short, medium,
and longer time horizons
▪Performance, investment policy, and asset
allocations are discussed quarterly in a transparent
process with an independent investment advisory
committee.
Fund -Account Assets (11/30/22)Risk Tolerance
Short-Term Funds $212,311,621 Low
CBRF -AY19 $1,061,086,784 Low
GeFONSI -AY01 $2,271,665,362 Moderate
International Airport -AY04 $189,450,339 Moderate
GeFONSI II -AY3F $1,672,223,183 Moderate-High
Retiree LTC -AY11 $708,554,303 High/5%
PCE Endowment -AY13 $986,585,359 High/Endowment
Public School Trust Fund -AY08 $722,596,379 High/Endowment
AK Higher Education -AY3L $357,550,961 High/Endowment
Illinois Creek Mine -AY9J $1,292,489 High/Endowment
Education Endowment -AY3G $963,440 High/Endowment
Total $8,184,280,220
5
Asset Allocation
▪Callan is an investment consultant that annually
develops 10-year capital market assumptions for
clients including the Alaska Retirement Management
Board and the Alaska Permanent Fund Corporation.
▪Return expectations have generally declined over time
due to lower interest rates, growth, and inflation
expectations due largely to global trade,technology,
and the transition toward a service economy.
▪Treasury staff evaluates Callan’s capital market
assumptions, other provider’s assumptions, and current
market conditions to develop an asset allocation
approach for each state fund.
▪The goal is to maximize return or minimize risk
consistent with investment objectives and risk
tolerance using a combination of Modern Portfolio
Theory and account specific constraints and
characteristics.
6
2022 Capital Market Assumptions
▪Last January, Callan released their 10-year capital
market assumptions for 2022. Risk and correlation
assumptions were largely unchanged from 2021.
Long-term inflation expectations did increase which
impacted real return forecasts.
▪Staff selects a subset of these asset classes for use in
state funds based on risk, return, diversification,
complexity, and cost.
▪For FY23, staff recommended the use of Broad U.S.
Equities, International Equities, Government 1-3
Fixed Income, Broad U.S. Fixed Income, U.S.
REITs, and Cash Equivalents for state funds.
▪For some portfolios, staff also invests up to 25% of
the fixed income allocation in a tactical bond
portfolio that opportunistically invests in high yield,
TIPS, and other fixed income asset classes in a risk-
managed fashion.
▪Only liquid registered investments are used since
State funds were not allowed to purchase
unregistered investments, including alternative
investments, prior to 2021 due to the SEC’s
definition of accredited investor –a definition that
did not apply to the retirement funds and APFC.
▪Even with the SEC change, illiquid investments are
still problematic for State funds subject to annual
legislative changes.
2022 2022 2022 2022
Asset Classes
10-Year
Geometric
Return
Return
Change
Standard
Deviation
Correlation
to Domestic
Equity
Real
Return
Broad U.S. Equity 6.6%0.0%18.0%1.00 4.4%
Large Cap U.S. Equity 6.5%0.0%17.7%1.00 4.3%
Small/Mid Cap U.S. Equity 6.7%0.0%21.3%0.93 4.5%
International Equity 6.8%0.0%20.7%0.82 4.6%
Developed ex-U.S. Equity 6.5%0.0%19.9%0.78 4.3%
Emerging Market Equity 6.9%0.0%25.2%0.80 4.7%
Cash Equivalents 1.2%0.2%0.9%-0.06 -1.1%
Government 1-3 year Bonds 1.5%0.2%3.5%-0.25 -0.8%
Core U.S. Fixed Income 1.8%0.0%3.8%-0.10 -0.5%
TIPS 1.3%-0.5%5.1%-0.08 -1.0%
Emerging Market Sovereign Debt 3.6%0.1%9.5%0.56 1.4%
High Yield 3.9%-0.5%10.8%0.72 1.7%
Core Real Estate 5.8%0.0%14.2%0.64 3.5%
REITs 6.2%-0.1%20.7%0.80 4.0%
Private Equity 8.0%0.0%27.6%0.77 5.8%
Hedge Funds 4.1%0.1%8.2%0.79 1.9%
Inflation 2.3%0.3%
60/40 Portfolio 5.0%0.0%
7
PCE Investment Policy is Based on Statute
▪By statute, the DOR Commissioner is directed to:
–Apply the prudent-investor rule.
–Invest the assets of the fund considering the preservation of
purchasing power over time.
–Maximize the expected total return.
▪Investment objectives and risk assessment:
–PCE can adopt a high risk-tolerance since it has a long time-
horizon and liquidity needs are manageable.
–To maximize total expected return and consider the preservation
of purchasing power, Treasury staff recommended targeting the
level of risk in a 70% domestic equity, 30% core bond portfolio.
▪The degree of asset smoothing impacts spending volatility.
▪There can be a natural tension between current spending and the
degree of forward expected inflation proofing, which can impact
the preservation of purchasing power over time.
8
Performance Update
Through November 30, 2022
9
Capital Market Performance Update
10
Performance Through November 30, 2022
▪Investment performance was
challenging for both stocks and bonds
in 2022 due to inflation and rising
interest rates. The only asset class
with positive performance was cash.
▪PCE fund performance is driven by
its long-term asset allocation to both
stocks and bonds.
▪The State’s asset class building
blocks have all performed within
expectations with most providing
modest excess returns.
▪Unlike some institutional investors,
the State could not directly invest in
alternative investments until 2021
and they still do not fit well with state
mandates due the combination of
liquidity issues and the potential for
annual legislative changes.
11/30/2022 PCE 3 Months FYTD 1 Year 3 Years 5 Years 6 Years 10 Years
AY13: PCE Endowment Fund 1.48%3.74%-10.31%1.14%3.25%5.37%6.76%
Benchmark 1.45%3.55%-10.56%1.13%3.24%5.40%6.61%
Excess Return 0.03%0.19%0.25%0.01%0.01%-0.03%0.15%
11
Spending, Downside Risk,
and Early FY24 Expectations
12
Asset Allocation, Real Returns, and Downside Risk
State of Alaska FY2023 Asset Allocation
Asset Classes FY23 *FY24*
Broad U.S. Equity 39%39%
Global ex-U.S. Equity 25%25%
US REITS 5%5%
Core U.S. Fixed Income 30%30%
Cash Equivalents 1%1%
Total 100%100%
Optimization Results:
Expected Return - Long-Term 5.60%6.59%
Risk - Standard Deviation 12.41%12.41%
Sharpe Ratio 0.35 0.34
Risk Statistics:
1 -Year 5% Probable Annual Return (5% cVaR)-20.0%-19.0%
3 -Year 5% Probable Annual Return (5% cVaR)-9.2%-8.2%
5 -Year 5% Probable Annual Return (5% cVaR)-5.8%-4.9%
Probability of Loss - 1 Year 32.6%29.8%
Prob. Return < -1%29.7%27.0%
Prob. Return < -3%24.4%22.0%
Prob. Return < -5%19.6%17.5%
Prob. Return < -10%10.4%9.1%
Prob. Return < -20%2.0%1.6%
Probability of Loss - 10 Year 7.7%4.6%
Return Statistics:
Long-Term Real Return 3.35%4.09%
Long-Term Yield 2.42%2.42%
Capital Gain 3.19%4.18%
Dollars: ($Millions)
Assets 986.6 986.6
Expected Annual Earnings 55.2 65.1
10% Probable Annual Return (10% cVaR)(159.6) (149.8)
▪Due to low 2022 returns and higher starting interest rates,
10-year forward return expectations are likely to
meaningfully increase for PCE next year.
▪For discussion, early FY24 estimates are included that will
be revised prior to adopting final State asset allocations
next June.
▪For FY23, the expected 10-year compound return for PCE
was 5.6%.
▪Based on preliminary FY24 capital market expectations,
the 10-year expected return may increase by 99 bps to
6.59% next year.
▪The real return above inflation was expected to be 3.35%
for FY23 and is expected to increase by 74 bps to 4.09%
in FY24 net of a 25 bps increase in 10-year inflation.
▪Prospective downside investment risk as illustrated by the
3-year 5% probable annual return was -9.2% but may
decrease to -8.2% in FY24.
▪5-year smoothing would reduce this prospective FY24
downside risk estimate to -4.9%.
13
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%3/809/803/819/813/829/823/839/833/849/843/859/853/869/863/879/873/889/883/899/893/909/903/919/913/929/923/939/933/949/943/959/953/969/963/979/973/989/983/999/993/009/003/019/013/029/023/039/033/049/043/059/053/069/063/079/073/089/083/099/093/109/103/119/113/129/123/139/133/149/143/159/153/169/163/179/173/189/183/199/193/209/203/219/213/229/2270% Equity/30% Bond Portfolio -Rolling Returns 1979-2022
1 Year 3 Year 5 Year
Historical Drawdowns
Largest Drawdowns 1 Year 3 Year 5 Year
Historical (1979-2022)-32.0%-9.5%-3.2%
5% Probable Annual Return (cVaR)-20.0%-9.2%-5.8%
14
Spending Limit: 5% of the 3-Year Average Monthly Value
▪Statute largely limits spending to 5% of the 3-year average
monthly value of the fund.
▪For FY24 this is $54.9 million, which is based on the 3-year
average from July of 2019 through June of 2022.
▪DOR does not make short-term forecasts on the direction of
markets, however in one downside case, if markets
remained flat for the next 2.6 years and PCE continued to
spend at the statutory limit, the FY27 spending limit would
be $46 million. This would be a ~16% reduction in
spending from FY24.
Fiscal Year PCE 5%
Limit $MM
2015 31.6
2016 41.1
2017 45.0
2018 47.1
2019 47.9
2020 49.6
2021 51.2
2022 52.9
2023 53.7
2024 54.9
$920,604,418.67
5.00%
$46,030,220.93
State of Alaska - Proforma downside case FY27
07/01/2022 to 06/30/2025Average Month End NAV
AY13: PCE Endowment Fund
Jul
Aug
Month End NAV
FY2023
Month End NAV
FY2024
Sep $893,337,444.13 $941,510,950.53 $887,062,000.86
Oct $926,549,755.47 $936,935,939.00 $882,637,385.55
Nov $986,585,358.79 $932,360,927.48 $878,212,770.24
Dec $982,106,876.84 $927,785,915.95 $873,788,154.93
Jan $977,628,394.88 $923,210,904.43 $869,363,539.62
Feb $973,149,912.93 $918,635,892.90 $864,938,924.31
Mar $968,671,430.97 $914,060,881.37 $860,514,309.00
Apr $964,192,949.02 $909,485,869.85 $856,089,693.69
May $959,714,467.07 $904,910,858.32 $851,665,078.38
Jun $955,235,985.11 $900,335,846.79 $847,240,463.07
$946,085,962.06 $891,486,616.17
Appropriation %
Available Balance$1,017,113,703.68 $950,660,973.58 $895,911,231.48
$972,581,703.78
Month End NAV
FY2025
Average Balance
15
Summary
▪The Department of Revenue has a thorough and transparent
process to review and approve investment policies.
▪The asset allocation is appropriate given PCE’s long time-
horizon and statutory goals of maximizing total return while
considering the preservation of purchasing power over time.
▪3-year asset smoothing dampens market volatility but return
drawdowns of ~10% should be expected periodically over 3-
year periods.
▪Forward spending policies that can accommodate downside
returns on top of asset reductions due to annual spending are
recommended. For planning purposes, a spending reduction
of 20% over a three-year period is a realistic downside
scenario.
▪A 5-year smoothing period would dampen market volatility
further and is a common volatility reduction measure for
endowments.
▪Balancing current spending and the preservation of
purchasing power is a challenge.
State of Alaska FY2023 Asset Allocation
Asset Classes FY23 *FY24*
Broad U.S. Equity 39%39%
Global ex-U.S. Equity 25%25%
US REITS 5%5%
Core U.S. Fixed Income 30%30%
Cash Equivalents 1%1%
Total 100%100%
Optimization Results:
Expected Return - Long-Term 5.60%6.59%
Risk - Standard Deviation 12.41%12.41%
Sharpe Ratio 0.35 0.34
Risk Statistics:
1 -Year 5% Probable Annual Return (5% cVaR)-20.0%-19.0%
3 -Year 5% Probable Annual Return (5% cVaR)-9.2%-8.2%
5 -Year 5% Probable Annual Return (5% cVaR)-5.8%-4.9%
Probability of Loss - 1 Year 32.6%29.8%
Prob. Return < -1%29.7%27.0%
Prob. Return < -3%24.4%22.0%
Prob. Return < -5%19.6%17.5%
Prob. Return < -10%10.4%9.1%
Prob. Return < -20%2.0%1.6%
Probability of Loss - 10 Year 7.7%4.6%
Return Statistics:
Long-Term Real Return 3.35%4.09%
Long-Term Yield 2.42%2.42%
Capital Gain 3.19%4.18%
Dollars: ($Millions)
Assets 986.6 986.6
Expected Annual Earnings 55.2 65.1
10% Probable Annual Return (10% cVaR)(159.6) (149.8)
16
Questions?
17
Appendix:
Economic and Market Update
Through November 2022
18
The Economy, Geopolitics, and Inflation
▪Early in 2022, the Russia/Ukraine crisis dominated headlines and capital markets. The direct impact to equity markets was mu ted,
but the effect on energy inflation and European growth was pronounced.
▪Since then, Inflation has dominated markets with CPI peaking at 9.1% in June before declining to 7.1% in November. Inflation
remains sticky and well in excess of the Fed’s inflation target driven by energy/commodity prices, wage pressure, and remaini ng
supply chain issues.
▪Employment remains tight with materially more job openings than unemployed workers leading to wage pressure.
▪Inflation and rising interest rates has created a challenging dynamic for economic growth with recession increasingly likely.
19
Interest Rates and the Federal Reserve
▪Energy price increases along with other pressures have catalyzed the Federal Reserve into action to control inflation.
▪The Fed raised rates from zero to 4.50% in 2022 and additional increases are expected.
▪The Fed also plans to decrease the size of its balance sheet, which doubled through the pandemic.
▪These actions have had a direct impact on fixed income markets and other capital markets.
20
Fixed Income
▪Yields have increased dramatically in reaction to the Fed’s rate increase plans and are at 10-year high levels.
▪Spreads have also increased, and most bond sectors have performed poorly.
▪Fixed income investments remain exposed to further rate increases but are cushioned by higher starting yields.
21
Equity Markets
▪With the recent stock market correction, U.S. equities are back to more normal valuations.
▪After breaking records in 2021, corporate profits are exposed to slowing growth and inflation.
▪International equity valuations are close to all time lows relative to the U.S. with high dividend yields.
22
Historical Stock and Bond Declines
▪After a period of very strong equity performance, stocks are down 14% year-to-date.
▪Fixed income is down 13%, which is unprecedented since rates have risen strongly from a low starting point.
23
Where do we go from here?
▪Global uncertainty is high and market
volatility will likely remain elevated.
▪Investment performance will be
challenging in the near term.
▪For markets to improve, inflation needs to
stabilize. This may take time since
housing and labor markets correct slowly
and supply chain issues and energy prices
are not easily influenced by monetary
policy.
▪Other factors also increase uncertainty:
–War in Ukraine and related
energy/economic impact on Europe.
–Strength of the U.S. Dollar and impact
on global trade and other economies.
–Impact of credit contraction on
markets and economy. Debt will be
less available and more expensive.
–Potential recession severity.
AEA Resolution No. 2023-01 FY23 Operating Budget & Capital Budget
ALASKA ENERGY AUTHORITY
RESOLUTION NO. 2023-01
RESOLUTION OF THE ALASKA ENERGY AUTHORITY
RATIFYING GOVERNORS SUBMISSION OF FY24
OPERATING BUDGET & CAPITAL BUDGET
WHEREAS, the operating and capital budget of the Alaska Energy Authority (“the
Authority”) are subject to the Executive Budget Act;
WHEREAS, the FY24 operating and capital budget submissions for the Authority are
included in the Governor’s State operating and capital budget submissions to the Alaska State
Legislature (“the Legislature”) and are set out in Attachment A;
WHEREAS, the Governor’s State operating and capital budget submissions, including the
Authority’s operating and capital budget submissions, are subject to appropriation by the
Legislature; and
WHEREAS, the Board provides oversight for the Authority and its finances.
NOW, THEREFORE, BE IT RESOLVED BY THE ALASKA ENERGY
AUTHORITY AS FOLLOWS:
Section 1. The Authority’s FY24 operating and capital budget submissions are ratified
by the Board. The final FY24 operating and capital budget are subject to approval and
appropriation by the Legislature.
Dated at Anchorage, Alaska, this 18th day of January 2023.
____________________________________
J. Dana Pruhs, Chair
______________________________________ [SEAL]
Curtis W. Thayer, Secretary
Attachment A
Alaska Energy Authority Operating Budget
FY23 $ 41,225.900
FY24 (proposed) $ 58,120,700
Alaska Energy Authority - Capital Budget
Federal State Other Total
FY22 $ 25,000,000 $ 15,450,973 $ 40,450,973
FY23 $ 41,024,363 $ 38,583,158 $ 400,000 $ 80,007,521
FY24 (proposed) $ 46,344,123 $ 28,016,579 $ 74,360,702
Alaska Energy Authority
AEA
Receipts
Federal
Receipts
General
Fund I/A Receipts CIP Receipts Power
Project Fund
Statutory
Designated
PCE
Endowment
GF Program
Receipts
Designated
Renewable
Energy Fund
FY23 (Authorized)781.3 1,208.6 852.2 124.3 2,570.1 996.4 150.0 736.8 50.0 1,401.2
FY24 (Proposed)781.3 1,208.6 1,215.3 124.3 3,528.1 996.4 150.0 970.7 50.0 1,401.2
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
4,000.0
$$$ in Thousands (000's)Alaska Energy Authority Operating Budget
FY23 (authorized) vs. FY24 (proposed)
FY23 (Authorized)FY24 (Proposed)
**PCE FY23 = $32,355.0
PCE FY24 = $47,678.8
**
Alaska Energy Authority
AEA Receipts, $781.3 , 8%
Federal Receipts, $1,208.6 ,
12%
General Fund, $1,215.3 ,
12%
I/A Receipts, $124.3 , 1%
CIP Receipts, $3,528.1 ,
34%
Power Project Fund, $996.4
, 10%
Statutory Designated,
$150.0 , 1%
PCE Endowment, $970.7 ,
9%
GF Program Receipts Designated,
$50.0 , 0%
Renewable Energy Fund,
$1,401.2 , 13%
Alaska Energy Authority
FY24 Governor's Proposed Operating Budget
Alaska Energy Authority
7,500,000
5,500,000
13,000,000
7,500,000
5,500,000
13,000,000
7,500,000
5,500,000
13,000,000
5,000,000 5,000,000
4,750,973 4,750,973
15,000,000 15,000,000
5,000,000
5,000,000
200,000 200,000 200,000 200,000
200,000
200,000
2,500,000 2,500,000
400,000
5,000,000
3,000,000 3,000,000
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
Federal State TOTAL Federal State Other Total Federal State Total
FY2022 FY2023 FY2024 Governor's Proposed
Alaska Energy Authority Capital Budget
Compare FY22-FY24 (proposed)
Bulk Fuel Upgrades Rural Power Systems Upgrades Alternative Energy & Energy Efficiency Renewable Energy Fund Grant Program
Electrical Emergencies IIJA Strategic Plan for Railbelt Assets Volkswagen Settlement - Interest
Hydroelectric Development Grants to Names Recipient - GVEA
Alaska Energy Authority
Bulk Fuel Upgrades,
$13,000,000
Rural Power Systems Upgrades,
$32,500,000
Hydroelectric Development,
$5,000,000
IIJA, $15,660,702
Renewable Energy & Efficiency
Programs, $5,000,000
Grants to Names Recipient -GVEA,
$3,000,000
Electrical Emergencies, $200,000
Alaska Energy Authority
FY24 Governor's Proposed Capital Budget -$74,360,702
ALASKA ENERGY AUTHORITY
Governor's Proposed Capital Budget ‐ FY2024
Updated December 19, 2022
Project Name State Funding
Request
Federal
Receipt
Authority
Total Fund Code Brief Summary
Electrical Emergency
Response $ 200,000 $ 200,000 1004 - General
Fund
Critical to rural communities - provides
technical support when an electrical utility
has lost, or will lose the ability to generate
or transmit power. AS42.45.900
Rural Power Systems
Upgrades (state dollars are
matching funds)
$ 7,500,000 $ 25,000,000 $ 32,500,000
1002 - Fed
Receipts /1003
G/F Match
Electric utility systems are part of the
basic infrastructure of rural communities.
New power systems are designed to meet
accepted utility standards for safety,
reliability, and environmental protections.
Bulk Fuel Upgrades (state
dollars are matching funds) $ 5,500,000 $ 7,500,000 $ 13,000,000
1002 - Fed
Receipts / 1003
G/F Match
Bulk fuel tank farm upgrades. Replaces
aging tanks that may be leaking. Adds
capacity to meet community needs. Meets
code compliance standards improving life,
health, and safety of community.
Hydroelectric Development $ 5,000,000 $ - $ 5,000,000 1004 - UGF
Review and study of 2 major hydroelectric
sites: 1) Dixon Diversion and 2) Godwin
Creek.
Renewable Energy &
Efficiency Programs (AEEE) $ 5,000,000 $ - $ 5,000,000 1004 - UGF
Program support and federal match for
AEA's renewable energy & efficiency
programs (biomass, efficiency, EV, energy
storage, geothermal, heat recovery,
hydroelectric, solar, wind and nuclear).
Grants to Named Recipient (AS
37.05.316) Three‐Phase
Power Extensions and
Upgrades to Delta Farm
Region and Co‐op
$ 3,000,000 $ - $ 3,000,000 1004 - UGF
Provides $3 million to GVEA for the
purpose of extending three-phase power
throughout the Delta region to enhance
production, incentivize expansion, and
lower input costs for producers as well as
customers.
IIJA ‐ Statewide Grid
Resilience and Reliability $ 1,816,579 $ 12,110,523 $ 13,927,102
1002 - Fed
Receipts / 1003
G/F Match
IIJA - Section 40101 (d) - formula grant
program to strengthen and modernize
America's power grid against wildfire,
extreme weather, and other natural
disasters. Improve resilience of the
electric grid against disruptive events.
Funding over five years to total over $60M.
IIJA ‐ Electric Vehicle Charging
Equipment Deployment ‐
Competitive
$ - $ 1,670,000 $ 1,670,000 1002 Fed Receipts
IIJA - Competitive application submitted
November 2022. Goals of the project are
to increase access to vehicle electrification
in multiple rural and underserved
communities across Alaska; demonstrate
the value of EV; and support development
of community charging equipment. 20%
match is required - to be shared by Project
Partners and AEA as needed.
IIJA ‐ New Energy Auditor
Training ‐ Formula $ - $ 63,600 $ 63,600 1002 Fed Receipts
Training for energy audits of commercial
and residential buildings. AEA will RSA
with AHFC.
TOTALS $ 28,016,579 $ 46,344,123 $ 74,360,702
Project Name State Funding
Request
Federal
Receipt
Authority
Total Fund Code Brief Summary
IIJA State Energy Program ‐
Formula ‐ 40109 IIJA $ - $ 2,865,930 $ 2,865,930 1002 Fed Receipts
USDOE SEP formula funds to develop and
implement clean energy programs and
projects. Lump sum of $3,661,930 for AEA
less $796,000 federal receipt authorization
received in FY23 = balance requested in
FY24. Application submitted December
2022.
Defense Community
Infrastructure Pilot Program ‐
Black Rapids Training Site in
Delta Junction
$ - $ 12,752,540 $ 12,752,540 1002 Fed Receipts
Extension of an electric power line to the
Black Rapids Training Site. AEA
partnership with GVEA. No state match is
required. GVEA has committed funds to
complete the project.
TOTALS $ ‐ $ 15,618,470 $ 15,618,470
TOTAL ALL $ 28,016,579 $ 61,962,593 $ 89,979,172
FY2024
FY2023 Supplemental Request ‐ Pending Release January 2023
Alaska Energy Authority - Electrical Emergencies Program FY2024 Request:
Reference No:
$200,000
32950
AP/AL: Appropriation Project Type: Energy
Category: Development
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W. Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
The Alaska Energy Authority’s (AEA) Electrical Emergencies Program is critical to rural communities.
Electrical emergencies can result in the loss of communications, lights, refrigeration systems,
washeterias, water and sewer systems, and the use of other basic infrastructure and equipment. The
program contributes to the Department of Commerce, Community, and Economic Development's
mission of promoting a healthy economy and strong communities, as electricity is considered
essential for both community development and economic growth.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1004 Gen
Fund
$200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $1,200,000
Total:$200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $1,200,000
State Match Required One-Time Project Phased - new Phased - underway Ongoing
0% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Sec11 Ch11 SLA2022 P85 L15 HB281 $200,000
Sec11 Ch1 SLA2021 P103 L18 HB69 $200,000
Sec1 Ch19 SLA2018 P2 L20 SB142 $330,000
Sec12 Ch1 SLA2017 P16 L30 SB23 $330,000
Sec27 Ch38 SLA2015 P27 L16 SB26 $330,000
Sec1 Ch18 SLA2014 P3 L6 SB119 $330,000
Sec1 Ch17 SLA2012 P6 L11 SB160 $330,000
Sec4 Ch5 SLA2011 P127 L19 SB46 $330,000
Project Description/Justification:
The Electrical Emergencies Program often involves a life or safety issue and is the last resort for
communities with an electrical emergency. This program provides support when an electric utility has
lost or will lose the ability to generate or transmit power to its customers and the condition is a threat
to life, health, and/or property. Funding provides the current level of technical support through the
Electrical Emergencies Program.
Power outages are expensive and compromise public safety. Some risks include:
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 32950
Page 1 Released December 15, 2022
Alaska Energy Authority - Electrical Emergencies Program FY2024 Request:
Reference No:
$200,000
32950
- Water and sewer systems freezing and bursting
- Fire hazards
- Medical clinics and other public facilities closing
Electrical emergencies may involve power plant failures and/or distribution system failures.
If the Alaska Energy Authority (AEA) is unable to respond, the response to loss of power
emergencies will be redirected to the Department of Military and Veterans Affairs, Division of
Homeland Security and Emergency Management, State Emergency Operations Center
(SEOC).
AEA received $200,000 in the FY2023 budget and anticipates funds will be depleted or nearly
depleted by the beginning of FY2024.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 32950
Page 2 Released December 15, 2022
Alaska Energy Authority - Rural Power Systems Upgrades FY2024 Request:
Reference No:
$32,500,000
52498
AP/AL: Appropriation Project Type: Energy
Category: Development
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W. Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
The Rural Power System Upgrades (RPSU) program invests $35 million in rural communities in
FY2024. Electric utility systems are essential infrastructure in rural communities. New power systems
are designed to meet accepted utility standards for safety, reliability, and environmental protections.
Upgrading rural power generation and distribution systems includes more than the replacement of
entire facilities. As funding availability diminishes, emphasis on maintenance, improvement projects,
training for operations, and planned maintenance have become critical.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1002 Fed
Rcpts
$25,000,000 $25,000,000 $25,000,000 $25,000,000 $25,000,000 $25,000,000
$150,000,000
1003 G/F
Match
$7,500,000 $10,000,000 $10,000,000 $10,000,000 $10,000,000 $10,000,000 $57,500,000
Total:$32,500,000 $35,000,000 $35,000,000 $35,000,000 $35,000,000 $35,000,000 $207,500,000
State Match Required One-Time Project Phased - new Phased - underway Ongoing
20% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Sec11 Ch11 SLA2022 P85 L20 HB281 $20,000,000
Sec8 Ch1 SLA2021 P70 L21 HB69 $17,500,000
Sec5 Ch8 SLA2020 P64 L17 HB205 $17,500,000
Sec1 Ch19 SLA2018 P2 L22 SB142 $21,900,000
Sec1 Ch2 SLA2016 P2 L20 SB138 $1,446,142
Sec18 Ch2 SLA2016 P35 L28 SB138 $1,053,858
Sec1 Ch18 SLA2014 P6 L9 SB119 $5,120,000
Sec1 Ch16 SLA2013 P4 L18 SB18 $10,800,000
Sec1 Ch17 SLA2012 P6 L13 SB160 $13,000,000
Project Description/Justification:
The Alaska Energy Authority (AEA) is working in partnership with the Denali Commission for the
FY2024 work plan to identify projects for funding. The projects preliminarily identified are the following
communities: Red Devil, Karluk, Chalkytsik, and Koyukuk. The AEA and the Denali Commission will
continue to refine project selection and cost estimates.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 52498
Page 1 Released December 15, 2022
Alaska Energy Authority - Rural Power Systems Upgrades FY2024 Request:
Reference No:
$32,500,000
52498
In FY2024 it is anticipated that federal receipt authority will be required for new funding sources such
as USDA High Cost of Energy Grants and others.
State funds are used to leverage federal funds to expand the number of communities served by
this program which advances sustainable, efficient energy infrastructure projects that decrease
energy costs in rural Alaska over the long term.
State matching funds are required for Denali Commission funded construction projects, 20 percent for
distressed communities and 50 percent for non-distressed communities. The distressed community
list is maintained by the Denali Commission.
This program concentrates on power production and delivery, including diesel powerhouse, heat
recovery, and electrical distribution. Efficiency, reliability, safety, and sustainability are primary
drivers throughout the conceptual design, final design, and construction process.
After completion of the project, the rural utility is required to employ a qualified operator to ensure
that the system is properly operated and maintained. The AEA provides training and technical
assistance to assist the community with proper operation of the new facility.
This program began in 1997 and has expanded since FY1999 with federal funding from the Denali
Commission. Since FY2011, any available federal funds for construction projects now require a 20
percent - 50 percent match, depending on whether the community is considered distressed.
The deferred maintenance need for RPSU is estimated at approximately $327 million.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 52498
Page 2 Released December 15, 2022
Alaska Energy Authority - Bulk Fuel Upgrades FY2024 Request:
Reference No:
$13,000,000
49734
AP/AL: Appropriation Project Type: Energy
Category: Development
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W. Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
The Bulk Fuel Upgrades (BFU) program will invest $13 million in rural Alaska in FY2024. The BFU
program upgrades non-compliant bulk fuel tank farms in rural communities. This project reduces the
cost of energy by reducing or eliminating fuel loss from leaks, spills, or catastrophic failure. By
providing enough capacity for current and planned needs, communities may purchase fuel in larger
quantities at a lower cost per gallon. Projects ensure facilities meet code compliance standards
improving life, health, and safety of the community.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1002 Fed
Rcpts
$7,500,000 $7,500,000 $7,500,000 $7,500,000 $7,500,000 $7,500,000 $45,000,000
1003 G/F
Match
$5,500,000 $5,500,000 $5,500,000 $5,500,000 $5,500,000 $5,500,000 $33,000,000
Total:$13,000,000 $13,000,000 $13,000,000 $13,000,000 $13,000,000 $13,000,000 $78,000,000
State Match Required One-Time Project Phased - new Phased - underway Ongoing
20% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Sec11 Ch11 SLA2022 P85 L13 HB281 $13,000,000
Sec8 Ch19 SLA2021 P70 L19 HB69 $13,000,000
Sec1 Ch19 SLA2018 P2 L19 SB142 $17,000,000
Sec1 Ch1 SLA2017 P2 L22 SB23 $2,420,000
Sec1 Ch2 SLA2016 P2 L18 SB138 $1,300,000
Sec1 Ch18 SLA2014 P3 L33 SB119 $7,300,000
Sec1 Ch16 SLA2013 P4 L14 SB18 $6,000,000
Sec1 Ch17 SLA2012 P6 L9 SB160 $7,000,000
Declining funds available for bulk fuel upgrades in rural Alaska means that bulk fuel tanks are not
upgraded timely. As a result, communities are left with aging fuel tanks that may not meet the
capacity needs of the community or are at risk of leaks, contamination, and/or failure. Recent
emphasis has also been put on barge header projects to protect river and ocean side fuel systems.
Project Description/Justification:
This request includes federal receipt authority and state funds for bulk fuel tank farm upgrades.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 49734
Page 1 Released December 15, 2022
Alaska Energy Authority - Bulk Fuel Upgrades FY2024 Request:
Reference No:
$13,000,000
49734
The AEA is working in partnership with the Denali Commission on the FY2024 work plan to
prioritize project selection. The projects preliminarily identified for construction are in the following
communities: Scammon Bay, Ekwok, Shageluk and Birch Creek. The AEA and the Denali
Commission will continue to refine the project selection and cost estimates over the following
months.
State funds are used to leverage federal funds to expand the number of communities served by
this program, which advances sustainable, efficient energy infrastructure projects that decrease
energy costs in rural Alaska.
State matching funds are required for Denali Commission funded construction projects, 20 percent
for distressed communities and 50 percent for non-distressed communities. The distressed
community list is maintained by the Denali Commission.
Most of the rural tank farms have serious deficiencies that typically include:
Inadequate dikes to contain fuel spills
Inadequate foundations, which could cause gradual tank movement and fuel leakage
Improper piping systems and joints, which are the most common source of fuel leaks
Improper siting near wells, beaches, and buildings, or within a flood plain
Tanks that are rusted or damaged beyond repair
Electrical code violations
Inadequate security
The deferred maintenance need for BFU is estimated at approximately $864 million.
Denali Commission has provided $480,000 in funding to AEA to begin an inventory and assessment
of eligible rural bulk fuel facilities per 3 AAC 108.110 (b), (d), and (e). This will be a multi-year effort
and provide accurate information regarding the condition of bulk fuel facilities which will enable the
same benefits realized from the power systems inventory and assessment. In addition to the normal
gathering and assessment of technical data, full three-dimensional (3D) imagery of the bulk fuel
facility will be captured.
The AEA now uses 3D imaging and Geographic Information System (GIS) software to capture
imagery, collect measurements, and process data to create, edit and share 3D renderings of rural
bulk fuel facilities. This will be used for construction management, operator training, and remote
assistance. The 3D platform enables AEA project managers to keep track of key project milestones
and immediately assess project information. The targeted result is accelerated productivity,
decision-making, and cost savings. Additionally, this information will be coordinated with the United
States Coast Guard to improve compliance of the facilities. State matching funds will be required in
future years.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 49734
Page 2 Released December 15, 2022
Alaska Energy Authority - Hydroelectric Development FY2024 Request:
Reference No:
$5,000,000
64648
AP/AL: Appropriation Project Type: Energy
Category: Development
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W. Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
The Bradley Lake Hydroelectric Project (Bradley Lake) has been a low-cost source of electricity for
the Railbelt for more than 30 years. The Alaska Energy Authority (AEA) is currently studying new
project opportunities at Bradley Lake and a new hydroelectric site at Godwin Creek near Seward. The
close distance to Railbelt transmission, water storage, and significant energy makes this project
desirable. Engineering and environmental studies are needed to determine the feasibility of these
potential projects. Optimizing the energy resource potential at Bradley Lake and adding a new Railbelt
hydroelectric project will contribute significant amounts of reliable, low-cost renewable energy into the
Railbelt system.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1004 Gen
Fund
$5,000,000 $5,000,000
Total:$5,000,000 $0 $0 $0 $0 $0 $5,000,000
State Match Required One-Time Project Phased - new Phased - underway Ongoing
0% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Project Description/Justification:
The Bradley Lake Project, completed in 1991, is a 120-megawatt (MW) facility that generates about
10 percent of the total annual power used by Railbelt electric utilities and provides some of the
lowest-cost power to more than 550,000 Alaskans and “electrifies” 54,000 homes. Following the
successful completion of the West Fork Upper Battle Creek Diversion Project in 2020, AEA has
identified two major hydroelectric project opportunities: 1) Dixon Diversion Project, which is part of the
Bradley Project, potentially could electrify an additional 24-30 thousand homes and 2) Godwin Creek
hydroelectric project, near Seward, could potentially electrify an additional 10-20 thousand homes.
The combined potential energy of both Dixon and Godwin projects is estimated to be an additional 6
percent - 8 percent of the renewable energy component of the total Railbelt energy.
The development of one or both projects will provide significant energy to the Railbelt system and
allow other non-firm renewable generation to be developed for long term lower cost energy and lower
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64648
Page 1 Released December 15, 2022
Alaska Energy Authority - Hydroelectric Development FY2024 Request:
Reference No:
$5,000,000
64648
carbon. The funds will be used for engineering studies (feasibility, hydrological, geological) and
environmental studies (fisheries, water quality, geomorphology). Estimates for the preliminary studies
for the Dixon Diversion are $12 million and $1.5 million for Godwin Creek.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64648
Page 2 Released December 15, 2022
Alaska Energy Authority - Renewable Energy and
Efficiency Programs
FY2024 Request:
Reference No:
$5,000,000
64641
AP/AL: Appropriation Project Type: Energy
Category: Development
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W. Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
Develop the Alaska Energy Authority's (AEA) renewable energy & efficiency programs (biomass,
efficiency, electric vehicle, energy storage, geothermal, heat recovery, hydroelectric, solar, wind and
nuclear). These programs grow Alaska’s clean energy economy. These programs provide critical
technical support for communities interested in developing renewable energy and efficiency projects.
Funds are used for reconnaissance level studies and feasibility analysis to help identify project
locations, and technical assistance and support for utilities and communities interested in developing
cost-effective renewable energy and energy efficiency projects. This request leverages federal funds.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1004 Gen
Fund
$5,000,000 $5,000,000
Total:$5,000,000 $0 $0 $0 $0 $0 $5,000,000
State Match Required One-Time Project Phased - new Phased - underway Ongoing
20% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Sec8 Ch1 SLA2021 P70 L16 HB69 $5,000,000
Sec1 Ch16 SLA2013 P4 L11 SB18 $2,000,000
Sec1 Ch17 SLA2012 P6 L3 SB160 $4,800,000
Sec7 Ch43 SLA2010 P20 L24 SB230 $8,000,000
Project Description/Justification:
This request helps AEA leverage funding from federal partners such as, but not limited to, the Denali
Commission, the United States Department of Energy, and the United States Department of
Agriculture. This request is imperative for the continued development of renewable energy fields
specific to Alaska. Federal funds typically require a 20 percent state match.
The work conducted with these funds strongly supports the success of the Renewable Energy Fund
and supports achieving the 50 percent renewable energy goal as well as the 25 percent reduction in
energy usage through efficiency measures.
In addition to providing a “pipeline” of qualified projects to advance towards construction, such as the
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64641
Page 1 Released December 15, 2022
Alaska Energy Authority - Renewable Energy and
Efficiency Programs
FY2024 Request:
Reference No:
$5,000,000
64641
Renewable Energy Grant Fund program and the Power Project Fund, this program removes barriers
and solves problems in each of the different renewable energy technology types. Each program area
works on statewide resource assessments, regulatory and permitting issues, outreach, and stakeholder
involvement in order to advance cost-effective renewable energy in Alaska. The programs provide a
foundation of support critical to the proper development of renewable energy technologies in Alaska.
Each of the renewable technology areas and efficiency have a working group facilitated by AEA that
supports the proper application of their technology in both urban and rural communities in the state.
These general funds will support the continuation of these programs.
The technology programs include the following focuses and projects:
Biomass: The AEA’s biomass energy program focuses on exploring opportunities to increase
utilization of wood for energy production throughout the state. The program provides technical
assistance, project management, and funding to develop wood-fired systems that displace fuel oil for
heating public facilities.
Efficiency: The AEA’s energy efficiency program focuses on rural community outreach and education,
public buildings, commercial buildings, and public infrastructure such as street lighting and water &
sewer infrastructure. AEA’s core efficiency program efforts are focused on two primary goals: 1)
achieving the most cost-effective energy efficiency gain, and 2) providing services where energy costs
are critically high.
Electric Vehicle: The transportation sector is rapidly transitioning to electric vehicles (EVs). These
vehicles and their charging infrastructure can bring new industries to Alaska, helping to promote the
state economy and save Alaskans money. Alaskans have identified barriers to adoption such as range
anxiety and performance in cold climates. The AEA has a mission to lead the effort to minimize barriers
that inhibit EV adoption in Alaska and will continue to seek other federal opportunities (IIJA) to help
support advancement of this program.
Energy Storage: Energy storage allows for energy from non-firm generation sources such as wind or
base load thermal generation sources such as natural gas or coal to be stored for later use. The stored
energy is used during periods of high electrical demand to avoid turning on additional generation units
or to provide energy when the non-firm source is not generating. Energy storage can be accomplished
through the use of several different technologies such as, but not limited to, battery energy storage
systems (BESS), water storage, pumped hydro, flywheels, and compressed air. Battery storage can be
used in many different ways but typically it is to peak shave, support system stability, or prevent
blackouts.
Geothermal: Alaska has 141 volcanoes and over 100 hot springs. Many of these have the potential for
providing energy for agriculture, space heating and other power generation purposes.
Heat Recovery and CHP: Combined heat and power (CHP) project development activities, including
“waste” heat recovery, are supported through a U.S. Department of Energy (DOE) cost-share program
for technical assistance and project development.
Hydroelectric: The hydroelectric program focuses on improving efficiency and quality in hydroelectric
development, lowering the cost of construction, and coordinating with state, federal, municipalities,
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64641
Page 2 Released December 15, 2022
Alaska Energy Authority - Renewable Energy and
Efficiency Programs
FY2024 Request:
Reference No:
$5,000,000
64641
tribal entities, and private investors in analyzing, planning, and generally assisting hydroelectric project
development.
Solar: The AEA provides solar energy information, resources, and technical assistance. The Power
Project Fund and the Renewable Energy Fund have provided grant and loan financing for several EV
projects on the Railbelt and in rural Alaska.
Wind: Since 2012, Alaska’s wind energy capacity has increased 400 percent. This growth is supported
by AEA’s Renewable Energy Fund and information sharing among wind energy producers and
stakeholders. In partnership with the Wind Working Group, AEA facilitates annual educational events
including the wind-diesel and energy storage workshops. The AEA assists communities in evaluating
wind energy and often aids in rural community decision-making.
Nuclear: The AEA’s work in nuclear energy includes general program management, assisting with the
Nuclear Roadmap Development, stakeholder engagement, and working with partners like the Alaska
Center of Energy and Power.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64641
Page 3 Released December 15, 2022
Three-Phase Power Extensions and Upgrades to Delta
Farm Region and Co-Op
FY2024 Request:
Reference No:
$3,000,000
64822
AP/AL: Appropriation Project Type: Energy
Category: Development Recipient: Golden Valley Electric Association
Location: Delta Junction House District: Richardson Hwy/East Mat-Su
(HD 9)
Impact House District: Richardson Hwy/East
Mat-Su (HD 9)
Contact: Micaela Fowler
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)465-2506
Brief Summary and Statement of Need:
This appropriation provides a $3 million grant to the Golden Valley Electric Association for the
purpose of extending three-phase power throughout the Delta region to enhance production,
incentivize expansion, and lower input costs for producers as well as customers.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1004 Gen
Fund
$3,000,000 $3,000,000
Total:$3,000,000 $0 $0 $0 $0 $0 $3,000,000
State Match Required One-Time Project Phased - new Phased - underway Ongoing
0% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Project Description/Justification:
To further food security objectives in Alaska, priorities in the near term will focus on enhancing
existing production and incentivizing expansion. Many farms in the Delta region either lack
three-phase power or are off the power grid entirely.
The Delta Co-Op is currently served by single phase power but must use a diesel-powered
three-phase generator to operate its grain dryer at a dramatically higher cost. By extending
three-phase power to the remaining farms that lack three-phase service, along with the Co-Op, this
extension and upgrade will lower input costs for producers, prices for their customers, and potentially
facilitate expanded use of irrigation and drying equipment.
This project is in Golden Valley Electric Association’s service area and the estimated cost is $3 million
to extend and/or upgrade service to the Co-Op, Saw Mill Road, and Cummings Road. Because the
Co-Op serves the entire region, expansion of three-phase service will be prioritized for this location.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64822
Page 1 Released December 15, 2022
Alaska Energy Authority - Statewide Grid Resilience and
Reliability - IIJA Formula
FY2024 Request:
Reference No:
$13,927,102
64650
AP/AL: Appropriation Project Type: Energy
Category: Development
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W. Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
In support of the Infrastructure Investment and Jobs Act (IIJA) and the Building a Better Grid Initiative,
the Department of Energy (DOE) developed a $2.3 billion formula grant program to strengthen and
modernize America’s power grid against wildfires, extreme weather, and other natural disasters.
Section 40101 (d) of the IIJA established a formula grant program (Program) providing $459 million
annually over a period of five years to states (and Indian Tribes) to improve the resilience of the
electric grid against disruptive events. The DOE’s allocation of funds to the State of Alaska under IIJA
40101(d) is $12,110,523 annually for five years.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1002 Fed
Rcpts
$12,110,523 $12,110,523 $12,110,523 $12,110,523 $48,442,092
1003 G/F
Match
$1,816,579 $1,816,579 $1,816,579 $5,449,737
Total:$13,927,102 $13,927,102 $13,927,102 $12,110,523 $0 $0 $53,891,829
State Match Required One-Time Project Phased - new Phased - underway Ongoing
0% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Sec11 Ch11 SLA2022 P85 L10 HB281 $12,110,523
Sec35 Ch11 SLA2022 P144 L1 HB281 $3,633,158
Formula-based funding requires a 15 percent state match and a 33 percent small utility match.
Project Description/Justification:
The Alaska Energy Authority (AEA) is the sole state entity for the state of Alaska to apply for,
receive, and administer the IIJA Section 40101(d) federal funds. This request is for the State
allocation only and does not include funds allocated to Tribes.
The objective of this program is to improve the resilience of the electric grid against disruptive
events. Per IIJA section 40101(a)(1), a disruptive event is “an event in which operations of the
electric grid are disrupted, preventively shut off, or cannot operate safely due to extreme weather,
wildfire, or a natural disaster.” To achieve this objective, funding provided by DOE under the program
may be used to implement a wide range of resilience measures intended to mitigate the impact of
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64650
Page 1 Released December 15, 2022
Alaska Energy Authority - Statewide Grid Resilience and
Reliability - IIJA Formula
FY2024 Request:
Reference No:
$13,927,102
64650
disruptive events, including:
weatherization technologies and equipment;a)
fire-resistant technologies and fire prevention systems;b)
monitoring and control technologies;c)
the undergrounding of electrical equipment;d)
utility pole management;e)
the relocation of power lines or the reconductoring of power lines with low-sag, advancedf)
conductors;
vegetation and fuel-load management;g)
the use or construction of distributed energy resources for enhancing system adaptive capacityh)
during disruptive events, including:
microgrids; anda.
battery-storage subcomponents;b.
adaptive protection technologies;i)
advanced modeling technologies;j)
hardening of power lines, facilities, substations, of other systems; andk)
the replacement of old overhead conductors and underground cables.l)
Funding may also be used for the training, recruitment, retention, and retraining of skilled and properly
credentialed workers in order to perform the work required for the resilience measures listed above.
Resilience measures that are not allowed under Section 40101(d) include:
Construction of a new-1.
Electric generating facility; ora.
Large-scale battery-storage facility that is not used for enhancing system adaptive capacityb.
during disruptive events; or
Cybersecurity.2.
For the purpose of implementing eligible resilience measures that achieve the objectives of Section
40101(d), grant funding may be used to issue subawards to eligible entities. Eligible entities include:
an electric grid operator;a)
an electricity storage operator;b)
an electricity generator;c)
a transmission owner or operator;d)
a distribution provider;e)
a fuel supplier, andf)
any other relevant entity, as determined by the Secretary (of DOE).g)
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64650
Page 2 Released December 15, 2022
Alaska Energy Authority - Electric Vehicle Charging
Equipment Deployment - IIJA Competitive
FY2024 Request:
Reference No:
$1,670,000
64644
AP/AL: Appropriation Project Type: Energy
Category: Development
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W. Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
The Alaska Energy Authority (AEA) is applying for federal Infrastructure Investment and Jobs Act
(IIJA) funding for Community-Driven Electric Vehicle Charging Deployment in Underserved
Communities. The goals of this project are to increase access to vehicle electrification in multiple rural
and underserved communities across Alaska; demonstrate the value of electric vehicles (EVs) to key
decision makers and the wider public to accelerate the transition to clean transportation; and support
the development of community charging equipment. A 20 percent match is required, shared by AEA
and project partners.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1002 Fed
Rcpts
$1,670,000 $1,670,000
Total:$1,670,000 $0 $0 $0 $0 $0 $1,670,000
State Match Required One-Time Project Phased - new Phased - underway Ongoing
0% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
The IIJA funding opportunity is through the Office of Energy Efficiency and Renewable Energy
(EERE) Vehicle Technologies Office Program Wide Funding Opportunity Area of Interest (AOI) 9.
This request is for federal funding only. Required match will be met through AEA and project partners.
Project Description/Justification:
The Alaska Energy Authority (AEA), as the prime applicant, will work with project partners to support
vehicle electrification in rural, low-income, and Tribal communities across the state. The partnerships
forged through this project will provide underserved communities with resources and access to EV
education and technical support to ensure a more equitable transition to clean transportation. The
data and partner experiences developed through this project will be used in a public education and
outreach campaign to encourage EV adoption.
Alaska has one of the most undeveloped EV markets in the United States and some of the highest
transportation-related costs. Its expansive geography, isolated small population, and cold
environment amplify the traditional challenges for EV adoption. Most Alaskans do not have
reasonable access to EV charging infrastructure to help increase market adoption. As of August 2022,
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64644
Page 1 Released December 15, 2022
Alaska Energy Authority - Electric Vehicle Charging
Equipment Deployment - IIJA Competitive
FY2024 Request:
Reference No:
$1,670,000
64644
Alaska’s average rural electricity rate was six times higher than the national average, and second
highest in the country, according to the U.S. Energy Information Administration. The transportation
sector accounts for approximately 26.8 percent of the state’s energy use, and the costs associated
with transportation and energy vary significantly across urban and rural Alaska.
The AEA submitted the Alaska National Electric Vehicle Infrastructure (NEVI) Implementation Plan to
the federal Joint Office of Energy and Transportation to capture funds for Direct Current Fast
Charging (DCFC) on Alaska’s road system. This investment, along with those planned by utilities and
municipalities, will begin to provide the fundamental infrastructure for the transition to clean
transportation.
The project includes activities and investment in 11 energy regions that are connected by the theme
of improving equitable access to Electric Vehicle Supply Equipment (EVSE) within the state of Alaska.
The AEA will work closely with partners to maximize public benefit by offering a competitive grant
opportunity with targeted outreach for each energy region, similar to the Alaska NEVI Plan, to deploy
Level 2 and DCFC in rural and underserved communities. Approximately four Level 2 charging
stations in each of the 11 energy regions will be installed for a total of 44 charging stations.
Construction, shipping, and maintenance costs can be double that of an urban location.
The team will draft and finalize an EV charger deployment plan specific to rural and underserved
communities, including community input on how to best site EVSE. This will help provide
benchmarking data to fully understand and track the impact of the financial investment on the market.
The AEA will prioritize locations that utilize local workforce for EVSE installation and maintenance, as
well as communities with renewable energy resources to reduce transportation related emissions. The
project team will solicit feedback from communities on how to best site EV chargers to provide the
maximum public benefit. By deploying community-based charging through this effort, we can
demonstrate and measure usage by community members and visitors. Building from the existing EV
Public Involvement Plan, AEA will coordinate a robust campaign for public education and outreach
about successes and lessons learned from the project.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64644
Page 2 Released December 15, 2022
Alaska Energy Authority - New Energy Auditor Training
IIJA
FY2024 Request:
Reference No:
$63,600
64640
AP/AL: Appropriation Project Type: Energy
Category: To be determined
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
The Infrastructure Investment and Jobs Act (IIJA) includes funding through the State Energy Program
(SEP). Grants are for training individuals to conduct energy audits or surveys of commercial and
residential buildings. The Alaska Energy Authority (AEA) is the designated State Energy Office and
recipient of these funds. No state match is required for this funding. The federal funding allocation to
states is subject to formula calculation. This request is for year two of a five-year annual funding
allocation.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1002 Fed
Rcpts
$63,600 $63,600 $63,600 $63,600 $254,400
Total:$63,600 $63,600 $63,600 $63,600 $0 $0 $254,400
State Match Required One-Time Project Phased - new Phased - underway Ongoing
0% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Sec11 Ch11 SLA2022 P87 L7 HB281 $63,600
Project Description/Justification:
The Energy Auditor Training Grant Program provides grants to eligible states to train individuals to
conduct energy audits or surveys of commercial and residential buildings to build the clean energy
workforce, save customers money on their energy bills, and reduce pollution from building energy
use.
Eligible uses of the fund are 1) to cover any cost associated with individuals being trained or certified
to conduct energy audits by i) the state; or ii) a state-certified third-party training program; and 2) to
pay the wages of a trainee during the period in which the trainee receives training and certification.
The AEA anticipates coordinating with Alaska Housing Finance Corporation (AHFC) in the
administration of the training program funds.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64640
Page 1 Released December 15, 2022
AEA Resolution No. 2023-01 FY23 Operating Budget & Capital Budget
ALASKA ENERGY AUTHORITY
RESOLUTION NO. 2023-01
RESOLUTION OF THE ALASKA ENERGY AUTHORITY
RATIFYING GOVERNORS SUBMISSION OF FY24
OPERATING BUDGET & CAPITAL BUDGET
WHEREAS, the operating and capital budget of the Alaska Energy Authority (“the
Authority”) are subject to the Executive Budget Act;
WHEREAS, the FY24 operating and capital budget submissions for the Authority are
included in the Governor’s State operating and capital budget submissions to the Alaska State
Legislature (“the Legislature”) and are set out in Attachment A;
WHEREAS, the Governor’s State operating and capital budget submissions, including the
Authority’s operating and capital budget submissions, are subject to appropriation by the
Legislature; and
WHEREAS, the Board provides oversight for the Authority and its finances.
NOW, THEREFORE, BE IT RESOLVED BY THE ALASKA ENERGY
AUTHORITY AS FOLLOWS:
Section 1. The Authority’s FY24 operating and capital budget submissions are ratified
by the Board. The final FY24 operating and capital budget are subject to approval and
appropriation by the Legislature.
Dated at Anchorage, Alaska, this 18th day of January 2023.
____________________________________
J. Dana Pruhs, Chair
______________________________________ [SEAL]
Curtis W. Thayer, Secretary
Attachment A
Alaska Energy Authority Operating Budget
FY23 $ 41,225.900
FY24 (proposed) $ 58,120,700
Alaska Energy Authority - Capital Budget
Federal State Other Total
FY22 $ 25,000,000 $ 15,450,973 $ 40,450,973
FY23 $ 41,024,363 $ 38,583,158 $ 400,000 $ 80,007,521
FY24 (proposed) $ 46,344,123 $ 28,016,579 $ 74,360,702
Alaska Energy Authority
AEA
Receipts
Federal
Receipts
General
Fund I/A Receipts CIP Receipts Power
Project Fund
Statutory
Designated
PCE
Endowment
GF Program
Receipts
Designated
Renewable
Energy Fund
FY23 (Authorized)781.3 1,208.6 852.2 124.3 2,570.1 996.4 150.0 736.8 50.0 1,401.2
FY24 (Proposed)781.3 1,208.6 1,215.3 124.3 3,528.1 996.4 150.0 970.7 50.0 1,401.2
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
4,000.0
$$$ in Thousands (000's)Alaska Energy Authority Operating Budget
FY23 (authorized) vs. FY24 (proposed)
FY23 (Authorized)FY24 (Proposed)
**PCE FY23 = $32,355.0
PCE FY24 = $47,678.8
**
Alaska Energy Authority
AEA Receipts, $781.3 , 8%
Federal Receipts, $1,208.6 ,
12%
General Fund, $1,215.3 ,
12%
I/A Receipts, $124.3 , 1%
CIP Receipts, $3,528.1 ,
34%
Power Project Fund, $996.4
, 10%
Statutory Designated,
$150.0 , 1%
PCE Endowment, $970.7 ,
9%
GF Program Receipts Designated,
$50.0 , 0%
Renewable Energy Fund,
$1,401.2 , 13%
Alaska Energy Authority
FY24 Governor's Proposed Operating Budget
Alaska Energy Authority
7,500,000
5,500,000
13,000,000
7,500,000
5,500,000
13,000,000
7,500,000
5,500,000
13,000,000
5,000,000 5,000,000
4,750,973 4,750,973
15,000,000 15,000,000
5,000,000
5,000,000
200,000 200,000 200,000 200,000
200,000
200,000
2,500,000 2,500,000
400,000
5,000,000
3,000,000 3,000,000
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
Federal State TOTAL Federal State Other Total Federal State Total
FY2022 FY2023 FY2024 Governor's Proposed
Alaska Energy Authority Capital Budget
Compare FY22-FY24 (proposed)
Bulk Fuel Upgrades Rural Power Systems Upgrades Alternative Energy & Energy Efficiency Renewable Energy Fund Grant Program
Electrical Emergencies IIJA Strategic Plan for Railbelt Assets Volkswagen Settlement - Interest
Hydroelectric Development Grants to Names Recipient - GVEA
Alaska Energy Authority
Bulk Fuel Upgrades,
$13,000,000
Rural Power Systems Upgrades,
$32,500,000
Hydroelectric Development,
$5,000,000
IIJA, $15,660,702
Renewable Energy & Efficiency
Programs, $5,000,000
Grants to Names Recipient -GVEA,
$3,000,000
Electrical Emergencies, $200,000
Alaska Energy Authority
FY24 Governor's Proposed Capital Budget -$74,360,702
ALASKA ENERGY AUTHORITY
Governor's Proposed Capital Budget ‐ FY2024
Updated December 19, 2022
Project Name State Funding
Request
Federal
Receipt
Authority
Total Fund Code Brief Summary
Electrical Emergency
Response $ 200,000 $ 200,000 1004 - General
Fund
Critical to rural communities - provides
technical support when an electrical utility
has lost, or will lose the ability to generate
or transmit power. AS42.45.900
Rural Power Systems
Upgrades (state dollars are
matching funds)
$ 7,500,000 $ 25,000,000 $ 32,500,000
1002 - Fed
Receipts /1003
G/F Match
Electric utility systems are part of the
basic infrastructure of rural communities.
New power systems are designed to meet
accepted utility standards for safety,
reliability, and environmental protections.
Bulk Fuel Upgrades (state
dollars are matching funds) $ 5,500,000 $ 7,500,000 $ 13,000,000
1002 - Fed
Receipts / 1003
G/F Match
Bulk fuel tank farm upgrades. Replaces
aging tanks that may be leaking. Adds
capacity to meet community needs. Meets
code compliance standards improving life,
health, and safety of community.
Hydroelectric Development $ 5,000,000 $ - $ 5,000,000 1004 - UGF
Review and study of 2 major hydroelectric
sites: 1) Dixon Diversion and 2) Godwin
Creek.
Renewable Energy &
Efficiency Programs (AEEE) $ 5,000,000 $ - $ 5,000,000 1004 - UGF
Program support and federal match for
AEA's renewable energy & efficiency
programs (biomass, efficiency, EV, energy
storage, geothermal, heat recovery,
hydroelectric, solar, wind and nuclear).
Grants to Named Recipient (AS
37.05.316) Three‐Phase
Power Extensions and
Upgrades to Delta Farm
Region and Co‐op
$ 3,000,000 $ - $ 3,000,000 1004 - UGF
Provides $3 million to GVEA for the
purpose of extending three-phase power
throughout the Delta region to enhance
production, incentivize expansion, and
lower input costs for producers as well as
customers.
IIJA ‐ Statewide Grid
Resilience and Reliability $ 1,816,579 $ 12,110,523 $ 13,927,102
1002 - Fed
Receipts / 1003
G/F Match
IIJA - Section 40101 (d) - formula grant
program to strengthen and modernize
America's power grid against wildfire,
extreme weather, and other natural
disasters. Improve resilience of the
electric grid against disruptive events.
Funding over five years to total over $60M.
IIJA ‐ Electric Vehicle Charging
Equipment Deployment ‐
Competitive
$ - $ 1,670,000 $ 1,670,000 1002 Fed Receipts
IIJA - Competitive application submitted
November 2022. Goals of the project are
to increase access to vehicle electrification
in multiple rural and underserved
communities across Alaska; demonstrate
the value of EV; and support development
of community charging equipment. 20%
match is required - to be shared by Project
Partners and AEA as needed.
IIJA ‐ New Energy Auditor
Training ‐ Formula $ - $ 63,600 $ 63,600 1002 Fed Receipts
Training for energy audits of commercial
and residential buildings. AEA will RSA
with AHFC.
TOTALS $ 28,016,579 $ 46,344,123 $ 74,360,702
Project Name State Funding
Request
Federal
Receipt
Authority
Total Fund Code Brief Summary
IIJA State Energy Program ‐
Formula ‐ 40109 IIJA $ - $ 2,865,930 $ 2,865,930 1002 Fed Receipts
USDOE SEP formula funds to develop and
implement clean energy programs and
projects. Lump sum of $3,661,930 for AEA
less $796,000 federal receipt authorization
received in FY23 = balance requested in
FY24. Application submitted December
2022.
Defense Community
Infrastructure Pilot Program ‐
Black Rapids Training Site in
Delta Junction
$ - $ 12,752,540 $ 12,752,540 1002 Fed Receipts
Extension of an electric power line to the
Black Rapids Training Site. AEA
partnership with GVEA. No state match is
required. GVEA has committed funds to
complete the project.
TOTALS $ ‐ $ 15,618,470 $ 15,618,470
TOTAL ALL $ 28,016,579 $ 61,962,593 $ 89,979,172
FY2024
FY2023 Supplemental Request ‐ Pending Release January 2023
Alaska Energy Authority - Electrical Emergencies Program FY2024 Request:
Reference No:
$200,000
32950
AP/AL: Appropriation Project Type: Energy
Category: Development
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W. Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
The Alaska Energy Authority’s (AEA) Electrical Emergencies Program is critical to rural communities.
Electrical emergencies can result in the loss of communications, lights, refrigeration systems,
washeterias, water and sewer systems, and the use of other basic infrastructure and equipment. The
program contributes to the Department of Commerce, Community, and Economic Development's
mission of promoting a healthy economy and strong communities, as electricity is considered
essential for both community development and economic growth.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1004 Gen
Fund
$200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $1,200,000
Total:$200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $1,200,000
State Match Required One-Time Project Phased - new Phased - underway Ongoing
0% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Sec11 Ch11 SLA2022 P85 L15 HB281 $200,000
Sec11 Ch1 SLA2021 P103 L18 HB69 $200,000
Sec1 Ch19 SLA2018 P2 L20 SB142 $330,000
Sec12 Ch1 SLA2017 P16 L30 SB23 $330,000
Sec27 Ch38 SLA2015 P27 L16 SB26 $330,000
Sec1 Ch18 SLA2014 P3 L6 SB119 $330,000
Sec1 Ch17 SLA2012 P6 L11 SB160 $330,000
Sec4 Ch5 SLA2011 P127 L19 SB46 $330,000
Project Description/Justification:
The Electrical Emergencies Program often involves a life or safety issue and is the last resort for
communities with an electrical emergency. This program provides support when an electric utility has
lost or will lose the ability to generate or transmit power to its customers and the condition is a threat
to life, health, and/or property. Funding provides the current level of technical support through the
Electrical Emergencies Program.
Power outages are expensive and compromise public safety. Some risks include:
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 32950
Page 1 Released December 15, 2022
Alaska Energy Authority - Electrical Emergencies Program FY2024 Request:
Reference No:
$200,000
32950
- Water and sewer systems freezing and bursting
- Fire hazards
- Medical clinics and other public facilities closing
Electrical emergencies may involve power plant failures and/or distribution system failures.
If the Alaska Energy Authority (AEA) is unable to respond, the response to loss of power
emergencies will be redirected to the Department of Military and Veterans Affairs, Division of
Homeland Security and Emergency Management, State Emergency Operations Center
(SEOC).
AEA received $200,000 in the FY2023 budget and anticipates funds will be depleted or nearly
depleted by the beginning of FY2024.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 32950
Page 2 Released December 15, 2022
Alaska Energy Authority - Rural Power Systems Upgrades FY2024 Request:
Reference No:
$32,500,000
52498
AP/AL: Appropriation Project Type: Energy
Category: Development
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W. Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
The Rural Power System Upgrades (RPSU) program invests $35 million in rural communities in
FY2024. Electric utility systems are essential infrastructure in rural communities. New power systems
are designed to meet accepted utility standards for safety, reliability, and environmental protections.
Upgrading rural power generation and distribution systems includes more than the replacement of
entire facilities. As funding availability diminishes, emphasis on maintenance, improvement projects,
training for operations, and planned maintenance have become critical.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1002 Fed
Rcpts
$25,000,000 $25,000,000 $25,000,000 $25,000,000 $25,000,000 $25,000,000
$150,000,000
1003 G/F
Match
$7,500,000 $10,000,000 $10,000,000 $10,000,000 $10,000,000 $10,000,000 $57,500,000
Total:$32,500,000 $35,000,000 $35,000,000 $35,000,000 $35,000,000 $35,000,000 $207,500,000
State Match Required One-Time Project Phased - new Phased - underway Ongoing
20% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Sec11 Ch11 SLA2022 P85 L20 HB281 $20,000,000
Sec8 Ch1 SLA2021 P70 L21 HB69 $17,500,000
Sec5 Ch8 SLA2020 P64 L17 HB205 $17,500,000
Sec1 Ch19 SLA2018 P2 L22 SB142 $21,900,000
Sec1 Ch2 SLA2016 P2 L20 SB138 $1,446,142
Sec18 Ch2 SLA2016 P35 L28 SB138 $1,053,858
Sec1 Ch18 SLA2014 P6 L9 SB119 $5,120,000
Sec1 Ch16 SLA2013 P4 L18 SB18 $10,800,000
Sec1 Ch17 SLA2012 P6 L13 SB160 $13,000,000
Project Description/Justification:
The Alaska Energy Authority (AEA) is working in partnership with the Denali Commission for the
FY2024 work plan to identify projects for funding. The projects preliminarily identified are the following
communities: Red Devil, Karluk, Chalkytsik, and Koyukuk. The AEA and the Denali Commission will
continue to refine project selection and cost estimates.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 52498
Page 1 Released December 15, 2022
Alaska Energy Authority - Rural Power Systems Upgrades FY2024 Request:
Reference No:
$32,500,000
52498
In FY2024 it is anticipated that federal receipt authority will be required for new funding sources such
as USDA High Cost of Energy Grants and others.
State funds are used to leverage federal funds to expand the number of communities served by
this program which advances sustainable, efficient energy infrastructure projects that decrease
energy costs in rural Alaska over the long term.
State matching funds are required for Denali Commission funded construction projects, 20 percent for
distressed communities and 50 percent for non-distressed communities. The distressed community
list is maintained by the Denali Commission.
This program concentrates on power production and delivery, including diesel powerhouse, heat
recovery, and electrical distribution. Efficiency, reliability, safety, and sustainability are primary
drivers throughout the conceptual design, final design, and construction process.
After completion of the project, the rural utility is required to employ a qualified operator to ensure
that the system is properly operated and maintained. The AEA provides training and technical
assistance to assist the community with proper operation of the new facility.
This program began in 1997 and has expanded since FY1999 with federal funding from the Denali
Commission. Since FY2011, any available federal funds for construction projects now require a 20
percent - 50 percent match, depending on whether the community is considered distressed.
The deferred maintenance need for RPSU is estimated at approximately $327 million.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 52498
Page 2 Released December 15, 2022
Alaska Energy Authority - Bulk Fuel Upgrades FY2024 Request:
Reference No:
$13,000,000
49734
AP/AL: Appropriation Project Type: Energy
Category: Development
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W. Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
The Bulk Fuel Upgrades (BFU) program will invest $13 million in rural Alaska in FY2024. The BFU
program upgrades non-compliant bulk fuel tank farms in rural communities. This project reduces the
cost of energy by reducing or eliminating fuel loss from leaks, spills, or catastrophic failure. By
providing enough capacity for current and planned needs, communities may purchase fuel in larger
quantities at a lower cost per gallon. Projects ensure facilities meet code compliance standards
improving life, health, and safety of the community.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1002 Fed
Rcpts
$7,500,000 $7,500,000 $7,500,000 $7,500,000 $7,500,000 $7,500,000 $45,000,000
1003 G/F
Match
$5,500,000 $5,500,000 $5,500,000 $5,500,000 $5,500,000 $5,500,000 $33,000,000
Total:$13,000,000 $13,000,000 $13,000,000 $13,000,000 $13,000,000 $13,000,000 $78,000,000
State Match Required One-Time Project Phased - new Phased - underway Ongoing
20% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Sec11 Ch11 SLA2022 P85 L13 HB281 $13,000,000
Sec8 Ch19 SLA2021 P70 L19 HB69 $13,000,000
Sec1 Ch19 SLA2018 P2 L19 SB142 $17,000,000
Sec1 Ch1 SLA2017 P2 L22 SB23 $2,420,000
Sec1 Ch2 SLA2016 P2 L18 SB138 $1,300,000
Sec1 Ch18 SLA2014 P3 L33 SB119 $7,300,000
Sec1 Ch16 SLA2013 P4 L14 SB18 $6,000,000
Sec1 Ch17 SLA2012 P6 L9 SB160 $7,000,000
Declining funds available for bulk fuel upgrades in rural Alaska means that bulk fuel tanks are not
upgraded timely. As a result, communities are left with aging fuel tanks that may not meet the
capacity needs of the community or are at risk of leaks, contamination, and/or failure. Recent
emphasis has also been put on barge header projects to protect river and ocean side fuel systems.
Project Description/Justification:
This request includes federal receipt authority and state funds for bulk fuel tank farm upgrades.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 49734
Page 1 Released December 15, 2022
Alaska Energy Authority - Bulk Fuel Upgrades FY2024 Request:
Reference No:
$13,000,000
49734
The AEA is working in partnership with the Denali Commission on the FY2024 work plan to
prioritize project selection. The projects preliminarily identified for construction are in the following
communities: Scammon Bay, Ekwok, Shageluk and Birch Creek. The AEA and the Denali
Commission will continue to refine the project selection and cost estimates over the following
months.
State funds are used to leverage federal funds to expand the number of communities served by
this program, which advances sustainable, efficient energy infrastructure projects that decrease
energy costs in rural Alaska.
State matching funds are required for Denali Commission funded construction projects, 20 percent
for distressed communities and 50 percent for non-distressed communities. The distressed
community list is maintained by the Denali Commission.
Most of the rural tank farms have serious deficiencies that typically include:
Inadequate dikes to contain fuel spills
Inadequate foundations, which could cause gradual tank movement and fuel leakage
Improper piping systems and joints, which are the most common source of fuel leaks
Improper siting near wells, beaches, and buildings, or within a flood plain
Tanks that are rusted or damaged beyond repair
Electrical code violations
Inadequate security
The deferred maintenance need for BFU is estimated at approximately $864 million.
Denali Commission has provided $480,000 in funding to AEA to begin an inventory and assessment
of eligible rural bulk fuel facilities per 3 AAC 108.110 (b), (d), and (e). This will be a multi-year effort
and provide accurate information regarding the condition of bulk fuel facilities which will enable the
same benefits realized from the power systems inventory and assessment. In addition to the normal
gathering and assessment of technical data, full three-dimensional (3D) imagery of the bulk fuel
facility will be captured.
The AEA now uses 3D imaging and Geographic Information System (GIS) software to capture
imagery, collect measurements, and process data to create, edit and share 3D renderings of rural
bulk fuel facilities. This will be used for construction management, operator training, and remote
assistance. The 3D platform enables AEA project managers to keep track of key project milestones
and immediately assess project information. The targeted result is accelerated productivity,
decision-making, and cost savings. Additionally, this information will be coordinated with the United
States Coast Guard to improve compliance of the facilities. State matching funds will be required in
future years.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 49734
Page 2 Released December 15, 2022
Alaska Energy Authority - Hydroelectric Development FY2024 Request:
Reference No:
$5,000,000
64648
AP/AL: Appropriation Project Type: Energy
Category: Development
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W. Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
The Bradley Lake Hydroelectric Project (Bradley Lake) has been a low-cost source of electricity for
the Railbelt for more than 30 years. The Alaska Energy Authority (AEA) is currently studying new
project opportunities at Bradley Lake and a new hydroelectric site at Godwin Creek near Seward. The
close distance to Railbelt transmission, water storage, and significant energy makes this project
desirable. Engineering and environmental studies are needed to determine the feasibility of these
potential projects. Optimizing the energy resource potential at Bradley Lake and adding a new Railbelt
hydroelectric project will contribute significant amounts of reliable, low-cost renewable energy into the
Railbelt system.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1004 Gen
Fund
$5,000,000 $5,000,000
Total:$5,000,000 $0 $0 $0 $0 $0 $5,000,000
State Match Required One-Time Project Phased - new Phased - underway Ongoing
0% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Project Description/Justification:
The Bradley Lake Project, completed in 1991, is a 120-megawatt (MW) facility that generates about
10 percent of the total annual power used by Railbelt electric utilities and provides some of the
lowest-cost power to more than 550,000 Alaskans and “electrifies” 54,000 homes. Following the
successful completion of the West Fork Upper Battle Creek Diversion Project in 2020, AEA has
identified two major hydroelectric project opportunities: 1) Dixon Diversion Project, which is part of the
Bradley Project, potentially could electrify an additional 24-30 thousand homes and 2) Godwin Creek
hydroelectric project, near Seward, could potentially electrify an additional 10-20 thousand homes.
The combined potential energy of both Dixon and Godwin projects is estimated to be an additional 6
percent - 8 percent of the renewable energy component of the total Railbelt energy.
The development of one or both projects will provide significant energy to the Railbelt system and
allow other non-firm renewable generation to be developed for long term lower cost energy and lower
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64648
Page 1 Released December 15, 2022
Alaska Energy Authority - Hydroelectric Development FY2024 Request:
Reference No:
$5,000,000
64648
carbon. The funds will be used for engineering studies (feasibility, hydrological, geological) and
environmental studies (fisheries, water quality, geomorphology). Estimates for the preliminary studies
for the Dixon Diversion are $12 million and $1.5 million for Godwin Creek.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64648
Page 2 Released December 15, 2022
Alaska Energy Authority - Renewable Energy and
Efficiency Programs
FY2024 Request:
Reference No:
$5,000,000
64641
AP/AL: Appropriation Project Type: Energy
Category: Development
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W. Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
Develop the Alaska Energy Authority's (AEA) renewable energy & efficiency programs (biomass,
efficiency, electric vehicle, energy storage, geothermal, heat recovery, hydroelectric, solar, wind and
nuclear). These programs grow Alaska’s clean energy economy. These programs provide critical
technical support for communities interested in developing renewable energy and efficiency projects.
Funds are used for reconnaissance level studies and feasibility analysis to help identify project
locations, and technical assistance and support for utilities and communities interested in developing
cost-effective renewable energy and energy efficiency projects. This request leverages federal funds.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1004 Gen
Fund
$5,000,000 $5,000,000
Total:$5,000,000 $0 $0 $0 $0 $0 $5,000,000
State Match Required One-Time Project Phased - new Phased - underway Ongoing
20% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Sec8 Ch1 SLA2021 P70 L16 HB69 $5,000,000
Sec1 Ch16 SLA2013 P4 L11 SB18 $2,000,000
Sec1 Ch17 SLA2012 P6 L3 SB160 $4,800,000
Sec7 Ch43 SLA2010 P20 L24 SB230 $8,000,000
Project Description/Justification:
This request helps AEA leverage funding from federal partners such as, but not limited to, the Denali
Commission, the United States Department of Energy, and the United States Department of
Agriculture. This request is imperative for the continued development of renewable energy fields
specific to Alaska. Federal funds typically require a 20 percent state match.
The work conducted with these funds strongly supports the success of the Renewable Energy Fund
and supports achieving the 50 percent renewable energy goal as well as the 25 percent reduction in
energy usage through efficiency measures.
In addition to providing a “pipeline” of qualified projects to advance towards construction, such as the
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64641
Page 1 Released December 15, 2022
Alaska Energy Authority - Renewable Energy and
Efficiency Programs
FY2024 Request:
Reference No:
$5,000,000
64641
Renewable Energy Grant Fund program and the Power Project Fund, this program removes barriers
and solves problems in each of the different renewable energy technology types. Each program area
works on statewide resource assessments, regulatory and permitting issues, outreach, and stakeholder
involvement in order to advance cost-effective renewable energy in Alaska. The programs provide a
foundation of support critical to the proper development of renewable energy technologies in Alaska.
Each of the renewable technology areas and efficiency have a working group facilitated by AEA that
supports the proper application of their technology in both urban and rural communities in the state.
These general funds will support the continuation of these programs.
The technology programs include the following focuses and projects:
Biomass: The AEA’s biomass energy program focuses on exploring opportunities to increase
utilization of wood for energy production throughout the state. The program provides technical
assistance, project management, and funding to develop wood-fired systems that displace fuel oil for
heating public facilities.
Efficiency: The AEA’s energy efficiency program focuses on rural community outreach and education,
public buildings, commercial buildings, and public infrastructure such as street lighting and water &
sewer infrastructure. AEA’s core efficiency program efforts are focused on two primary goals: 1)
achieving the most cost-effective energy efficiency gain, and 2) providing services where energy costs
are critically high.
Electric Vehicle: The transportation sector is rapidly transitioning to electric vehicles (EVs). These
vehicles and their charging infrastructure can bring new industries to Alaska, helping to promote the
state economy and save Alaskans money. Alaskans have identified barriers to adoption such as range
anxiety and performance in cold climates. The AEA has a mission to lead the effort to minimize barriers
that inhibit EV adoption in Alaska and will continue to seek other federal opportunities (IIJA) to help
support advancement of this program.
Energy Storage: Energy storage allows for energy from non-firm generation sources such as wind or
base load thermal generation sources such as natural gas or coal to be stored for later use. The stored
energy is used during periods of high electrical demand to avoid turning on additional generation units
or to provide energy when the non-firm source is not generating. Energy storage can be accomplished
through the use of several different technologies such as, but not limited to, battery energy storage
systems (BESS), water storage, pumped hydro, flywheels, and compressed air. Battery storage can be
used in many different ways but typically it is to peak shave, support system stability, or prevent
blackouts.
Geothermal: Alaska has 141 volcanoes and over 100 hot springs. Many of these have the potential for
providing energy for agriculture, space heating and other power generation purposes.
Heat Recovery and CHP: Combined heat and power (CHP) project development activities, including
“waste” heat recovery, are supported through a U.S. Department of Energy (DOE) cost-share program
for technical assistance and project development.
Hydroelectric: The hydroelectric program focuses on improving efficiency and quality in hydroelectric
development, lowering the cost of construction, and coordinating with state, federal, municipalities,
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64641
Page 2 Released December 15, 2022
Alaska Energy Authority - Renewable Energy and
Efficiency Programs
FY2024 Request:
Reference No:
$5,000,000
64641
tribal entities, and private investors in analyzing, planning, and generally assisting hydroelectric project
development.
Solar: The AEA provides solar energy information, resources, and technical assistance. The Power
Project Fund and the Renewable Energy Fund have provided grant and loan financing for several EV
projects on the Railbelt and in rural Alaska.
Wind: Since 2012, Alaska’s wind energy capacity has increased 400 percent. This growth is supported
by AEA’s Renewable Energy Fund and information sharing among wind energy producers and
stakeholders. In partnership with the Wind Working Group, AEA facilitates annual educational events
including the wind-diesel and energy storage workshops. The AEA assists communities in evaluating
wind energy and often aids in rural community decision-making.
Nuclear: The AEA’s work in nuclear energy includes general program management, assisting with the
Nuclear Roadmap Development, stakeholder engagement, and working with partners like the Alaska
Center of Energy and Power.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64641
Page 3 Released December 15, 2022
Three-Phase Power Extensions and Upgrades to Delta
Farm Region and Co-Op
FY2024 Request:
Reference No:
$3,000,000
64822
AP/AL: Appropriation Project Type: Energy
Category: Development Recipient: Golden Valley Electric Association
Location: Delta Junction House District: Richardson Hwy/East Mat-Su
(HD 9)
Impact House District: Richardson Hwy/East
Mat-Su (HD 9)
Contact: Micaela Fowler
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)465-2506
Brief Summary and Statement of Need:
This appropriation provides a $3 million grant to the Golden Valley Electric Association for the
purpose of extending three-phase power throughout the Delta region to enhance production,
incentivize expansion, and lower input costs for producers as well as customers.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1004 Gen
Fund
$3,000,000 $3,000,000
Total:$3,000,000 $0 $0 $0 $0 $0 $3,000,000
State Match Required One-Time Project Phased - new Phased - underway Ongoing
0% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Project Description/Justification:
To further food security objectives in Alaska, priorities in the near term will focus on enhancing
existing production and incentivizing expansion. Many farms in the Delta region either lack
three-phase power or are off the power grid entirely.
The Delta Co-Op is currently served by single phase power but must use a diesel-powered
three-phase generator to operate its grain dryer at a dramatically higher cost. By extending
three-phase power to the remaining farms that lack three-phase service, along with the Co-Op, this
extension and upgrade will lower input costs for producers, prices for their customers, and potentially
facilitate expanded use of irrigation and drying equipment.
This project is in Golden Valley Electric Association’s service area and the estimated cost is $3 million
to extend and/or upgrade service to the Co-Op, Saw Mill Road, and Cummings Road. Because the
Co-Op serves the entire region, expansion of three-phase service will be prioritized for this location.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64822
Page 1 Released December 15, 2022
Alaska Energy Authority - Statewide Grid Resilience and
Reliability - IIJA Formula
FY2024 Request:
Reference No:
$13,927,102
64650
AP/AL: Appropriation Project Type: Energy
Category: Development
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W. Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
In support of the Infrastructure Investment and Jobs Act (IIJA) and the Building a Better Grid Initiative,
the Department of Energy (DOE) developed a $2.3 billion formula grant program to strengthen and
modernize America’s power grid against wildfires, extreme weather, and other natural disasters.
Section 40101 (d) of the IIJA established a formula grant program (Program) providing $459 million
annually over a period of five years to states (and Indian Tribes) to improve the resilience of the
electric grid against disruptive events. The DOE’s allocation of funds to the State of Alaska under IIJA
40101(d) is $12,110,523 annually for five years.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1002 Fed
Rcpts
$12,110,523 $12,110,523 $12,110,523 $12,110,523 $48,442,092
1003 G/F
Match
$1,816,579 $1,816,579 $1,816,579 $5,449,737
Total:$13,927,102 $13,927,102 $13,927,102 $12,110,523 $0 $0 $53,891,829
State Match Required One-Time Project Phased - new Phased - underway Ongoing
0% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Sec11 Ch11 SLA2022 P85 L10 HB281 $12,110,523
Sec35 Ch11 SLA2022 P144 L1 HB281 $3,633,158
Formula-based funding requires a 15 percent state match and a 33 percent small utility match.
Project Description/Justification:
The Alaska Energy Authority (AEA) is the sole state entity for the state of Alaska to apply for,
receive, and administer the IIJA Section 40101(d) federal funds. This request is for the State
allocation only and does not include funds allocated to Tribes.
The objective of this program is to improve the resilience of the electric grid against disruptive
events. Per IIJA section 40101(a)(1), a disruptive event is “an event in which operations of the
electric grid are disrupted, preventively shut off, or cannot operate safely due to extreme weather,
wildfire, or a natural disaster.” To achieve this objective, funding provided by DOE under the program
may be used to implement a wide range of resilience measures intended to mitigate the impact of
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64650
Page 1 Released December 15, 2022
Alaska Energy Authority - Statewide Grid Resilience and
Reliability - IIJA Formula
FY2024 Request:
Reference No:
$13,927,102
64650
disruptive events, including:
weatherization technologies and equipment;a)
fire-resistant technologies and fire prevention systems;b)
monitoring and control technologies;c)
the undergrounding of electrical equipment;d)
utility pole management;e)
the relocation of power lines or the reconductoring of power lines with low-sag, advancedf)
conductors;
vegetation and fuel-load management;g)
the use or construction of distributed energy resources for enhancing system adaptive capacityh)
during disruptive events, including:
microgrids; anda.
battery-storage subcomponents;b.
adaptive protection technologies;i)
advanced modeling technologies;j)
hardening of power lines, facilities, substations, of other systems; andk)
the replacement of old overhead conductors and underground cables.l)
Funding may also be used for the training, recruitment, retention, and retraining of skilled and properly
credentialed workers in order to perform the work required for the resilience measures listed above.
Resilience measures that are not allowed under Section 40101(d) include:
Construction of a new-1.
Electric generating facility; ora.
Large-scale battery-storage facility that is not used for enhancing system adaptive capacityb.
during disruptive events; or
Cybersecurity.2.
For the purpose of implementing eligible resilience measures that achieve the objectives of Section
40101(d), grant funding may be used to issue subawards to eligible entities. Eligible entities include:
an electric grid operator;a)
an electricity storage operator;b)
an electricity generator;c)
a transmission owner or operator;d)
a distribution provider;e)
a fuel supplier, andf)
any other relevant entity, as determined by the Secretary (of DOE).g)
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64650
Page 2 Released December 15, 2022
Alaska Energy Authority - Electric Vehicle Charging
Equipment Deployment - IIJA Competitive
FY2024 Request:
Reference No:
$1,670,000
64644
AP/AL: Appropriation Project Type: Energy
Category: Development
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W. Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
The Alaska Energy Authority (AEA) is applying for federal Infrastructure Investment and Jobs Act
(IIJA) funding for Community-Driven Electric Vehicle Charging Deployment in Underserved
Communities. The goals of this project are to increase access to vehicle electrification in multiple rural
and underserved communities across Alaska; demonstrate the value of electric vehicles (EVs) to key
decision makers and the wider public to accelerate the transition to clean transportation; and support
the development of community charging equipment. A 20 percent match is required, shared by AEA
and project partners.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1002 Fed
Rcpts
$1,670,000 $1,670,000
Total:$1,670,000 $0 $0 $0 $0 $0 $1,670,000
State Match Required One-Time Project Phased - new Phased - underway Ongoing
0% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
The IIJA funding opportunity is through the Office of Energy Efficiency and Renewable Energy
(EERE) Vehicle Technologies Office Program Wide Funding Opportunity Area of Interest (AOI) 9.
This request is for federal funding only. Required match will be met through AEA and project partners.
Project Description/Justification:
The Alaska Energy Authority (AEA), as the prime applicant, will work with project partners to support
vehicle electrification in rural, low-income, and Tribal communities across the state. The partnerships
forged through this project will provide underserved communities with resources and access to EV
education and technical support to ensure a more equitable transition to clean transportation. The
data and partner experiences developed through this project will be used in a public education and
outreach campaign to encourage EV adoption.
Alaska has one of the most undeveloped EV markets in the United States and some of the highest
transportation-related costs. Its expansive geography, isolated small population, and cold
environment amplify the traditional challenges for EV adoption. Most Alaskans do not have
reasonable access to EV charging infrastructure to help increase market adoption. As of August 2022,
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64644
Page 1 Released December 15, 2022
Alaska Energy Authority - Electric Vehicle Charging
Equipment Deployment - IIJA Competitive
FY2024 Request:
Reference No:
$1,670,000
64644
Alaska’s average rural electricity rate was six times higher than the national average, and second
highest in the country, according to the U.S. Energy Information Administration. The transportation
sector accounts for approximately 26.8 percent of the state’s energy use, and the costs associated
with transportation and energy vary significantly across urban and rural Alaska.
The AEA submitted the Alaska National Electric Vehicle Infrastructure (NEVI) Implementation Plan to
the federal Joint Office of Energy and Transportation to capture funds for Direct Current Fast
Charging (DCFC) on Alaska’s road system. This investment, along with those planned by utilities and
municipalities, will begin to provide the fundamental infrastructure for the transition to clean
transportation.
The project includes activities and investment in 11 energy regions that are connected by the theme
of improving equitable access to Electric Vehicle Supply Equipment (EVSE) within the state of Alaska.
The AEA will work closely with partners to maximize public benefit by offering a competitive grant
opportunity with targeted outreach for each energy region, similar to the Alaska NEVI Plan, to deploy
Level 2 and DCFC in rural and underserved communities. Approximately four Level 2 charging
stations in each of the 11 energy regions will be installed for a total of 44 charging stations.
Construction, shipping, and maintenance costs can be double that of an urban location.
The team will draft and finalize an EV charger deployment plan specific to rural and underserved
communities, including community input on how to best site EVSE. This will help provide
benchmarking data to fully understand and track the impact of the financial investment on the market.
The AEA will prioritize locations that utilize local workforce for EVSE installation and maintenance, as
well as communities with renewable energy resources to reduce transportation related emissions. The
project team will solicit feedback from communities on how to best site EV chargers to provide the
maximum public benefit. By deploying community-based charging through this effort, we can
demonstrate and measure usage by community members and visitors. Building from the existing EV
Public Involvement Plan, AEA will coordinate a robust campaign for public education and outreach
about successes and lessons learned from the project.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64644
Page 2 Released December 15, 2022
Alaska Energy Authority - New Energy Auditor Training
IIJA
FY2024 Request:
Reference No:
$63,600
64640
AP/AL: Appropriation Project Type: Energy
Category: To be determined
Location: Statewide House District: Statewide (HD 1-40)
Impact House District: Statewide (HD 1-40)Contact: Curtis W Thayer
Estimated Project Dates: 07/01/2023 - 06/30/2028 Contact Phone: (907)771-3000
Brief Summary and Statement of Need:
The Infrastructure Investment and Jobs Act (IIJA) includes funding through the State Energy Program
(SEP). Grants are for training individuals to conduct energy audits or surveys of commercial and
residential buildings. The Alaska Energy Authority (AEA) is the designated State Energy Office and
recipient of these funds. No state match is required for this funding. The federal funding allocation to
states is subject to formula calculation. This request is for year two of a five-year annual funding
allocation.
Funding:FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Total
1002 Fed
Rcpts
$63,600 $63,600 $63,600 $63,600 $254,400
Total:$63,600 $63,600 $63,600 $63,600 $0 $0 $254,400
State Match Required One-Time Project Phased - new Phased - underway Ongoing
0% = Minimum State Match % Required Amendment Mental Health Bill
Operating & Maintenance Costs:Amount Staff
Project Development: 0 0
Ongoing Operating: 0 0
One-Time Startup:0
Totals: 0 0
Prior Funding History / Additional Information:
Sec11 Ch11 SLA2022 P87 L7 HB281 $63,600
Project Description/Justification:
The Energy Auditor Training Grant Program provides grants to eligible states to train individuals to
conduct energy audits or surveys of commercial and residential buildings to build the clean energy
workforce, save customers money on their energy bills, and reduce pollution from building energy
use.
Eligible uses of the fund are 1) to cover any cost associated with individuals being trained or certified
to conduct energy audits by i) the state; or ii) a state-certified third-party training program; and 2) to
pay the wages of a trainee during the period in which the trainee receives training and certification.
The AEA anticipates coordinating with Alaska Housing Finance Corporation (AHFC) in the
administration of the training program funds.
State of Alaska Capital Project Summary Department of Commerce, Community, and Economic Development
FY2024 Governor Reference No: 64640
Page 1 Released December 15, 2022
107 Spring Street | Seattle, WA, 98104 | (206) 264-8900
December 7, 2022
Curtis Thayer, Executive Director
Alaska Energy Authority
813 W. Northern Lights Blvd
Anchorage, AK 99503
Re: AEA Bradley Lake Hydroelectric Project Series 11 Bonds
Curtis,
This memorandum summarizes the final terms agreed to between Alaska Energy Authority (“AEA”)
and National Cooperative Services Corporation (“NCSC”) to fund work on the Bradley Lake
Hydroelectric Project. These terms have been fully incorporated in the Loan Agreement prepared
by Orrick Herrington & Sutcliffe who is serving as bond counsel to AEA. The Loan Agreement is the
final document specifying terms and conditions of the loan and has been fully executed by AEA and
NCSC.
Basis Terms
• The loan Initial Advance would be drawn on November 30, 2022, in the amount of
$166,013,134.
• The Initial Fixed Rate Term will extend through December 30, 2032.
• Final loan maturity will be June 30, 2050.
• Loan debt service will be structured to maximize loan capacity without exceeding AEA fiscal
year Excess Payments amounts which are adjusted to reflect the final net amount of existing
annual debt service of the Bradley Lake Series 10 Bonds.
• Debt service payment dates are semiannual principal and interest on each June 30 and
December 30, commencing December 30, 2022.
Interest Rate & Loan Capacity
• Interest rate for the Initial Fixed Rate Term is 6.06% which rate was locked by agreement
executed on November 3, 2022.
• Final debt service for the Initial Fixed Rate Term is provided in Appendix A to this
memorandum.
• At the end of the Initial Fixed Rate Term, a new fixed rate would be negotiated with NCSC on
the Interest Rate Reset Date.
Options
• AEA will have the option at any Interest Rate Reset Date of selecting a new rate period with
interest rate negotiated based on such period. AEA may select multiple new Fixed Rate
Terms up to the final loan maturity of June 30, 2050.
• AEA will also have the option of increasing the loan amount at any future Interest Rate
Reset Date if such new Fixed Rate Term and interest rate provides additional capacity within
the Excess Payments limitations. Any increased loan amount will be limited to total loan
draws of not to exceed $200,000,000.
• AEA would have the option at any Interest Rate Reset Date to refinance the remaining loan
with another lender or funding source at no redemption premium other than accrued
interest owed to the date of redemption.
Other Key Loan Factors
• NCSC retains a Make Whole Call feature during the Initial Fixed Rate Term and should
unusual circumstances warrant non-economic redemption during this period AEA may do
so. However, the negotiation of a 10-year Initial Fixed Rate Term and ability to redeem
bonds with no penalty at that point or negotiate a new fixed rate term and rate provides
AEA with the equivalent of a standard 10-year par call feature and a low-cost option for
extending the loan term at favorable rates.
• AEA was successful in negotiating away a requirement for loan acceleration in the event of
default.
• AEA was successful in negotiating elimination of certain proposed definitions of debt service
and debt service coverage which could have resulted in inclusion of all future AEA debt
including project debt not related to the Bradley Lake Project.
PFM Financial Advisors LLC has been privileged to work with AEA on this financing.
Regards,
Fred Eoff
Director
PFM Financial Advisors LLC
Alaska Energy Authority APPENDIX A
Bradley Lake Hydroelectric Project
Power Revenue Bonds, Series 11
Debt Service Schedule
Date Principal Coupon Interest Total P+I Fiscal Total
11/30/2022 -----
12/30/2022 5,167,797.00 6.060%838,366.33 6,006,163.33 -
06/30/2023 1,132,550.00 6.060%4,873,613.71 6,006,163.71 12,012,327.04
12/30/2023 1,166,598.00 6.060%4,839,297.45 6,005,895.45 -
06/30/2024 1,201,945.00 6.060%4,803,949.53 6,005,894.53 12,011,789.98
12/30/2024 1,238,634.00 6.060%4,767,530.59 6,006,164.59 -
06/30/2025 1,276,163.00 6.060%4,729,999.98 6,006,162.98 12,012,327.57
12/30/2025 1,314,831.00 6.060%4,691,332.24 6,006,163.24 -
06/30/2026 1,354,671.00 6.060%4,651,492.86 6,006,163.86 12,012,327.10
12/30/2026 1,395,718.00 6.060%4,610,446.33 6,006,164.33 -
06/30/2027 1,438,007.00 6.060%4,568,156.08 6,006,163.08 12,012,327.41
12/30/2027 1,481,361.00 6.060%4,524,584.47 6,005,945.47 -
06/30/2028 1,526,246.00 6.060%4,479,699.23 6,005,945.23 12,011,890.70
12/30/2028 1,572,710.00 6.060%4,433,453.97 6,006,163.97 -
06/30/2029 1,620,363.00 6.060%4,385,800.86 6,006,163.86 12,012,327.83
12/30/2029 1,669,460.00 6.060%4,336,703.86 6,006,163.86 -
06/30/2030 1,720,044.00 6.060%4,286,119.22 6,006,163.22 12,012,327.08
12/30/2030 1,772,162.00 6.060%4,234,001.89 6,006,163.89 -
06/30/2031 1,825,858.00 6.060%4,180,305.38 6,006,163.38 12,012,327.27
12/30/2031 1,881,021.00 6.060%4,124,981.88 6,006,002.88 -
06/30/2032 1,938,015.00 6.060%4,067,986.95 6,006,001.95 12,012,004.83
12/30/2032 1,996,899.00 6.060%4,009,265.09 6,006,164.09 -
- End of Initial Rate Term -
06/30/2033 2,057,404.00 6.060%3,948,759.05 6,006,163.05 12,012,327.14
12/30/2033 2,119,744.00 6.060%3,886,419.71 6,006,163.71 -
06/30/2034 2,183,972.00 6.060%3,822,191.47 6,006,163.47 12,012,327.18
12/30/2034 2,250,147.00 6.060%3,756,017.12 6,006,164.12 -
06/30/2035 2,318,326.00 6.060%3,687,837.66 6,006,163.66 12,012,327.78
12/30/2035 2,388,476.00 6.060%3,617,592.39 6,006,068.39 -
06/30/2036 2,460,846.00 6.060%3,545,221.56 6,006,067.56 12,012,135.95
12/30/2036 2,535,506.00 6.060%3,470,657.93 6,006,163.93 -
06/30/2037 2,612,331.00 6.060%3,393,832.10 6,006,163.10 12,012,327.03
12/30/2037 2,691,486.00 6.060%3,314,678.47 6,006,164.47 -
06/30/2038 2,773,037.00 6.060%3,233,126.44 6,006,163.44 12,012,327.91
12/30/2038 2,857,061.00 6.060%3,149,103.42 6,006,164.42 -
06/30/2039 2,943,629.00 6.060%3,062,534.47 6,006,163.47 12,012,327.89
12/30/2039 3,032,801.00 6.060%2,973,342.51 6,006,143.51 -
06/30/2040 3,124,694.00 6.060%2,881,448.64 6,006,142.64 12,012,286.15
12/30/2040 3,223,141.00 6.060%2,786,770.42 6,009,911.42 -
06/30/2041 3,320,801.00 6.060%2,689,109.24 6,009,910.24 12,019,821.66
12/30/2041 3,638,684.00 6.060%2,588,488.97 6,227,172.97 -
06/30/2042 3,748,936.00 6.060%2,478,236.85 6,227,172.85 12,454,345.82
12/30/2042 3,862,529.00 6.060%2,364,644.09 6,227,173.09 -
06/30/2043 3,979,563.00 6.060%2,247,609.46 6,227,172.46 12,454,345.55
12/30/2043 4,100,144.00 6.060%2,127,028.70 6,227,172.70 -
Page 1
Alaska Energy Authority
Bradley Lake Hydroelectric Project
Power Revenue Bonds, Series 11
Debt Service Schedule
Date Principal Coupon Interest Total P+I Fiscal Total
06/30/2044 4,224,378.00 6.060%2,002,794.34 6,227,172.34 12,454,345.04
12/30/2044 4,352,377.00 6.060%1,874,795.68 6,227,172.68 -
06/30/2045 4,484,254.00 6.060%1,742,918.66 6,227,172.66 12,454,345.34
12/30/2045 4,620,127.00 6.060%1,607,045.76 6,227,172.76 -
06/30/2046 4,760,117.00 6.060%1,467,055.92 6,227,172.92 12,454,345.68
12/30/2046 4,904,349.00 6.060%1,322,824.37 6,227,173.37 -
06/30/2047 5,052,950.00 6.060%1,174,222.60 6,227,172.60 12,454,345.97
12/30/2047 5,206,055.00 6.060%1,021,118.21 6,227,173.21 -
06/30/2048 5,363,798.00 6.060%863,374.74 6,227,172.74 12,454,345.95
12/30/2048 5,526,322.00 6.060%700,851.67 6,227,173.67 -
06/30/2049 5,693,768.00 6.060%533,404.11 6,227,172.11 12,454,345.78
12/30/2049 5,866,290.00 6.060%360,882.94 6,227,172.94 -
06/30/2050 6,044,038.00 6.060%183,134.35 6,227,172.35 12,454,345.29
Total $166,013,134.00 -$174,316,161.92 $340,329,295.92 -
Yield Statistics
Average Life 17.327 Years
Average Coupon 6.0600000%
Net Interest Cost (NIC)6.0600000%
True Interest Cost (TIC)6.0606303%
Capital Reserve Requirement $12,454,345.97
Page 2
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December 22, 2022
To the Board of Directors
Alaska Energy Authority
Anchorage, Alaska
We have audited the financial statements of Alaska Energy Authority as of and for the year ended
June 30, 2022, and have issued our report thereon dated December 22, 2022. Professional standards
require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit under Generally Accepted Auditing
Standards and Government Auditing Standards and our Compliance Audit under the Uniform
Guidance
As communicated in our letter dated October 10, 2022 our responsibility, as described by
professional standards, is to form and express an opinion about whether the financial statements that
have been prepared by management with your oversight are presented fairly, in all material respects,
in accordance with accounting principles generally accepted in the United States of America and to
express an opinion on whether the Alaska Energy Authority complied with the types of compliance
requirements described in the OMB Compliance Supplement that could have a direct and material
effect on each of the Alaska Energy Authority major federal programs. Our audit of the financial
statements and major program compliance does not relieve you or management of its respective
responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain
reasonable, rather than absolute, assurance about whether the financial statements are free of
material misstatement. An audit of financial statements includes consideration of internal control
over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control over financial reporting. Accordingly, as part of our audit, we considered the internal
control of Alaska Energy Authority solely for the purpose of determining our audit procedures and not
to provide any assurance concerning such internal control.
Our responsibility, as prescribed by professional standards as it relates to the audit of Alaska Energy
Authority major federal program compliance, is to express an opinion on the compliance for each of
Alaska Energy Authority major federal programs based on our audit of the types of compliance
requirements referred to above. An audit of major program compliance includes consideration of
internal control over compliance with the types of compliance requirements referred to above as a
basis for designing audit procedures that are appropriate in the circumstances and to test and report
on internal control over compliance in accordance with the Uniform Guidance, but not for the
purpose of expressing an opinion on the effectiveness of internal control over compliance.
Accordingly, as a part of our major program compliance audit, we considered internal control over
compliance for these purposes and not to provide any assurance on the effectiveness of the Alaska
Energy Authority’s internal control over compliance.
We are also responsible for communicating significant matters related to the audit that are, in our
professional judgment, relevant to your responsibilities in overseeing the financial reporting process.
However, we are not required to design procedures for the purpose of identifying other matters to
communicate to you.
We have provided our comments regarding internal controls during our audit in our Independent
Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in Accordance with Government Auditing
Standards dated December 22, 2022. We have also provided our comments regarding compliance
with the types of compliance requirements referred to above and internal controls over compliance
during our audit in our Independent Auditor’s Report on Compliance with Each Major Federal
Program and Report on Internal Control Over Compliance Required by the Uniform Guidance dated
December 22, 2022.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated
to you.
Compliance with All Ethics Requirements Regarding Independence
The engagement team, others in our firm, as appropriate, our firm, and other firms utilized in the
engagement, if applicable, have complied with all relevant ethical requirements regarding
independence.
Qualitative Aspects of the Entity’s Significant Accounting Practices
Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of
the significant accounting policies adopted by Alaska Energy Authority is included in Note 1 to the
financial statements. There have been no initial selection of accounting policies and no changes in
significant accounting policies or their application during 2022. No matters have come to our
attention that would require us, under professional standards, to inform you about (1) the methods
used to account for significant unusual transactions and (2) the effect of significant accounting
policies in controversial or emerging areas for which there is a lack of authoritative guidance or
consensus.
Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and
are based on management’s current judgments. Those judgments are normally based on knowledge
and experience about past and current events and assumptions about future events. Certain
accounting estimates are particularly sensitive because of their significance to the financial
statements and because of the possibility that future events affecting them may differ markedly from
management’s current judgments. No such significant accounting estimate were identified.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive
because of their significance to financial statement users. There were no financial statement
disclosures that we consider to be particularly sensitive or involve significant judgment.
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance
of the audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known
and likely misstatements identified during the audit, other than those that we believe are trivial,
and communicate them to the appropriate level of management. Further, professional standards
require us to also communicate the effect of uncorrected misstatements related to prior periods
on the relevant classes of transactions, account balances or disclosures, and the financial
statements as a whole. Uncorrected misstatements or matters underlying those uncorrected
misstatements could potentially cause future-period financial statements to be materially
misstated, even though the uncorrected misstatements are immaterial to the financial statements
currently under audit. There were no uncorrected or corrected missstatements identified as a
result of our audit procedures.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter,
whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing
matter, which could be significant to the financial statements or the auditor’s report. No such
disagreements arose during the course of the audit.
Circumstances that Affect the Form and Content of the Auditor’s Report
For purposes of this letter, professional standards require that we communicate any circumstances that
affect the form and content of our auditor’s report. We did not identify any circumstances that affect
the form and content of the auditor’s report.
Representations Requested from Management
We have requested certain written representations from management which are included in the
management representation letter dated December 22, 2022.
Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters. Management informed us that, and to our knowledge, there were no consultations
with other accountants regarding auditing and accounting matters.
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with Alaska Energy Authority, we generally discuss a
variety of matters, including the application of accounting principles and auditing standards, significant
events or transactions that occurred during the year, operating conditions affecting the entity, and
operating plans and strategies that may affect the risks of material misstatement. None of the matters
discussed resulted in a condition to our retention as Alaska Energy Authority’s auditors.
This report is intended solely for the information and use of the Board of Directors, and management of
Alaska Energy Authority and is not intended to be, and should not be, used by anyone other than these
specified parties.
Boise, Idaho
eidebailly.com
Financial Statements
June 30, 2022
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Table of Contents
June 30, 2022
Independent Auditor’s Report ................................................................................................................................... 1
Management’s Discussion and Analysis .................................................................................................................... 4
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position ................................................................................................................................... 17
Statement of Activities ......................................................................................................................................... 19
Fund Financial Statements
Balance Sheet – Governmental Funds ................................................................................................................. 20
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ........................ 21
Statement of Net Position – Enterprise Fund ...................................................................................................... 22
Statement of Revenues, Expenses, and Changes in Net Position – Enterprise Fund .......................................... 24
Statement of Cash Flows – Enterprise Fund ........................................................................................................ 25
Notes to Financial Statements ............................................................................................................................. 27
Supplementary Information
Schedule 1 – Bradley Lake Hydroelectric Project Trust Account Activities ......................................................... 46
Schedule 2 – Special Revenue Fund – Projects and Programs – Balance Sheet .................................................. 47
Schedule 3 – Special Revenue Fund – Projects and Programs – Statement of Revenues, Expenses,
and Changes in Fund Balance .............................................................................................................................. 48
Schedule 4 – Business-Type Activities – Enterprise Fund –Projects and Programs – Statement of
Net Position ......................................................................................................................................................... 49
Schedule 5 – Business-Type Activities – Enterprise Fund – Projects and Programs – Statement of
Revenues, Expenses, and Changes in Net Position ............................................................................................. 51
Schedule 6 – Capital Assets Presented under Federal Energy Commission Requirements (Unaudited) ............ 52
Schedule 7 – Bradley Lake Historical Annual Project Cost (Unaudited) .............................................................. 53
Schedule 8 – PCE Endowment Fund Historical Analysis (Unaudited) .................................................................. 54
Schedule 9 – Supplementary Organization and Project Information (Unaudited) .............................................. 55
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1
Independent Auditor’s Report
To the Board of Directors
Alaska Energy Authority
Anchorage, Alaska
Report on the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-
type activities, and each major fund of Alaska Energy Authority (A Component Unit of the State of
Alaska) (the Authority), as of and for the year ended June 30, 2022, and the related notes to the financial
statements, which collectively comprise the Authority’s basic financial statements as listed in the table
of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, and each major
fund of the Authority, as of June 30, 2022, and the respective changes in financial position and, where
applicable, cash flows thereof for the year then ended in accordance with accounting principles
generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America (GAAS) and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are required to be independent of the
Authority, and to meet our other ethical responsibilities, in accordance with the relevant ethical
requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
2
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to
continue as a going concern for twelve months beyond the financial statement date, including any
currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute
assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and
Government Auditing Standards will always detect a material misstatement when it exists. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user based on
the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we
•Exercise professional judgment and maintain professional skepticism throughout the audit.
•Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements.
•Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Authority’s internal control. Accordingly, no such opinion is
expressed.
•Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
•Conclude whether, in our judgment, there are conditions or events, considered in the
•aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern
for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control-related
matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis be presented to supplement the basic financial statements. Such information is
the responsibility of management and, although not a part of the basic financial statements, is required
by the Governmental Accounting Standards Board who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America,
3
which consisted of inquiries of management about the methods of preparing the information and
comparing the information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Authority’s basic financial statements. The Schedules 1 through 5 are
presented for purpose of additional analysis and are not a required part of the basic financial
statements. Such information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial statements.
The information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements
or to the basic financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the Schedules 1
through 5 are fairly stated, in all material respects, in relation to the basic financial statements as a
whole.
Other Information
Management is responsible for the other supplemental information included in the annual report. The
other information comprises the Schedules 6-9 but does not include the basic financial statements and
our auditor's report thereon. Our opinions on the basic financial statements do not cover the other
information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and
the basic financial statements, or the other information otherwise appears to be materially misstated. If,
based on the work performed, we conclude that an uncorrected material misstatement of the other
information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 22,
2022, on our consideration of the Authority’s internal control over financial reporting and on our tests of
its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is solely to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of the Authority’s internal control over financial reporting or on compliance. That report is
an integral part of an audit performed in accordance with Government Auditing Standards in considering
the Authority’s internal control over financial reporting and compliance.
Boise, Idaho
December 22, 2022
4
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Management’s Discussion and Analysis
June 30, 2022
Overview of the Financial Statements
The Alaska Energy Authority (AEA or Authority) is a public corporation of the State of Alaska (State) within the
Department of Commerce, Community and Economic Development (DCCED), but with a separate and
independent legal existence and a separate and self-balancing set of independently audited financial
statements. AEA’s operations consist of governmental fund activities reported as special revenue funds and
business-type activities reported as enterprise funds. The financial information in this report is later reported as
a component of the State and is discreetly presented in the State’s financial statements.
AEA manages the following projects and programs: owned hydroelectric and intertie projects, rural energy
programs, and energy development programs. AEA’s programs are funded primarily by the State, federal grants,
investment income, and utility companies – for use of AEA owned assets. Further information on AEA’s
programs can be found in Note 1 to the financial statements.
Management’s Discussion and Analysis
This section presents management’s discussion and analysis of the financial position and results of operations
for the year ended June 30, 2022. This information is presented to help the reader focus on significant financial
matters and provide additional information regarding the activities of the Authority. This information should be
read in conjunction with the Independent Auditor’s Report, the audited financial statements, and accompanying
notes.
Government-Wide Financial Statements
The government-wide financial statements report information about the overall finances of the Authority similar
to a business enterprise. These statements combine and consolidate short-term spendable resources with
capital assets and long-term obligations.
The government-wide financial statements are divided into the following categories:
•Governmental activities – These are functions of the Authority that are financed primarily by
intergovernmental revenues. AEA’s governmental activities include Power Cost Equalization (PCE)
Program, Renewable Energy Grant Fund, Trans-Alaska Pipeline Liability Fund, Rural Energy Projects,
Volkswagen Diesel Settlement Fund, and the Electric Utility Relief Fund.
•Business-type activities – These are functions of the Authority in which customer user fees and charges are
used to help cover all or most of the cost of services they provide. AEA’s business-type activities include
the Bradley Lake Hydroelectric Project, the Alaska Intertie Project, the Susitna-Watana Hydroelectric
Project, and the Power Project Fund. Included in Bradley Lake Hydroelectric Project is the addition of
Battle Creek which expands the hydroelectric project and the Sterling Substation to Quartz Creek
Substation (SSQ Line) which transmits power to customers.
The Statement of Net Position presents information on all of AEA’s assets and deferred outflows of resources
less liabilities and deferred inflows of resources, which results in net position. This statement is designed to
display the financial position of AEA.
5
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Management’s Discussion and Analysis
June 30, 2022
The Statement of Activities provides information, which shows how the Authority’s net position changed as a
result of the year’s activities. The statement uses the full accrual basis of accounting and the economic resources
measurement focus, which is similar to the accounting used by private-sector businesses. Revenues are
recognized when earned and expenses are recognized when a liability is incurred.
Fund Financial Statements
A fund is a grouping of related accounts used to maintain control over resources that have been segregated for
specific activities or objectives. The funds of the Authority are divided into two categories: governmental fund
and proprietary fund, both of which are further described below, and which provides more detail than the
government-wide statements. AEA uses fund accounting to ensure and demonstrate compliance with finance
related legal requirements.
Governmental Funds – Special Revenue Funds
The Authority reports one governmental fund as a special revenue fund. The special revenue fund is used to
account for activities that are supported primarily by intergovernmental revenues.
Governmental funds are used to account for essentially the same functions reported as governmental activities
in the government-wide financial statements. However, unlike the government-wide financial statements,
governmental fund financial statements focus on the short-term view of AEA’s operations. Because the focus of
governmental funds is narrower than that of the government-wide financial statements, it is useful to compare
the information presented for the government funds with similar information presented for governmental
activities in the government-wide financial statements. These funds are combined on the Governmental Fund
Balance Sheet/Statement of Net Position – Governmental Activities and Governmental Fund Statement of
Revenues, Expenditures and Changes in Fund Balance/Statement of Activities – Governmental Activities.
Propriety Funds – Enterprise Funds
The Authority reports one enterprise fund. The enterprise fund is used to account for activities for which a fee is
charged to external users for goods and services.
The Statement of Net Position reports the Authority’s assets, deferred outflows of resources, liabilities, deferred
inflows of resources, and resulting net position. The net position is reported as net investment in capital assets,
restricted, and unrestricted. Restricted net position is subject to external limits such as bond resolutions, legal
agreements, or statutes. The Statement of Revenues, Expenses, and Changes in Net Position reports the
Authority’s revenues, expenses, and resulting change in net position during the periods reported. Both
statements report on the full accrual basis of accounting and economic resources measurement focus.
The Statement of Cash Flows reports the Authority’s sources and uses of cash and change in cash balance
resulting from the Authority’s activities during periods reported.
6
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Management’s Discussion and Analysis
June 30, 2022
Notes to Basic Financial Statements
The notes provide additional information that is essential to fully understand the amounts reported in the
government-wide and fund financial statements.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain
supplementary information, which provides additional information about AEA’s projects and programs.
Required Components of the Financial Report
Summary Detail
Basic Financial
Statements
(audited)
Required and
Optional*
Supplementary
Information
Government-
wide Financial
Statements
(audited)
Notes to the Financial
Statements (audited)
Fund Financial
Statements
(audited)
Management's
Discussion and
Analysis (audited)
*Optional Supplementary Information:
•Schedule 1: Bradley Lake Hydroelectric Project Trust Account Activities (Unaudited);
•Schedule 2: Special Revenue Fund – Projects and Programs – Balance Sheet (Unaudited);
•Schedule 3: Special Revenue Fund – Projects and Programs – Statement of Revenues, Expenses, and
Changes in Fund Balance (Unaudited);
•Schedule 4: Business-Type Activities – Enterprise Fund – Projects and Programs – Statement of Net
Position (Unaudited);
•Schedule 5: Business-Type Activities – Enterprise Fund – Projects and Programs – Statement of Revenues,
Expenses, and Changes in Net Position (Unaudited);
•Schedule 6: Capital Assets Presented under Federal Energy Regulatory Commission (FERC) Requirements
(Unaudited);
•Schedule 7: Bradley Lake Historical Annual Project Cost (Unaudited);
•Schedule 8: PCE Endowment Fund Historical Analysis (Unaudited); and
•Schedule 9: Supplementary Organization and Project Information (Unaudited).
7
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Management’s Discussion and Analysis
June 30, 2022
Government-Wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In
the case with AEA as a whole, assets and deferred outflows exceeded its liabilities and deferred inflows by $1.4
billion at June 30, 2022 and $1.6 billion at June 30, 2021.
Of the total net position at June 30, 2022, $339.4 million was invested in capital assets, net of related debt, and
$1.0 billion was restricted. Of the total net position at June 30, 2021, $325.6 million was invested in capital
assets, net of related debt, and $1.2 billion was restricted. In both years, invested in capital assets, net of related
debt, is related to the Bradley Lake Hydroelectric Project, Alaska Intertie Project, and Susitna-Watana
Hydroelectric Project. The remainder of net position is considered restricted for debt service or restricted due to
agreements with external parties, and legislation.
The following tables are provided to show AEA’s total assets, deferred outflows of resources, liabilities, and net
position at June 30, 2022 and 2021 (stated in thousands):
2022 2021 Variance 2022 2021 Variance
Assets:
Current and other
noncurrent assets 1,020,376$ 1,194,856$ (174,480)$ 60,821$ 81,565$ (20,744)$
Capital assets - - - 385,307 396,079 (10,772)
Total assets 1,020,376 1,194,856 (174,480) 446,128 477,644 (31,516)
Total assets 1,020,376 1,194,856 (174,480) 446,128 477,644 (31,516)
Liabilities:
Current liabilities 38,110 25,866 12,244 10,141 19,912 (9,771)
Noncurrent liabilities - - - 44,376 57,043 (12,667)
Total liabilities 38,110 25,866 12,244 54,517 76,955 (22,438)
Net Position:
Net investment in
capital assets - - - 339,383 325,614 13,769
Restricted 982,266 1,169,262 (186,996) 52,232 74,804 (22,572)
Unrestricted - - - (4) - (4)
Total net position 982,266 1,169,262 (186,996) 391,611 400,418 (8,807)
Total liabilities and
net position 1,020,376$ 1,195,128$ (174,752)$ 446,128$ 477,373$ (31,245)$
Governmental Activities Business-Type Activities
8
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Management’s Discussion and Analysis
June 30, 2022
Governmental Activities
Current and other noncurrent assets
The following table is provided to show the details of AEA’s current and other noncurrent assets at June 30,
2022 and 2021 (stated in thousands):
2022 2021 Variance
Restricted cash and cash equivalents 35,945$ 28,160$ 7,785$
Restricted investments 978,610 1,161,100 (182,490)
Operating receivables 167 14 153
Due from Federal Government 4,424 3,991 433
Due from State of Alaska 616 1,268 (652)
Due from State of Alaska's component units - 7 (7)
Due (to) from other funds/internal balances 614 316 298
Current and other noncurrent assets 1,020,376$ 1,194,856$ (174,480)$
Current and other noncurrent assets in total are $174.5 million lower in the current fiscal year. Restricted cash
and cash equivalents held by AEA increased by $7.8 million and is associated with unspent advances for State of
Alaska RPSU Capital for $5.8 million and Federal Advances for EURP Grants for $1.9 million. Restricted
investments decreased by $182.5 million, primarily due to unrealized losses in the fiscal year 2022 PCE
Endowment Fund. Amounts due from the federal government increased by $433.0 thousand related to timing of
reimbursement requests submitted and received from federal agencies on federal awards. Due from the State of
Alaska and State of Alaska’s component units decreased by $652.0 thousand. These balances will fluctuate
annually. Due (to) from other funds/internal balances will fluctuate annually depending on program activities
and cash needs. The $298.0 thousand increase is due to timing of fiscal year 2022 related billing and
reimbursement requests.
Total current and noncurrent liabilities increased in this fiscal year by $12.2. The increase is in current liabilities
is primarily due to higher accounts payable at year end.
Net Position
The following table is provided to show details of AEA’s net position at June 30, 2022 and 2021 (stated in
thousands):
2022 2021 Variance
Restricted by agreements with external parties 922$ 1,110$ (188)$
Restricted by legislation 981,344 1,168,152 (186,808)
Net Position 982,266$ 1,169,262$ (186,996)$
9
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Management’s Discussion and Analysis
June 30, 2022
The Governmental Activities Net position decreased by $186.7 million during the current fiscal year. Net position
restricted by agreements with external parties decreased by $188.0 thousand compared to the June 30, 2021
balance due to current year expenditures from the Trans-Alaska Pipeline Liability Fund. Net position restricted
by legislation decreased by $186.8 million primarily due to unrealized investment losses in the PCE Endowment
Fund.
Business-Type Activities
Business-type activities are functions of the Authority in which customer user fees and charges are used to help
cover all or most of the cost of services they provide. AEA’s business-type activities include the Bradley Lake
Hydroelectric Project, the Alaska Intertie Project, the Susitna-Watana Hydroelectric Project, the Power Project
Fund, and the Power Development and Railbelt Energy Projects.
Current and other noncurrent assets
The following table is provided to show the details of the AEA’s current and other noncurrent assets, excluding
capital assets and deferred outflows at June 30, 2022 and 2021 (stated in thousands):
2022 2021 Variance
Restricted cash and cash equivalents 33,950$ 32,351$ 1,599$
Restricted investments - 22,342 (22,342)
Operating receivables 267 206 61
Prepaid expense - 36 (36)
Loans receivable, net of allowance 26,576 25,447 1,129
Due from Federal Government 482 564 (82)
Due from State of Alaska's component units 113 - 113
Accrued interest receivable 47 935 (888)
Due (to) from other funds/internal balances (614) (316) (298)
Current and other noncurrent assets 60,821$ 81,565$ (20,744)$
Overall Current and other noncurrent assets decreased by $20.7 million in the current fiscal year. The decrease
in current and noncurrent assets is primarily due to a decrease in restricted investment of $22.3 million. This
decrease was primarily due to liquidation of investment agreements with JP Morgan Chase Bank upon pay off of
the original Bradley Lake Project bonds on July 1, 2021. Increase in Restricted cash and cash equivalents of $1.6
million is primarily due to funds received for utility buy-in for participation in the Battle Creek Project to be
disbursed to the original project participants in fiscal year 2023. Operating receivables and prepaid expenses
increased by $25.0 thousand, associated with timing of monthly billing. Loans receivable (net of allowance)
increased by $1.1 million due to new loans. Accrued interest receivable decreased by $888.0 thousand
associated with interest rates on loans. Due (to) from other funds/internal balances will fluctuate annually
depending on program activities and cash needs.
10
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Management’s Discussion and Analysis
June 30, 2022
Total current and noncurrent liabilities
The following table is provided to show the details of AEA’s total current and noncurrent liabilities at June 30,
2022 and 2021 (stated in thousands):
2022 2021 Variance
Due to State of Alaska 691$ 744$ (53)$
Due to component units 99 - 99
Accounts payable 6,794 5,049 1,745
Bonds payable 45,925 69,109 (23,184)
Other liabilities 56 569 (513)
Accrued interest payable 952 1,484 (532)
Current and other noncurrent liabilities 54,517$ 76,955$ (22,438)$
Overall total current and noncurrent liabilities decreased in the current fiscal year by $22.4 million primarily due
to the reduction in bonds payable associated with the payoff of Bradley Lake bonds (First, Fourth and Sixth
Series), and an early prepayment of SSQ line debt service (Tenth Series). Due to the State of Alaska decreased by
$53 thousand and is related to state appropriations drawn based on project need; therefore, these balances will
fluctuate annually. Accounts payable increased by $1.7 million due to invoicing accruals at year end. Other
Bonds payable decreased by $513 thousand netted between debt service principal payments on the Bradley
Lake Hydroelectric Project bonds. Accrued interest payable decreased by $532 thousand related to lower
Bradley Lake debt compared to prior year.
Net Position
The following table is provided to show the details of AEA’s net position at June 30, 2022 and 2021 (stated in
thousands):
2022 2021 Variance
Net investment in capital assets 339,383$ 325,614$ 13,769$
Restricted for capital projects 1,969 1,979 (10)
Restricted for debt service 5,771 27,636 (21,865)
Restricted by agreements with external parties 3,168 3,913 (745)
Restricted by legislation 41,324 41,276 48
Unrestricted (4) - (4)
Net Position 391,611$ 400,418$ (8,807)$
Overall Net position decreased in the current fiscal year by $8.8 million primarily to reduction in bond debt
being greater than investments in capital additions. Net investment in capital assets increased $13.8 million due
to the net effect of capital asset additions and reduction of debt related to capital projects. Debt service is
reduced in fiscal year 2022 due to the payoff of original Bradley Lake Bond debt (Series First, Fourth and Sixth).
In addition, an early prepayment was made towards the SSQ Line bonds (Series Tenth).
11
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Management’s Discussion and Analysis
June 30, 2022
The following table is provided to show AEA’s revenues, expenses, and changes in net position at June 30, 2022
and 2021 (stated in thousands):
2022 2021 Variance 2022 2021 Variance
Revenues:
Program revenues:
Fees, fines, and charges
for services -$ -$ -$ 14,005$ 23,209$ (9,204)$
Operating grants and
contributions 16,993 17,064 (71) 172 228 (56)
General revenues:
Investment income (144,144) 150,472 (294,616) 35 1,511 (1,476)
State of Alaska appropriations/
transfers (12,395) 1,017,213 (1,029,608) - - -
Total revenues (139,546) 1,184,749 (1,324,295) 14,212 24,948 (10,736)
Expenses:
Grants and projects 18,238 20,370 (2,132) - - -
Power cost equalization grants 24,222 25,557 (1,335) - - -
General and administrative 4,990 19,078 (14,088) 1,329 1,526 (197)
Interest expense - - - 1,568 1,159 409
Plant operations - - - 7,834 7,797 37
Depreciation - - - 12,305 12,356 (51)
Provision for loan loss - - - (17) (33) 16
Total expenses 47,450 65,005 (17,555) 23,019 22,805 214
Change in net position (186,996) 1,119,744 (1,306,740) (8,807) 2,143 (10,950)
Net position, beginning of year 1,169,262 49,518 1,119,744 400,418 398,275 2,143
Net position, end of year 982,266 1,169,262 (186,996)$ 391,611$ 400,418$ (8,807)$
Governmental Activities Business-Type Activities
12
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Management’s Discussion and Analysis
June 30, 2022
Governmental Activities:
These are functions of the Authority that are financed primarily by intergovernmental revenues. AEA’s
governmental activities include Power Cost Equalization (PCE) Program, Renewable Energy Grant Fund, Trans-
Alaska Pipeline Liability Fund, Rural Energy Projects, Volkswagen Diesel Settlement Fund, and the Electric Utility
Relief Fund.
Total revenues for governmental activities decreased by $1.3 billion, based on the following:
•Operating grants and contributions and State of Alaska appropriations/transfers are from State of Alaska
operating and capital appropriations and Federal grant awards. AEA recognizes revenue to the extent of
expenditures. The State of Alaska appropriations/transfers reflects a variance decrease by $1.0 billion as a
result of removal of the PCE sweep in fiscal year 2021.
•Investment income is primarily from interest earned in the PCE Endowment Fund and the Renewable
Energy Grant Fund (REF), which are managed by the State Department of Revenue, Treasury Division.
Geopolitical and market conditions affected FY22 Investment income losses totaling $144.1 million
compared to investment income of $150.5 million in fiscal year 2021. Investment income losses in the PCE
Endowment Fund are $143.9 million and $309.0 thousand for REF.
Expenses for governmental activities decreased by $17.5 million, based on the following:
•Grants and project expenses decreased by $2.1 million in the current fiscal year. The decrease was a
combination of less State funds appropriated for the projects and deferral of projects due to supply chain
and logistical issues.
•PCE grants decreased by $1.3 million due to the timing between receipt of documentation from grantees
and payment to grantees and related year end liability accrual estimates of the timing differences.
•State of Alaska appropriations/transfers incurred no activity in fiscal year 2022. This is the result of the
legal ruling, which removed PCE from the sweep to the CBR, which removed the netted sweep reversal
from fiscal year 2020 and the fiscal year 2021 sweep amount.
•General and administrative expenses decreased by $14.1 million compared to the prior year and is
primarily due to a fiscal year 2021 State charge to the PCE Endowment for $16 million that did not reoccur
in fiscal year 2022.
13
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Management’s Discussion and Analysis
June 30, 2022
Business-Type Activities:
Total revenues for business-type activities decreased by $10.7 million, based on the following:
• Fees, fines, and charges for services decreased by $9.2 million. Charges for services include the amounts
received from the utilities for plant operations and debt service obligations. These services are provided
under various agreements and are based on project expenditures, operating cash requirements, and will
fluctuate annually. This decrease was primarily due to pay off of the original Bradley Lake Project bonds on
July 1, 2021. The revenue for funds to make the final payment was received in the prior year and no need
for revenue for the debt service in fiscal year 2022.
• Operating grants and contributions are from State of Alaska operating and capital appropriations.
Operating grants and contributions decreased slightly by $56.0 thousand due to project expenditures
related to the capital appropriations.
• Investment income decreased by $1.5 million, due to decreased investment earnings. This decrease was
primarily due to liquidation of investment agreements with JP Morgan Chase Bank upon pay off of the
original Bradley Lake Project bonds on July 1, 2021.
Expenses for business-type activities increased by $214.0 thousand, primarily based on the following:
• Interest expense represents the cost of interest on AEA’s Power Revenue Bonds for the Bradley Lake
Hydroelectric Project. Interest expense increased in the current fiscal year by $409.0 thousand. The
increase in interest expense is primarily due to increase in debt for the Bradley Lake Project purchase of a
transmission line from a participating utility in fiscal year 2022.
• Plant operations for the Bradley Lake Hydroelectric Project and the Alaska Intertie Project increased in
the current fiscal year by $37.0 thousand. Plant operations consist of various activities required to
maintain operations of each project. The decrease from the prior year is primarily due to reduced
transmission line expense for the Alaska Intertie Project.
Fund Financial Analysis
Governmental Fund:
The focus of AEA’s governmental fund is to provide information on near-term inflows, outflows, and balances of
spendable resources. Such information is useful in assessing AEA’s financing requirements.
14
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Management’s Discussion and Analysis
June 30, 2022
The following table is provided to show AEA’s total fund balances for the governmental funds at June 30, 2022
and 2021 (stated in thousands):
2022 2021 Variance
Power Cost Equalization Program 960,388$ 1,145,062$ (184,674)$
Renewable Energy Grant Fund 19,693 21,802 (2,109)
Emerging Energy Technology Fund 979 1,004 (25)
Trans-Alaska Pipeline Liability Fund 922 1,110 (188)
Rural Energy Projects 12 12 -
Power Development Fund 272 272 -
Total Fund Balances 982,266$ 1,169,262$ (186,996)$
At the end of the current fiscal year, AEA’s governmental funds reported combined ending fund balances of
$982.3 million, which is a decrease in comparison with the prior fiscal year. The Power Cost Equalization
Program decreases are due to unrealized losses on investments in the PCE Endowment Fund during the year.
The decrease in the Renewable Energy Fund by $2.1 million is a result of AEA disbursements for the Renewable
Energy Fund. The Trans-Alaska Pipeline Liability Fund reduced by $188.0 thousand, both as a result of project
activity in fiscal year 2022.
The combined ending fund balance is categorized as restricted to indicate that there is an externally enforceable
limitation to its use. Specifically, the fund balance is entirely restricted by agreements with external parties or by
legislation.
Proprietary Fund:
AEA’s proprietary fund financial statements consist of enterprise funds, which provide detailed information of
the same type found in the business-type activities section of the government-wide financial statements.
The following table is provided to show AEA’s total net position for the proprietary fund at June 30, 2022 and
2021 (stated in thousands):
2022 2021 Variance
Bradley Lake Hydroelectric Project 153,281$ 160,429$ (7,148)$
Alaska Intertie Project 13,324 15,031 (1,707)
Susitna-Watana Hydroelectric Project 183,682 183,682 -
Power Project Fund 39,602 39,554 48
Power Development and Railbelt Energy Projects 1,722 1,722 -
Total Net Position 391,611$ 400,418$ (8,807)$
At the end of the current fiscal year, AEA’s proprietary fund reported combined ending net position of $391.6
million, which is a decrease of $8.8 million in comparison with the prior fiscal year. The decrease of $7.1 million
for the Bradley Lake Hydroelectric Project was due to lower operating revenues net of higher operating
expenses. The operating revenue decrease is related to pay-off of the original Bradley Lake Project Bonds at the
15
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Management’s Discussion and Analysis
June 30, 2022
beginning of the year. The SSQ Line Bond (Tenth Series) payment was funded by the capital reserve balance
from the Bradley Lake Project bonds that was released upon payoff of the bonds. The decrease of $1.7 million
for the Alaska Intertie Project was due to operating revenues less than operating expenses as a result of
depreciation expense. The Power Project Fund increased slightly by $48.0 thousand.
The following table is provided to show the proprietary fund net position by category at June 30, 2022 and 2021
(stated in thousands):
2022 2021 Variance
Net investment in capital assets 339,383$ 325,614$ 13,769$
Restricted for capital projects 1,969 1,979 (10)
Restricted for debt service 5,771 27,636 (21,865)
Restricted by agreements with external parties 3,168 3,913 (745)
Restricted by legislation 41,324 41,276 48
Unrestricted (4) - (4)
Total Net Position 391,611$ 400,418$ (8,807)$
Total Net Position decreased by $8.8 million primarily by capital asset and debt service activity. The Net
investment in capital assets increased by $13.8 million, which is the net effect of capital asset additions and
retirements. In fiscal year 2022 the Bradley Project purchased a transmission line which is the primary reason for
the increase. The reduction of debt related to capital projects in fiscal year 2022 is reflected in the $21.9 million
decrease in the Restricted for debt service. The decrease is primarily due to pay off of the original Bradley Lake
Bonds.
Capital Assets and Debt Administration
Capital Assets:
AEA’s investment in capital assets for its business-type activities as of June 30, 2022 amounts to $385.3 million
(net of accumulated depreciation), which is a decrease of $10.8 million from the prior fiscal year. The
investment in capital assets only occurs in the enterprise funds and includes land and rights of way,
infrastructure, equipment, and construction in progress.
2022 2021 Variance
Land and Rights of Way 11,212$ 11,212$ -$
Equipment 1,394 1,228 166
Infrastructure 187,803 198,741 (10,938)
Construction in Progress 184,898 184,898 -
Total 385,307$ 396,079$ (10,772)$
.
Business-Type Activities
Capital assets, net of accumulated depreciation decreased by $10.8 million as a net result of additions and
depreciation of capital assets for both Bradley Lake and Alaska Intertie as normal maintenance and upgrades to
the existing assets. Further information on AEA’s capital assets can be found in Note 3.
16
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Management’s Discussion and Analysis
June 30, 2022
Long-Term Debt:
At the end of the current fiscal year, AEA had total long-term debt outstanding of $45.9 million. AEA’s total long-
term debt decreased by $23.2 million during the current fiscal year as a result of the final payments made on the
Bradley Lake First, Fourth and Sixth Series debt service and an early pay down of $10.9 million towards the SSQ
Line debt service (Series Tenth), which secured bonds in the amount of $17.0 million.
The following table is provided to show the outstanding debt at June 30, 2022 and 2021 (stated in thousands):
2022 2021 Variance
Power Revenue and Refunding Bonds
Bradley Lake -$ 10,870$ (10,870)$
Bradley Lake-Battle Creek private placement 39,864 41,239 (1,375)
Soldotna to Quartz Creek (SSQ) private placement 6,060 17,000 (10,940)
Total 45,924$ 69,109$ (23,185)$
Business-Type Activities
Further information on AEA’s long-term debt can be found in Note 5.
Outlook
AEA anticipates a substantial increase in federal funding, from the Infrastructure Investment and Jobs Act and
others, over the next several years. This increase will require substantial new receipt authority as well as
matching funds from the Legislature and other sources. In addition, it is anticipated that additional personnel
will be required to fulfill the Authority’s mission with the new funding.
Various Rural Power System Upgrades and Bulk Fuel Upgrades projects are anticipated to continue through
fiscal year 2023 with ongoing federal and state funding. AEA and the Denali Commission are leveraging the use
of available funding by shifting project focus to maintenance and improvement projects. AEA will continue Bulk
Fuel and Power Plant Operator training, Circuit Rider, Technical Assistance, and Electrical Emergency efforts
across Alaska.
AEA continues to manage the Renewable Energy Grant Fund (REF) active projects. The legislature approved
funding for Round 14 to begin in fiscal year 2023. AEA will next solicit applications for the Renewable Energy
Fund grant program in late 2022 to deliver a recommended priority for awarding grants to the Legislature for
fiscal year 2024 funding.
Operations and maintenance of AEA’s Bradley Lake Hydroelectric Project, and the Alaska Intertie Project will
continue as approved by the Bradley Lake Project Management Committee, AEA, and the Alaska Intertie
Committee, respectively. With the final payment on the original Bradley Lake bonds in early fiscal year 2022, an
excess earnings estimate has been calculated and will used to pay for a bond issuance of $166 million. These
funds will be used for required project work associated with the Bradley Lake Hydroelectric Project.
See Notes to Financial Statements 17
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Statement of Net Position
(in thousands)
June 30, 2022
Governmental Business-Type
Activities Activities Total
Assets
Current Assets
Restricted cash and cash equivalents 35,945$ 33,950$ 69,895$
Operating receivables 167 267 434
Due from federal government 4,424 - 4,424
Loans receivable, net of allowance - 482 482
Due from State of Alaska 616 - 616
Due from State of Alaska's component units - 113 113
Accrued interest receivable - 47 47
Due (to) from other funds/internal balances 614 (614) -
Total current assets 41,766 34,245 76,011
Noncurrent Assets
Restricted investments 978,610 - 978,610
Loans receivable, net of allowance - 26,576 26,576
Capital assets, net of accumulated depreciation - 385,307 385,307
Total noncurrent assets 978,610 411,883 1,390,493
Total Assets 1,020,376$ 446,128$ 1,466,504$
See Notes to Financial Statements 18
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Statement of Net Position
(in thousands)
June 30, 2022
Governmental Business-Type
Activities Activities Total
Liabilities
Current Liabilities
Due to State of Alaska 16,547$ 691$ 17,238$
Due to State of Alaska's component units 4,257 99 4,356
Accounts payable 17,306 6,794 24,100
Bonds payable - current portion - 1,605 1,605
Accrued interest payable - 952 952
Total current liabilities 38,110 10,141 48,251
Noncurrent Liabilities
Bonds payable - noncurrent portion - 44,320 44,320
Other bond liabilities - 56 56
Total noncurrent liabilities - 44,376 44,376
Total liabilities 38,110 54,517 92,627
Net Position
Net investment in capital assets - 339,383 339,383
Restricted for
Capital projects - 1,969 1,969
Debt service - 5,771 5,771
Agreements with external parties 922 3,168 4,090
Legislation 981,344 41,324 1,022,668
Unrestricted - (4) (4)
Total net position 982,266 391,611 1,373,877
Total Liabilities and Net Position 1,020,376$ 446,128$ 1,466,504$
See Notes to Financial Statements 19
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Statement of Activities
(in thousands)
Year Ended June 30, 2022
Fees, Fines,Operating
and Charges Grants and Governmental Business-Type
Functions/Programs Expenses for Services Contributions Activities Activities Total
Governmental Activities
Power Cost Equalization Program 25,944$ -$ -$ (25,944)$ -$ (25,944)$
Renewable Energy Grant Fund 1,787 - - (1,787) - (1,787)
Emerging Energy Technology Fund 37 - 12 (25) - (25)
Trans Alaska Pipeline Liability Fund 190 - - (190) - (190)
Rural Energy projects 17,877 - 15,366 (2,511) - (2,511)
Volkswagen Diesel Settlement Fund 1,615 - 1,615 - - -
Total governmental activities 47,450 - 16,993 (30,457) - (30,457)
Business-Type Activities
Bradley Lake Hydroelectric Project 18,960 11,798 - - (7,162) (7,162)
Alaska Intertie Project 3,590 1,709 172 - (1,709) (1,709)
Power Project Fund 469 498 - - 29 29
Total business-type activities 23,019 14,005 172 - (8,842) (8,842)
Total Activities 70,469$ 14,005$ 17,165$ (30,457) (8,842) (39,299)
General Revenues
Interest and investment
income (loss)(144,144)35 (144,109)
Transfer to State of Alaska (12,395) - (12,395)
Change in Net Position (186,996) (8,807) (195,803)
Net Position, Beginning of Year 1,169,262 400,418 1,569,680
Net Position, End of Year 982,266$ 391,611$ 1,373,877$
Net (Expense) Revenue and Changes in Net PositionProgram Revenues
See Notes to Financial Statements 20
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Balance Sheet – Governmental Funds
(in thousands)
June 30, 2022
Major Special Statement of
Revenue Fund Net Position
Assets
Current Assets
Restricted cash and cash equivalents 35,945$ 35,945$
Operating receivable 167 167
Due from federal government 4,424 4,424
Due from State of Alaska 616 616
Due (to) from other funds/internal balances 614 614
Total current assets 41,766 41,766
Noncurrent Assets
Restricted investments 978,610 978,610
Total assets 1,020,376$ 1,020,376$
Liabilities
Current Liabilities
Due to State of Alaska 16,547$ 16,547$
Due to State of Alaska's component units 4,257 4,257
Accounts payable 17,306 17,306
Total liabilities 38,110 38,110
Fund Balance
Restricted for
Agreements with external parties 922
Legislation 981,344
Total fund balance 982,266
Total Liabilities and Fund Balance 1,020,376$
Net Position
Restricted for
Agreements with external parties 922
Legislation 981,344
Total net position 982,266
Total Liabilities and Net Position 1,020,376$
See Notes to Financial Statements 21
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds
(in thousands)
Year Ended June 30, 2022
Major Special Statement of
Revenue Fund Activities
Operating Revenues
State of Alaska appropriations 4,290$ 4,290$
Federal grants 10,211 10,211
Other revenues 2,492 2,492
Total operating revenues 16,993 16,993
Operating Expenses
Grants and projects 18,238 18,238
Power cost equalization grants 24,222 24,222
General and administrative 4,990 4,990
Total operating expenses 47,450 47,450
Nonoperating Revenues (Expenses)
Investment loss, net (144,144) (144,144)
State of Alaska appropriations and transfers (12,395) (12,395)
Total nonoperating revenue (expenses)(156,539) (156,539)
Change in Fund Balance (186,996)
Change in Net Position (186,996)
Fund Balance/Net Position, Beginning of Year 1,169,262 1,169,262
Fund Balance/Net Position, End of Year 982,266$ 982,266$
See Notes to Financial Statements 22
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Statement of Net Position – Enterprise Fund
(in thousands)
June 30, 2022
Assets
Current Assets
Restricted cash and cash equivalents 33,950$
Operating receivable 267
Loans receivable, net of allowance 482
Due from State of Alaska's component units 113
Accrued interest receivable 47
Due (to) from other funds/internal balances (614)
Total current assets 34,245
Noncurrent Assets
Loans receivable, net of allowance 26,576
Capital assets, net of accumulated depreciation 385,307
Total noncurrent assets 411,883
Total Assets 446,128$
See Notes to Financial Statements 23
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Statement of Net Position – Enterprise Fund
(in thousands)
June 30, 2022
Liabilities
Current Liabilities
Due to State of Alaska 691$
Due to local government 99
Accounts payable 6,794
Bonds payable - current portion 1,605
Accrued interest payable 952
Total current liabilities 10,141
Noncurrent Liabilities
Bonds payable - noncurrent portion 44,320
Other liabilities 56
Total noncurrent liabilities 44,376
Total liabilities 54,517
Net Position
Net investment in capital assets 339,383
Restricted for
Capital projects 1,969
Debt service 5,771
Agreements with external parties 3,168
Legislation 41,324
Unrestricted (4)
Total net position 391,611
Total Liabilities and Net Position 446,128$
See Notes to Financial Statements 24
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Statement of Revenues, Expenses, and Changes in Net Position – Enterprise Fund
(in thousands)
Year Ended June 30, 2022
Operating Revenues
State of Alaska appropriations 171$
Revenue from operating plants 13,507
Interest on loans 346
Other revenues 153
Total operating revenues 14,177
Operating Expenses
Depreciation 12,305
General and administrative 1,329
Plant operations 7,834
Provision for loan recovery (17)
Total operating expenses 21,451
Operating Income (Loss)(7,274)
Nonoperating Revenues (Expenses)
Investment income, net expenses 35
Interest expense (1,568)
Total nonoperating revenue (1,533)
Change in Net Position (8,807)
Net Position, Beginning of Year 400,418
Net Position, End of Year 391,611$
See Notes to Financial Statements 25
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Statement of Cash Flows – Enterprise Fund
(in thousands)
Year Ended June 30, 2022
Operating Activities
Receipts from customers and users 14,836$
Payments from State of Alaska 171
Payments to suppliers (6,091)
Net Cash from Operating Activities 8,916
Noncapital and Related Financing Activities
Net Increase in short-term borrowings from AIDEA for working capital (1,043)
Capital and Related Financing Activities
Principal paid on bonds (23,185)
Payments for other bond liabilities (1,977)
Interest paid on bonds (1,532)
Capital asset acquisitions (927)
Net Cash used for Capital and Related Financing Activities (27,621)
Investing Activities
Purchase of investments (5,280)
Proceeds from sales and maturities of investments 27,622
Interest received from investments 35
Net change in loans (1,030)
Net Cash from Investing Activities 21,347
Net Change in Restricted Cash and Cash Equivalents 1,599
Restricted Cash and Cash Equivalents, Beginning of Year 32,351
Restricted Cash and Cash Equivalents, End of Year 33,950$
See Notes to Financial Statements 26
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Statement of Cash Flows – Enterprise Fund
(in thousands)
Year Ended June 30, 2022
Reconciliation of operating income (loss) to net cash from operating activities
Operating income (loss)(7,274)$
Adjustments to reconcile operating income (loss) to net cash
used from operating activities
Depreciation 12,305
Changes in assets and liabilities
Operating receivables (61)
Due to/from other funds 298
Due to/from local government (14)
Accrued interest receivable 889
Prepaid assets 36
Due to/from State of Alaska (52)
Operating accounts payable 2,789
Net Cash from Operating Activities 8,916$
27
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
Note 1 - Summary of Significant Accounting Policies
Reporting Entity
The Alaska Energy Authority (AEA or Authority) was created by the Alaska State Legislature in 1976. AEA is a
public corporation of the State of Alaska (State) within the Department of Commerce, Community, and
Economic Development with separate and independent legal existence. AEA has its own self-balancing set of
financial statements independently audited separate from the State. For financial reporting, AEA is a component
unit of the State. AEA finances various energy infrastructure projects and energy programs to reduce the cost of
energy throughout the State. AEA receives funding from the State, federal grants, and utility companies for use
of AEA owned assets.
Pursuant to legislation enacted in 1993, the Members of the Board of the Alaska Industrial Development and
Export Authority (AIDEA) also serve as the Board of Directors of AEA. AIDEA provides personnel services for AEA
(per statute, AEA has no employees) and has a Board approved borrowing agreement to provide short-term
working capital funds to AEA. AIDEA and AEA have separate executive directors, both are employees of AIDEA.
There is no commingling of funds, assets, or liabilities between AIDEA and AEA and there is no responsibility of
one for the debts or the obligations of the other. Neither AIDEA’s accounts nor activities are included in the
accompanying financial statements.
The following is a description of AEA’s existing owned projects and programs:
Bradley Lake Hydroelectric Project
The project has 120 megawatts of installed capacity and transmits its power to the State’s main power grid via
two parallel 20–mile transmission lines. The project, which cost in excess of $300 million, went into commercial
operation in 1991. The Bradley Lake Project Management Committee (BPMC) oversees the activities of the
Bradley Lake Hydroelectric Project. The BPMC consists of representatives from the following utilities and AEA:
Golden Valley Electric Association (GVEA), Chugach Electric Association (CEA), Matanuska Electric Association
(MEA), Homer Electric Association (HEA), and the City of Seward. The project is now operated by Homer Electric
Association under contract with AEA. Bradley Lake serves Alaska’s Railbelt (the power-sharing area between
Interior Alaska and South Central Alaska, connected by roads, generating facilities, and transmission lines) from
the Kenai Peninsula to Fairbanks, as well as the Delta Junction area. The BPMC utilities pay AEA for the costs of
operations and maintenance of the Bradley Lake Hydroelectric Project.
In September 2016, the Authority received an amendment to the Federal Energy Regulatory Commission (FERC)
license for a diversion of West Fork Upper Battle Creek into Bradley Lake. The diversion increases the Bradley
Lake projects annual energy by approximately 37,000 megawatt hours (MWh). Construction began in 2018 and
was completed in October 2020.
All the Purchasers of the Bradley Lake Project Management Committee (BPMC) have supported the
development and completion of the Battle Creek Diversion (BCD) Project. In April 2022, Golden Valley Electric
Association (GVEA), an initial Non-Purchaser, issued it Callback Notice and payment to participate in the Battle
Creek Diversion Project. The BPMC accepted a GVEA Buy-In, re-allocated the shares and GVEA became a full
participant in the Battle Creek Diversion Project effective May 1, 2022.
28
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
In December 2020 the Authority purchased the Sterling to Quartz section of the 115kV transmission line from
Homer Electric Association. This transmission line connects the Bradley Lake Hydroelectric Project to the
customers that are located north of the Kenai Peninsula. The section is approximately 39 miles long.
In December 2020, the Authority closed on the purchase of the Sterling Substation to Quartz Creek Substation
(SSQ Line), which issued bonds in the amount of $17,000,000. Purchase of the SSQ Line is in support of the
Bradley Lake Hydroelectric Project. In June 2022, the Railbelt utilities opted to make an early prepayment of
$10.9 million on the SSQ Line debt using capital reserve funds that were released upon final payment on the
original Bradley Lake project bonds.
In December of 2021, The Authority in partnership with the Railbelt utilities, began coordination to pursue bond
financing for required project work to improve the efficiency and deliverable capacity of power from the Bradley
Lake Hydroelectric Project. The planned financing will pay for transmission line upgrades and battery energy
storage systems that will reduce existing constraints on the Railbelt grid by increasing transmission capacity to
export Bradley Lake hydropower, while also allowing for the integration of future renewable energy generation.
Bradley Lake financing completed on November 30, 2022.
Alaska Intertie Project
The Alaska Intertie is a 170–mile transmission line designed for 345 kilovolts (kV) and operated at 138kV. It runs
between Willow and Healy and interconnects the electric utilities in the Southcentral region with Fairbanks area
electric utilities. The Intertie Management Committee (IMC) and AEA manage the Alaska Intertie according to
the terms and conditions of the Alaska Intertie Agreement. AEA contracts with the following utilities for
operations and maintenance: GVEA in Fairbanks, and Southcentral Alaska utilities, CEA, and MEA (Participating
Utilities). The Intertie reduces the number of black/brownouts throughout the system by enabling power to
move either north or south when major system disturbances occur. The Intertie enables GVEA to purchase low-
cost power from Southcentral utilities and allows Southcentral Alaska utilities to purchase power from Fairbanks
during power shortages. It also enables GVEA to receive power generated by the Bradley Lake Project, which is
some of the lowest priced power in the Railbelt region.
Susitna-Watana Hydroelectric Project
The Alaska Legislature appropriated $192 million in funding to AEA towards the development of a large
hydroelectric project to be built in the Railbelt Region. The proposed project would be located approximately
half-way between Anchorage and Fairbanks on the upper Susitna River and would include a single dam that
would produce 2,800,000 MWh annually, equivalent to approximately 50% of the Railbelt’s annual electrical
use.
AEA pursued a FERC license. Pursuant to Administrative Order No. 271, AEA advanced the licensing process
through FERC’s issuance of an updated Study Plan Determination on the environmental studies completed
between 2013 and 2015. The engineering feasibility study and economic analysis have been completed; FERC’s
updated Determination on the environmental work completed thus far was favorable to the State. The licensing
effort is currently in abeyance. On February 21, 2019, Governor Michael Dunleavy issued Administrative Order
(AO) No. 309 which rescinded several AOs, including AO No. 271. However, AEA has not been directed to re-
29
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
initiate the licensing process. The licensing project remains in abeyance, as State level discussions integrating
this project into Alaska’s Statewide Energy Plan.
Rural Energy Programs
The rural energy programs include Bulk Fuel Storage Upgrades, Rural Power System Upgrades, the Power Cost
Equalization (PCE) Grant Program, Utility Training, Technical Assistance, one active loan program (the Power
Project Fund), and one inactive loan program (Rural Electrification Revolving Loan Fund). During fiscal year 2022,
the Authority established the Electric Utility Relief Fund and disbursed funds to Grantee’s for verified eligible
residential electric utility costs that arose due to COVID -19. The Program provided Grantee’s with funding to
retire delinquent residential electric utility costs stemming from the pandemic. Subject to appropriations, the
PCE Endowment Fund provides the PCE grant program a long-term stable financing source in order to reduce
electricity costs for residential and community facility customers in otherwise high-cost service areas.
Energy Development Programs
The energy development programs include the Renewable Energy Grant Fund and Recommendation Program
and the Alternative Energy and Energy Efficiency (AEEE) programs.
The purpose of the Renewable Energy Grant Fund and Recommendation program is to finance renewable
energy projects in Alaska. The AEEE programs support the development of alternative energy resources specific
to Alaska.
Basis of Accounting
As a component unit of the State, and for the purpose of preparing financial statements in accordance with
U.S. Generally Accepted Accounting Principles (GAAP), the Authority, as a public corporation of the State with
separate and independent legal existence, is subject to the accounting requirements as set forth by the
Governmental Accounting Standards Board (GASB).
The funds of the Authority are organized as Governmental Fund and Proprietary Fund. The financial activities of
the Authority are recorded in various funds as necessitated by sound fiscal management. The funds are
combined for financial statement purposes.
Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities)
report information on all of the activities of the Authority. In general, the effect of inter-fund activity has been
removed from these statements to minimize the double-counting of internal activities. Governmental activities,
which normally are supported by intergovernmental revenues, are reported separately from business-type
activities, which rely primarily on fees and charges to external parties.
30
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
The statement of activities demonstrates the degree to which the direct expenses of a given function or
segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific
function or segment. Program revenues include 1) fees, fines and charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and
2)grants and contributions that are restricted to meeting the operational or capital requirements of a particular
function or segment. Other items not properly included among program revenues are reported instead as
general revenues. Investment earnings are general revenues.
Separate financial statements are provided for the special revenue fund and enterprise fund.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide and proprietary fund financial statements are reported using the economic resources
measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses
are recorded when a liability is incurred, regardless of the timing of the related cash flows. Grants and similar
items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus
and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and
available. Revenues are considered to be available when they are collectible within the current period or soon
enough thereafter to pay liabilities of the current period. For this purpose, the Authority considers all revenues,
except reimbursement grants, to be available if they are collected within 60 days after year end. Reimbursement
grants are considered available if they are collected within one year of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under full accrual accounting. However, debt
service expenditures are recorded only to the extent they have matured.
The Authority reports the following major funds:
•Major governmental funds – AEA uses a special revenue fund to account for its governmental activities.
This fund does not have a legally adopted budget, and hence the budget to actual is not presented in the
financial statements.
•Major proprietary funds – The enterprise fund accounts for all financial activities primarily related to fees
and charges to external parties.
Revenue Recognition
AEA does not have a General Fund since all funds are legally restricted with specific purposes by external
agreements, legislation, or statute. As a general rule, the effect of inter-fund activity has been eliminated from
the government-wide financial statements.
Amounts reported as program revenues include 1) fees, fines, and charges to customers or applicants for goods,
services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions.
Internally dedicated resources are reported as general revenues rather than as program revenues.
31
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
For purposes of proprietary fund presentation, the Authority considers its revenues and expenses, except
investment income, the sale of program loans, certain fund transfers and appropriations with the State, and
conveyance of capital assets, to be part of its principal ongoing operations and, therefore, classifies these
revenues and expenses as operating in the statement of revenues, expenses, and changes in net position.
All other revenues and expenses are considered non-operating.
Fair Value Measurement and Application
Securities or other assets are reported and measured at fair value if (a) we hold it primarily for the purpose of
income or profit and (b) it has a present service capacity based solely on its ability to generate cash or be sold to
generate cash.
Cash and Cash Equivalents
All of AEA’s cash and cash equivalents are restricted or designated as to use. AEA has trust accounts defined by
bond resolutions, agreements with external parties, and state legislation restricting the use of cash and
investments.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash, short-term
commercial paper, and money market funds.
Investments
Marketable securities are reported at fair value in the financial statements. Unrealized gains and losses are
reported as components of the change in net position. Fair values are obtained from independent sources.
Investments are segregated between current and noncurrent based on stated maturity and intended use.
Investments maturing within a year are classified as current if they are considered to be potentially needed for
current operations. This classification recognizes that a portion of our investment portfolio may be needed for
current operations. A noncurrent investment may be sold for operational cash flow needs, if needed, and is
beneficial under current market conditions.
Loans and Related Interest Income
Loans are generally carried at amounts advanced less principal payments collected. Interest income is accrued as
earned. Accrual of interest is discontinued whenever the payment of interest or principal is more than ninety
days past due or when the loan terms are restructured. The Authority considers lending activities to be part of
its principal operations and classifies it as operating in the statement of revenues, expenses, and changes in net
position. For purposes of the statement of cash flows, the loan program activities are treated as investing
activities.
32
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
Allowance for Loan Losses
The allowance for loan losses represents management’s judgment as to the amount required to absorb probable
losses in the loan portfolio. The factors used by management to determine the allowance required include
payment history, individual loan size, collateral values, and other factors. Management’s opinion is that the
allowance is currently adequate to absorb known losses and inherent risks in the portfolio.
Capital Assets
Capital assets are stated at cost and depreciation is charged to operations by use of the straight-line method
over their estimated useful lives. The Authority capitalizes all assets with a cost of at least $5,000 and a useful
life greater than one year.
The estimated economic lives of the assets are as follows:
Life in Years
Intangible 30-50
Production 30-50
Transmission 20-40
General 5-30
Utility Plant
AEA recognizes intangible assets per the guidance of GASB Statement No. 51, Accounting and Financial
Reporting for Intangible Assets. Intangible assets are assets which are nonfinancial in nature, lack physical
substance, are identifiable and have a useful life extending beyond a single reporting period. Costs associated
with the generation of internally generated intangible assets are capitalized when incurred after the following
milestones have been met:
•Determination of the specific objective of the project and the nature of the service capacity that is
expected to be provided by the intangible asset upon the completion of the project.
•Demonstration of the technical or technological feasibility for completing the project so that the intangible
asset will provide its expected service capacity.
•Demonstration of the current intention, ability, and presence of effort to complete or, in the case of a
multiyear project, continue development of the intangible asset.
The Authority recognizes impairment losses for long-lived assets whenever there is a significant unexpected
decline in service utility.
Interest on short-term and long-term borrowing for construction projects are capitalized during the construction
phase of the projects.
Fund Balance
In the fund financial statements, the Special Revenue Fund reports aggregate amounts for five classifications of
fund balances based on the constraints imposed on the use of these resources. The non-spendable fund balance
33
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
classification includes amounts that cannot be spent because they are either (a) not in spendable form—prepaid
items or inventories; or (b) legally or contractually required to be maintained intact. The spendable portion of
the fund balance comprises the remaining four classifications: restricted, committed, assigned, and unassigned.
Restricted fund balance – this classification reflects the constraints imposed on resources either (a) externally by
creditors, grantors, contributors, laws, or regulations of other governments; or (b) imposed by law through
constitutional provisions or enabling legislation.
All of the Authority’s fund balance is restricted.
Net Position
Net position is displayed in three components, as follows:
Net investment in capital assets – This consists of capital assets, net of accumulated depreciation, less the
outstanding balances of any bonds, mortgages, notes, and accounts payable or other borrowings that are
attributable to the acquisition, construction, or improvement of those assets.
Restricted – This consists of net assets that are legally restricted by outside parties. Those restrictions come in
the form of legislation or State statute that cannot be modified by AEA’s board of directors.
Unrestricted – This consists of net assets that do not meet the definition of “restricted” or “net investment in
capital assets.”
The Authority’s spending policy is to evaluate, on a case-by-case basis, whether restricted or unrestricted net
position should be spent. This evaluation is performed by management as part of the overall spending plan.
Environmental Issues
The Authority’s policy relating to environmental issues, including pollution and contamination remediation
obligations to address the current or potential detrimental effects of existing pollution by participating in
pollution remediation activities such as site assessments and cleanups, is to record a liability when the likelihood
of Authority responsibility for clean-up is probable and the costs are reasonably estimable.
Appropriations and Grants
The Authority recognizes appropriations and grant revenue when all applicable eligibility requirements,
including time requirements, are met.
Estimates
In preparing the financial statements, management of the Authority is required to make estimates and
assumptions that affect the reported amounts of asset, deferred outflows of resources, liabilities, deferred
inflows of resources and disclosures of contingencies as of the date of the statements of net position. These
estimates impact revenue and expenses for the period. Actual results could differ from those estimates.
34
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
Rounding
The preparation of the financial statements represents accurate numerical values by using rounding which may
cause differences in the statements due to rounding. Rounding a numerical value means replacing it by another
value that is approximately equal but shorter, simpler, or more explicit.
Note 2 - Cash and Investments
Pursuant to various agreements, appropriations, and statutory requirements relating to its operations, AEA has
established accounts for assets restricted to construction, operation, and financing activities. As used
throughout this note, “Fund” means a separate account established by the State legislature and does not refer
to a separate group of self-balancing accounts as contemplated by GAAP.
At June 30, 2022, the Authority’s bank and carrying amount of cash and cash equivalents (all of which were
restricted or designated for specific purposes) was $69,895,000.
The restricted cash and cash equivalents and investments were held in trust and restricted accounts for the
following activities as of June 30, 2022 (in thousands):
Governmental Business-Type
Activities Activities TotalsRestricted Cash and Cash Equivalents
Bradley Lake Hydroelectric Project -$ 17,561$ 17,561$ Alaska Intertie Project - 1,335 1,335 Power Project Fund - 12,544 12,544 Power Development and Railbelt Energy Projects 13,933 2,510 16,443 Rural Energy Projects 218 -218 Power Cost Equalization Program 14,877 - 14,877 Renewable Energy Grant Fund 3,893 - 3,893 Emerging Energy Technology Fund 984 - 984 Trans-Alaska Pipeline Liability Fund 964 - 964 VW Settlement 1,076 - 1,076
35,945$ 33,950$ 69,895$
Governmental Business-Type
Activities Activities TotalsRestricted Investments
Power Cost Equalization Program 957,488$ -$ 957,488$ Renewable Energy Grant Fund 21,122 - 21,122
978,610$ -$ 978,610$
35
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
Investment Holdings
The Power Cost Equalization Endowment Fund (PCE Fund), created under Alaska Statute (AS) 42.45.070, and the
Renewable Energy Grant Fund (RE Fund), created under AS 42.45.045, are under the fiduciary authority of the
State Department of Revenue, Treasury Division (Treasury). AEA requests draws from these funds as needed for
program cash flow needs.
Other AEA Cash and Investments – a portion of Bradley Lake Hydroelectric Project investments were invested
pursuant to investment agreements with JP Morgan Chase Bank that guarantees annual interest earnings of
7.38% or 7.41% per annum. The investment agreement closed as a result of the Bradley Lake Power Revenue
Bonds, First Series debt service repayment completed on July 1, 2021. These investments were in
nonparticipating contracts and were measured at cost in accordance with GASB 31. Additional funds are held by
a trustee bank and invested in accordance with the requirements of the trust agreement.
Under the Internal Revenue Code of 1986, as amended, certain earnings in excess of arbitrage yield on the
Bradley Lake bonds must be rebated to the U.S. Treasury. Bradley Lake investments, associated with the Power
Revenue Bonds and Refunding Bonds, are subject to rebate computation.
Internal staff manage AEA’s internally managed portfolio for liquidity and safety. There is no AEA Board
approved investment policy; however, staff follows AIDEA’s Board approved investment policy for internally
managed investments (the Resolution). The AEA managed portfolio consists of the following eligible securities:
• Debt instruments issued or guaranteed by the U.S. government, its agencies and instrumentalities, and
Government Sponsored Enterprises (GSEs);
• Money market funds collateralized by U.S. Treasury, agency securities, and repurchase agreements;
• Units in the investment pool or any series of investment pool of the Alaska Municipal League Investment
Pool, Inc., or any successor to that entity, or any other investment pool for public entities of the State of
Alaska that is established under the Alaska Investment Pool Act (AS 37.23.010-37.23.900); and
• Other investments specifically approved by the board.
36
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
Fair Value Measurement
AEA categorizes fair value measurements within the fair value hierarchy established by generally accepted
accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of an asset.
Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other
observable inputs; and Level 3 inputs are significant unobservable inputs. Following is a summary of the AEA’s
cash and investments at the recurring fair value measurement at June 30, 2022 (in thousands):
Governmental Business-Type
Activities Activities Totals
Money market funds 35,945$ 33,950$ 69,895$ Investments managed by Treasury 978,610 - 978,610
1,014,555$ 33,950$ 1,048,505$
Money market funds which are not held primarily for the purpose of income or profit and have remaining
maturities at time of purchase of one year or less. Therefore, the money market funds are recorded at
amortized cost. Investments managed by Treasury are invested in a pooled environment and the remaining
investments have a fair value Level of 2.
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will negatively affect the fair value of an investment.
The resolution addresses interest rate risk. Duration is an indicator of a portfolio’s market sensitivity to changes
in interest rates. In general, major factors affecting duration are (in order of importance):
1.Maturity
2.Prepayment frequency
3.Level of market interest rates
4.Size of coupon
5.Coupon payments
Rising interest rates generally translate into the fair market value of fixed income investments declining, while
falling interest rates are generally associated with increasing market values. Effective duration attempts to
account for the price sensitivity of a bond to changes in prevailing interest rates, including the effect of
embedded options. For example, for a bond portfolio with a duration of 5.0, a one percentage point parallel
decline in interest rates would result in an approximate price increase on that bond portfolio of 5.0%.
AEA Internally Managed Investments – AEA has no written policy for interest rate risk for internally managed
investments; however, staff follows and believes to be in compliance with AIDEA’s written policy for interest
rate risk. The duration for investments is 2 years or less. The maximum maturity of any issue is 3 years from the
date of purchase.
37
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
Credit Risk
AEA has no written policy with regard to credit risk; however, staff follows and believe to be in compliance with
AIDEA’s written policy for credit risk with regards to its internally managed portfolio. Since AEA only invests its
internally managed portfolio in highly rated money markets and U.S. government and agency securities and
GSEs, credit risk is minimal.
The Bradley Lake Hydroelectric Project investments contain a portion that are invested in guaranteed
investment contracts collateralized by federal obligations, which minimize credit risk.
Custodial Credit Risk
Custodial credit risk is the risk that deposits may not be returned in the event of a bank failure. Treasury’s policy
with regard to custodial credit risk is to collateralize State deposits to the extent possible. At June 30, 2022,
AEA’s deposits managed by Treasury were uncollateralized and uninsured.
With respect to AEA managed investments, amounts totaling approximately $69,895,000 at June 30, 2022 are
held in money market funds with the custodian, the trust department of a commercial bank; therefore, no
custodial risk exists for these securities. Investment agreements for Bradley Lake ended July 1, 2021 with the
payoff of the bonds.
Renewable Energy Grant Fund
The State Department of Revenue – Treasury Division has created a pooled environment by which it manages
the investments for which its Commissioner has fiduciary responsibility. Actual investing is performed by
investment officers within Treasury or by contracted external investment managers. The Fund invests in the
State’s internally managed General Fund and Other Non-Segregated Investments Pool (GeFONSI). The GeFONSI
consists of investments in the State’s internally managed Short-term Fixed Income Pool, Short-term Liquidity
Fixed Income Pool, and the Intermediate-term Fixed Income Pool. The complete financial activity of the Fund is
shown in the Annual Comprehensive Financial Report (ACFR) available from the Department of Administration,
Division of Finance.
Assets in the pools are reported at fair value. Investment purchases and sales are recorded on a trade-date
basis. Securities are valued each business day using prices obtained from a pricing service.
The full accrual basis of accounting is used for the investment income and GeFONSI investment income is
distributed to pool participants monthly if prescribed by statute or if appropriated by the State legislature.
Income in the Short-term, Short-term Liquidity, and Intermediate-term Fixed Income Pools is allocated to the
pool participants daily on a pro-rata basis.
At June 30, 2022, the GeFONSI total for the Renewable Energy Grant Fund was $21,122,000. For additional
information on interest rate risk, credit risk, foreign exchange, derivatives, fair value, and counterparty credit
risk see the separately issued report on the Invested Assets of the Commissioner of Revenue at:
http://treasury.dor.alaska.gov/Investments/Annual-Investment-Reports.aspx.
38
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
Power Cost Equalization Endowment Fund Investment Holdings
Treasury has created a pooled environment by which it manages the investments for which the Commissioner
has fiduciary responsibility. Actual investing is performed by investment officers in Treasury or by contracted
external investment managers. The Fund invests in the State’s internally managed Short-term Fixed Income
Pool, the Broad Market Fixed Income Pool, as well as the State’s internally managed Domestic Equity and
International Equity Pools. The complete financial activity of the Fund is shown in the ACFR available from the
State - Department of Administration, Division of Finance.
Assets in the pools are reported at fair value. Investment purchases and sales are recorded on a trade-date
basis. Fixed income and equity securities are valued each business day. Securities expressed in terms of foreign
currencies are translated into U.S. dollars at the prevailing exchange rates.
The full accrual basis of accounting is used for investment income. Income in the Short-term and Broad Market
Fixed Income Pools is allocated to pool participants daily on a pro-rata basis.
At June 30, 2022, the Authority’s share of pool investments was as follows (in thousands):
Cash and cash equivalents
Short-term fixed income pool 9,928$
Fixed income – broad market pool 440,684
Equity
Domestic equity pool 289,317
International equity pools 189,935
Real estate investment trust pool 37,552
967,416
Less cash and cash equivalents (9,928)
957,488$
For additional information on interest rate risk, credit risk, foreign exchange, derivatives, fair value, and
counterparty credit risk see the separately issued report on the Invested Assets of the Commissioner of Revenue
at: http://treasury.dor.alaska.gov/Investments/Annual-Investment-Reports.aspx.
39
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
Note 3 - Capital Assets
Capital asset activity for the year ended June 30, 2022 was as follows (in thousands):
Balance at Balance atBusiness-Type Activities July 1, 2021 Additions Deletions June 30, 2022Capital assets not being depreciated
Land and rights of way 11,212$ -$ -$ 11,212$ Construction in progress
Intangibles 183,682 - - 183,682 Other 1,216 - - 1,216
Total capital assets not
being depreciated 196,110 - - 196,110
Capital assets being depreciated
Equipment 6,864 394 - 7,258 Infrastructure 513,568 1,139 - 514,707
Total capital assets
being depreciated 520,432 1,533 - 521,965
Less accumulated depreciation
Equipment (5,636) (163) - (5,799) Infrastructure (314,827) (12,142) - (326,969)
Total accumulated depreciation (320,463) (12,305) - (332,768)
Total capital assets, being
depreciated, net 199,969 (10,772) - 189,197
Capital assets, net 396,079$ (10,772)$ -$ 385,307$
Depreciation expense was charged to the functions as follows for the year ended June 30, 2022 (in thousands):
Business-Type Activities
Bradley Lake Hydroelectric Project 10,806$
Alaska Intertie Project 1,499
12,305$
40
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
Note 4 - Interfund Receivables, Payables, and Transfers
Interfund balances typically result from short-term operating or capital advances. Transfers typically result from
operating activities. A schedule of interfund balances as of and for the year ended June 30, 2022 follows (in
thousands):
Due from other funds
Due to Special Revenue Fund from Enterprise Fund 614$
Note 5 - Long-Term Debt
Long-term debt activity for the year ended June 30, 2022 was as follows (in thousands):
Due
Balance at Balance at within
Business-Type Activities July 1, 2021 Additions Deletions June 30, 2022 one year
Power Revenue Bonds
Bradley Lake
First Series 25$ -$ (25)$ -$ -$
Refunding, Fourth Series 4,395 - (4,395) - -
Refunding, Sixth Series 6,450 - (6,450) - -
Transmission Line
Tenth Series 17,000 - (10,940) 6,060 230
Bradley Lake - Battle Creek Diversion -
Private Placement
Seventh Series 40,000 - (1,333) 38,667 1,333
Eighth Series 1,239 - (42) 1,197 42
Total bonds payable 69,109 - (23,185) 45,924 1,605
Arbitrage interest payable (c)390 - (390) - -
Total other bond liabilities 390 - (390) - -
69,499$ -$ (23,575)$ 45,924$ 1,605$
AEA issued the following Bonds in support of the Bradley Lake Project (Bradley Lake Bonds):
•First and Second Series in September 1989 and August 1990, respectively, for the long-term financing of
the construction costs of the Bradley Lake Hydroelectric Project and refunded AEA’s Variable Rate
Demand Bonds which were issued in November 1985 to provide interim financing for the Project.
•Third and Fifth Series Power Revenue Refunding Bonds in April 1999 to refund a portion of the First
Series Bonds and pay costs of issuance. The First Series refunded bonds were called on July 1, 1999.
41
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
• Fourth Series Power Revenue Refunding Bonds in April 2000 to refund a portion of the Second
Series Bonds and to provide costs of issuance. The Second Series refunded bonds were called on July 1,
2000.
• Sixth Series Power Revenue Refunding Bonds in July 2010 in the amount of $28,800,000 to refund and
defease $30,640,000 aggregate outstanding principal amount of the Authority’s Power Revenue Refunding
Bonds, Fifth Series, and to pay costs of issuing the bonds. The refunded bonds were called on August 2,
2010.
The outstanding Bradley Lake bonds above mature annually each July 1 through the year 2021 with interest
rates ranging from 4.0% to 6.25% and were paid off during fiscal year 2022.
AEA issued the following Bonds in support of the Bradley Lake Project. The Bradley Lake Bond below was issued
on December 17, 2020 as a private placement for the purchase of the SQQ Line project, as required project work
for the Bradley Lake Project:
• $17,000,000 Tenth Series Taxable Draw-Down Bonds
The Bradley Lake Bonds below were issued as a private placement in support of the Battle Creek Diversion
project, an improvement to the Bradley Lake Project:
• $40,000,000 Seventh Series New Clean Renewable Energy Bonds.
• $1,239,000 Eighth Series Qualified Energy Conservation Bonds.
• $5,761,000 Ninth Series Taxable Draw-Down Bonds.
Only the Seventh, Eighth, and Tenth Series have amounts outstanding as of June 30, 2022. During the period of
construction, interest only payments are due on the outstanding bonds at a fixed interest rate of 4.24%. The
outstanding bonds mature annually each July 1 starting in 2021 through the year 2050. The draw period for the
Ninth Series ended in December 2020; no draws were made as of June 30, 2022. The Seventh and Eighth Series
Bonds qualify for federal tax credits under the New Clean Renewable Energy Bond and Qualified Energy
Conservation Bond Programs, respectively. These programs provide for a partial federal subsidy of interest due
on such bonds, subject to federal funding availability.
The bonds are direct and general obligations of AEA and the full faith and credit of AEA are pledged to pay
principal and interest on the bonds. Payment of the bonds is secured by a pledge of revenues of the project,
including all payments to be made by power purchasers under the Agreement for the Sale and Purchase of
Electric Power by and among named powers purchasers and AEA. Under the Power Sales Agreement (PSA), the
power purchasers are obligated to make payments to AEA in an aggregate amount sufficient to pay annual
project costs, including debt service on all outstanding bonds.
Under the terms of the Bond Resolution, as additional security for repayment of the bonds, a capital reserve
fund has been established in an amount equal to the capital reserve fund requirement. The capital reserve fund
is supported by the moral obligation of the State of Alaska. In the event amounts are drawn from the capital
reserve fund to pay debt service on the bonds the Authority is to certify in writing to the Governor and the State
42
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
Legislature the sum required to restore the capital reserve fund to the capital reserve requirement. The State
Legislature may, but is not obligated to, appropriate to the Authority the sum certified by the Chair of the board
of the Authority necessary to restore the capital reserve fund to the capital reserve fund requirement.
The Fourth Series Bonds are further secured by bond insurance.
All Bradley Lake bonds above were issued under the Alaska Energy Authority Power Revenue Bond Resolution
(Bond Resolution). Events of Default under the Bond Resolution include:
•Late payment or non-payment of principal or Redemption Price (as defined in the Bond Resolution)
whether at maturity or upon call for redemption.
•Late payment or non-payment of interest or on the unsatisfied balance of any sinking fund installment.
•Non-performance or non-observance of any of the other covenants, agreements, or conditions in the
Bond Resolution or in the Bonds, and such default continues for 60 days after written notice to the
Authority by the Trustee or to the Authority and the Trustee by the Holders of not less than 25% in the
principal amount of the outstanding bonds.
•Dissolution or liquidation of the Authority or filing by the Authority of a voluntary petition in bankruptcy,
or the commission by the Authority of any act of bankruptcy, or adjudication of the Authority as bankrupt,
or assignment by the Authority for the benefit of its creditors, or the entry by the creditors, or the
approval by a court of competent jurisdiction of a petition applicable to the Authority in any proceedings
for its reorganization instituted under the provisions of the federal bankruptcy act, as amended, or under
any similar act in any jurisdiction effective now or in the future.
•If an order or decree is entered with the consent or acquiescence of the Authority, appointing a receiver(s)
of the Bradley Lake Project, in whole or part, or of the Bradley Lake Project rents, fees, charges or other
Revenues therefrom (as defined in the Bond Resolution). If the order or decree is entered without the
consent or acquiescence of the Authority and is not vacated or discharged or stayed within 90 days after
the entry.
•If a judgment for the payment of money shall be rendered against the Authority resulting from the
construction, improvement, ownership, control or operation of the Bradley Lake Project, and the
judgment is not discharged within 90 days, or an appeal or decree to set aside or stay the execution or
levy of the judgment is not filed in such manner as to set aside or stay the execution of or levy under such
judgment, or order, decree or process or the enforcement thereof.
In the Event of Default, the Authority shall pay over or cause to be paid over to the Trustee (i) all moneys,
securities and funds then held by the Authority in any Fund or Account under the Bond Resolution, and (ii) all
Revenues (as defined in the Bond Resolution) as promptly as practicable after receipt. During the continuance of
an Event of Default, per the Bond Resolution the Trustee shall apply funds in the following order:
•Expenses of fiduciaries
•Operating expenses
•Principal, redemption, and interest payments
43
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
Additionally, AEA has covenanted to notify the State Legislature of any failure to maintain the capital reserve
fund at its required level. If the capital reserve fund is less than the required level the State Legislature may
appropriate funds (but not legally bound) to bring the capital reserve to the required level. Under the Alaska
Constitution, appropriations passed by the State Legislature are subject to line item veto by the Governor.
The arbitrage interest payable is due to the U.S. Treasury for the excess of investment income on the proceeds
of each series of AEA’s tax exempt and tax advantaged Bradley Lake bonds over the related interest expense
computed in accordance with Section 148 of the Internal Revenue Code of 1986, as amended. The accumulated
arbitrage interest payable amount is computed each year, and the amount for each series is first due after the
end of the fifth bond year and every five years thereafter. AEA maintains a separate account for each series with
the trustee and each year sets aside a sufficient amount to satisfy the liability.
The minimum payments related to all bonds, for the years subsequent to June 30, 2022, are as follows:
Years Ending June 30,Principal Interest Total
2023 1,604$ 1,869$ 3,473$ 2024 1,613 1,803 3,416 2025 1,621 1,736 3,357 2026 1,630 1,669 3,299 2027 1,638 1,601 3,239 2028-2032 8,337 6,986 15,323 2033-2037 8,612 5,249 13,861 2038-2042 8,497 3,467 11,964 2043-2047 6,873 1,894 8,767 2048-2051 5,499 475 5,974
45,924$ 26,749$ 72,673$
Note 6 - Loans Receivable
The Authority administers the Power Project Fund Loan Program. Loans outstanding at June 30, 2022 are
classified as follows (in thousands):
Number of
Loans Amount
Power Project Fund Loan Programs 15 27,535$
Less allowance for loan loss (477)
27,058$
Loans more than 90 days past due are not included in the accrual of interest. At June 30, 2022, there were no
loans more than 90 days past due.
44
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
An analysis of changes in the allowance for loan losses for the years ended June 30, 2022 follows (in thousands):
Balance at beginning of year 494$
Provision for loan loss (recovery)(17)
Balance at end of year 477$
On September 30, 2010, the Authority sold a portion of its Power Project Fund loan portfolio to AIDEA. Under
the agreement, upon AIDEA’s request, AEA is required to repurchase any loan upon a payment default. On
June 30, 2022, the outstanding principal balance of the loans sold was $2,795,000 for which AEA has recognized
an estimated liability for potential repurchase of $56,000.
Note 7 - Fund Balance
Fund balances reported in the aggregate on the governmental fund balance sheet are subject to the following
constraints (in thousands):
Restricted by Restricted by
External Parties Legislation
Power Cost Equalization Program -$ 960,388$ Renewable Energy Grant Fund - 19,693 Emerging Energy Technology Fund - 979 Trans-Alaska Pipeline Liability Fund 922 - Power Development Fund - 272 Rural Energy Projects - 12
922$ 981,344$
Note 8 - Risk Management
AEA is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets; errors and
omissions; and natural disasters. AEA covers that risk through the purchase of commercial insurance and
participation in the State’s Risk Management Pool. The Risk Management Pool administers a self-insurance
program for each State agency, which covers all sudden and accidental property and casualty claims. Annual
assessments allocated by Risk Management are the maximum each agency is called upon to pay, forestalling the
need for supplemental appropriation or disruption of vital state services after a major property loss, adverse civil
jury award, or significant workers compensation claim.
45
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Financial Statements
June 30, 2022
Note 9 - Related Parties
Alaska Industrial Development and Export Authority
Pursuant to understandings and agreements between AIDEA and AEA, AIDEA provides administrative,
personnel, data processing, communications, and other services to AEA. AEA has a Board approved borrowing
agreement with AIDEA to provide short-term working capital funds up to a maximum of $7,500,000.
As of June 30, 2022, AEA recognized expenses for services from AIDEA in the amount of $5,473,000. In addition,
AEA had $4,032,000 payable to AIDEA for services and borrowings, which are included in accounts payable.
As a result of implementing GASB Statement No. 68, Accounting and Financial Reporting for Pensions, AIDEA
recorded a net pension liability. Additionally, as a result of implementing GASB Statement No. 75, Accounting
and Financial Reporting for Postemployment Benefit Plans Other than Pensions, AIDEA recorded a net liability for
other postemployment benefits. AEA’s annual payments to AIDEA for personnel services supporting AEA
activities includes a Public Employees’ Retirement System contribution component. Payments to AIDEA for
personnel services supporting AEA activities comprise over half of AIDEA’s personnel costs.
Alaska Intertie Management Committee
AEA is party to agreement with utilities (GVEA, MEA, and CEA) using the Alaska Intertie for wheeling of electrical
power. Pursuant to the Intertie Agreement, the IMC was established to manage the system. The IMC is
comprised of a representative from AEA and each of the utilities. AEA is reimbursed for operation and
maintenance costs on a monthly basis with an annual settlement to adjust the payments to actual costs. AEA
received $222,000 during fiscal year 2022 for administrative services.
Bradley Lake Project Management Committee
On December 7, 1987, AEA entered into a Power Sales Agreement (PSA) with utilities (GVEA, MEA, CEA, HEA,
and City of Seward) purchasing electric power produced by the Bradley Lake Hydroelectric Project. In 1988,
legislation was passed which made the PSA effective. Pursuant to the PSA, the Bradley Lake Hydroelectric
Project Management Committee (BPMC) was formed to manage the project. The BPMC is comprised of a
representative from AEA and each of the utilities. The participating utilities make monthly payments directly to
the bond trustee based on their respective percentage share of the estimated annual project costs. AEA has an
agreement with the BPMC to provide administrative services to the Bradley Lake Project, Battle Creek, and the
SSQ Line and received $464,000 for these services.
Note 10 - Commitments and Contingencies
In the normal course of business, AEA also has various commitments, such as commitments for the extension of
credit and award of grants. At June 30, 2022, AEA had Power Project Fund loan commitments of $7,788,000.
At June 30, 2022, AEA had cumulative prior year commitments from grant awards that are funded by State
appropriations and federal awards; the amounts committed were $35,958,000.
eidebailly.com
Supplementary Information
June 30, 2022
Alaska Energy Authority
(A Component Unit of the State of Alaska)
See Independent Auditor’s Report 46
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule 1 – Bradley Lake Hydroelectric Project Trust Account Activities
(in thousands)
Year Ended June 30, 2022
Excess Renewal and
Capital Renewal and Investment Operating Revenue and Contingency Operating
Construction Debt Service Reserve Contingency Earnings Revenue Operating Reserve Operating Reserve Reserve
Fund Fund Fund Reserve Fund Fund Fund Fund Account Fund Fund Account Total
Balance at July 1, 2021 1,979$ 13,411$ 15,597$ 1,070$ 112$ 3,524$ 1,654$ 1,269$ -$ -$ -$ 38,616$
Interest received - 217 420 41 4 150 38 42 7 2 2 923
Bond principal paid - (23,451) - - - - - - - - - (23,451)
Bond interest paid - (2,924) - - - - - - - - - (2,924)
Arbitrage paid - -- - (390) - - - - - - (390)
due to utilities - -- - - 1,587 - - - - - 1,587
Operating budget surplus paid - -- - - 1,089 - - (727) (290) - 72
Operating budget surplus paid - -- - - (2,140) - - - - - (2,140)
Capital expenditures (11) - - - - (1,254) (49) - 209 (895) - (2,000)
Operating revenue received - -- - - 5,815 - -8,109 - -13,924
Operating expenses paid - -- - - -(850) - (5,669) - -(6,519)
Transfers between funds - 15,324 (11,871) (1,111) 274 (6,982) 490 (1,142) 1,538 2,215 1,265 -
Balance at June 30, 2022 1,968$ 2,577$ 4,146$ -$ -$ 1,789$ 1,283$ 169$ 3,467$ 1,032$ 1,267$ 17,698$
See Independent Auditor’s Report 47
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule 2 – Special Revenue Fund – Projects and Programs – Balance Sheet
(in thousands)
June 30, 2022
Renewable Emerging Trans Alaska Volkswagen
Power Cost Energy Energy Pipeline Rural Diesel Power
Equalization Grant Technology Liability Energy Settlement Development
Program Fund Fund Fund Projects Fund Fund Totals
Assets
Current assets
Restricted cash and cash equivalents 14,877$ 3,893$ 984$ 964$ 218$ 1,076$ 13,933$ 35,945$
Operating receivable - 8 - - 117 - 42 167
Due from Federal Government - -- - 4,424 - -4,424
Due from State of Alaska - -- - 110 - 506 616
Due (to) from other funds/internal balances - -- - 413 - 201 614
Total current assets 14,877 3,901 984 964 5,282 1,076 14,682 41,766
Noncurrent assets
Restricted investments 957,488 21,122 - - - - - 978,610
Total assets 972,365$ 25,023$ 984$ 964$ 5,282$ 1,076$ 14,682$ 1,020,376$
Liabilities and Fund Balance
Current liabilities
Due to the State of Alaska 252$ 4,751$ 4$ -$ (951)$ -$ 12,491$ 16,547$
Due to State of Alaska's component units - - - - 4,257 - - 4,257
Accounts payable 11,502 406 - - 2,509 970 1,919 17,306
Due to (from) other funds/internal balances 223 173 1 42 (545) 106 - -
Total liabilities 11,977 5,330 5 42 5,270 1,076 14,410 38,110
Fund Balance
Restricted by agreements with external parties - - - 922 - - - 922
Restricted by legislation 960,388 19,693 979 - 12 - 272 981,344
Total fund balance 960,388 19,693 979 922 12 - 272 982,266
Total Liabilities and Fund Balance 972,365$ 25,023$ 984$ 964$ 5,282$ 1,076$ 14,682$ 1,020,376$
See Independent Auditor’s Report 48
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule 3 – Special Revenue Fund – Projects and Programs – Statement of Revenues, Expenses, and Changes in Fund Balance
(in thousands)
Year Ended June 30, 2022
Renewable Emerging Trans Alaska Volkswagen
Power Cost Energy Energy Pipeline Rural Diesel Power
Equalization Grant Technology Liability Energy Settlement Development
Program Fund Fund Fund Projects Fund Fund Totals
Operating revenues
State of Alaska appropriations -$ -$ -$ -$ 4,290$ -$ -$ 4,290$
Federal grants - - 12 - 10,199 - - 10,211
Other revenues - - - - 877 1,615 - 2,492
Total operating revenues - - 12 - 15,366 1,615 - 16,993
Operating expenditures
Grants and projects - 1,226 33 171 15,421 1,387 - 18,238
Power cost equalization grants 24,222 - - - - - - 24,222
General and administrative 1,722 561 4 19 2,456 228 - 4,990
Total operating expenditures 25,944 1,787 37 190 17,877 1,615 - 47,450
Nonoperating revenues (expenses) and other
Investment income, net (143,837) (309) - 2 - - - (144,144)
Interfund capital grants and contributions (2,498) (13) - - 2,511 - - -
State of Alaska appropriations and transfers (12,395) - - - - - - (12,395)
Total nonoperating revenues (expenses) and other (158,730) (322) - 2 2,511 - - (156,539)
Change in Fund Balance (184,674) (2,109) (25) (188) - - - (186,996)
Fund Balance, Beginning of Year 1,145,062 21,802 1,004 1,110 12 - 272 1,169,262
Fund Balance, End of Year 960,388$ 19,693$ 979$ 922$ 12$ -$ 272$ 982,266$
See Independent Auditor’s Report 49
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule 4 – Business-Type Activities – Enterprise Fund –Projects and Programs – Statement of Net Position
(in thousands)
June 30, 2022
Susitna-Power
Bradley Lake Alaska Watana Power Development and
Hydroelectric Intertie Hydroelectric Project Railbelt Energy
Project Project Project Fund Projects Totals
Assets
Current assets
Restricted cash and cash equivalents 17,561$ 1,335$ -$ 12,544$ 2,510$ 33,950$
Operating receivable - 267 - - - 267
Loans receivable - -- 482 - 482
Accrued interest receivable - -- 47 - 47
Due from State of Alaska's component units - -- 113 - 113
Due (to) from other funds/internal balances (357) (153) - (104) - (614)
Total current assets 17,204 1,449 - 13,082 2,510 34,245
Noncurrent assets
Loans receivable, net of allowance - - - 26,576 - 26,576
Capital assets, net of accumulated depreciation 188,297 13,328 183,682 - - 385,307
Total noncurrent assets 188,297 13,328 183,682 26,576 - 411,883
Total Assets 205,501$ 14,777$ 183,682$ 39,658$ 2,510$ 446,128$
See Independent Auditor’s Report 50
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule 4 – Business-Type Activities – Enterprise Fund – Projects and Programs – Statement of Net Position
(in thousands)
June 30, 2022
Susitna-Power
Bradley Lake Alaska Watana Power Development and
Hydroelectric Intertie Hydroelectric Project Railbelt Energy
Project Project Project Fund Projects Totals
Liabilities and Net Position
Liabilities
Current liabilities
Due to the State of Alaska 78$ (4)$ -$ -$ 617$ 691$
Due to local governments 109 1 - - (11) 99
Accounts payable 5,156 1,456 - - 182 6,794
Bonds payable – current portion 1,605 - - - - 1,605
Accrued interest payable 952 - - - - 952
Total current liabilities 7,900 1,453 - - 788 10,141
Noncurrent liabilities
Bonds payable – noncurrent portion, net 44,320 - - - - 44,320
Other liabilities - - - 56 - 56
Total noncurrent liabilities 44,320 - - 56 - 44,376
Total liabilities 52,220 1,453 - 56 788 54,517
Net Position
Net investment in capital assets 142,373 13,328 183,682 - - 339,383
Restricted for capital projects 1,969 - - - - 1,969
Restricted for debt service 5,771 - - - - 5,771
Restricted by agreements with external parties 3,168 - - - - 3,168
Restricted by legislation - - - 39,602 1,722 41,324
Unrestricted - (4) - - - (4)
Total net position 153,281 13,324 183,682 39,602 1,722 391,611
Total Liabilities and Net Position 205,501$ 14,777$ 183,682$ 39,658$ 2,510$ 446,128$
See Independent Auditor’s Report 51
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule 5 – Business-Type Activities – Enterprise Fund – Projects and Programs – Statement of Revenues, Expenses, and Changes in Net Position
(in thousands)
Year Ended June 30, 2022
Power
Bradley Lake Alaska Susitna-Watana Power Development and
Hydroelectric Intertie Hydroelectric Project Railbelt Energy
Project Project Project Fund Projects Totals
Operating revenues
State of Alaska appropriations -$ 171$ -$ -$ -$ 171$
Revenue from operating plants 11,798 1,709 - - - 13,507
Interest on loans - - - 346 - 346
Other revenues - 1 - 152 - 153
Total operating revenues 11,798 1,881 - 498 - 14,177
Operating expenses
Depreciation 10,806 1,499 - - - 12,305
General and administrative 767 76 - 486 - 1,329
Plant operating 5,819 2,015 - -- 7,834
Provision for loan loss (recovery)- - - (17) - (17)
Total operating expenses 17,392 3,590 - 469 - 21,451
Operating Income (Loss)(5,594) (1,709) - 29 - (7,274)
Nonoperating revenues (expenses) and other
Investment income, net 14 2 - 19 - 35
Interest expense (1,568) - - - - (1,568)
Total nonoperating revenues (expenses)
and other (1,554) 2 - 19 - (1,533)
Change in Net Position (7,148) (1,707) - 48 - (8,807)
Fund Balance, Beginning of Year 160,429 15,031 183,682 39,554 1,722 400,418
Fund Balance, End of Year 153,281$ 13,324$ 183,682$ 39,602$ 1,722$ 391,611$
See Independent Auditor’s Report 52
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule 6 – Capital Assets Presented under Federal Energy Commission Requirements (Unaudited)
(in thousands)
June 30, 2022
Balance at Balance at
July 1, 2021 Additions Deletions June 30, 2022
Capital assets
Intangible 183,696$ -$ -$ 183,696$
Production 321,175 1,205 - 322,380
Transmission 206,047 251 - 206,298
General 5,624 77 - 5,701
Total capital assets 716,542 1,533 - 718,075
Less accumulated depreciation
Intangible (6) (1) - (7)
Production (156,503) (8,426) - (164,929)
Transmission (158,518) (3,832) - (162,350)
General (5,436) (46) - (5,482)
Total accumulated
depreciation (320,463) (12,305) - (332,768)
Capital assets, net 396,079$ (10,772)$ -$ 385,307$
See Independent Auditor’s Report 53
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule 7 – Bradley Lake Historical Annual Project Cost (Unaudited)
(in thousands)
Year Ended June 30, 2022 and 2021
As of As of
Operating Data June 30, 2021 June 30, 2022
Project costs
Operations and maintenance 3,767$ 4,166$
Repairs 280 229
General and administrative 922 1,204
Insurance 708 1,216
Capital purchases 268 315
Contributions to capital reserve fund 107 1
Contributions to renewal and contingency fund
and operating reserve account 2,590 2,265
8,642 9,396
Debt service 14,584 15,540
Less Federal interest subsidy (1,132) (1,089)
Less investment income 1,622 (597)
Total cost of power 23,716$ 23,250$
See Independent Auditor’s Report 54
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule 8 – PCE Endowment Fund Historical Analysis (Unaudited)
(in thousands)
Last Ten Fiscal Years
FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022
Beginning cash and investment balance 751,780$ 840,215$ 977,867$ 969,389$ 946,939$ 1,023,566$ 1,073,378$ 1,072,825$ 1,078,157$ 1,149,165$
Inflows
Annual investment earnings 111,488 171,112 33,192 8,912 112,331 76,602 74,142 48,303 150,299 (143,842)
Total inflows 111,488 171,112 33,192 8,912 112,331 76,602 74,142 48,303 150,299 (143,842)
Outflows
Transfers to AEA for PCE payments (1)(22,527) (32,773) (41,002) (30,622) (34,956) (25,595) (29,719) (27,000) (28,237) (24,000)
Transfers to Other Funds - - - - - - (44,000) (14,867) (49,164) (12,140)
Program administration - AEA (198) (241) (248) (255) (243) (624) (444) (575) (737) (602)
Administrative fee - Regulatory
Commission (90) (110) (107) (100) (112) (113) (102) (108) (123) (135)
Management fee - Department of
Revenue (238) (336) (313) (385) (393) (458) (430) (421) (1,030) (1,030)
Total outflows (23,053) (33,460) (41,670) (31,362) (35,704) (26,790) (74,695) (42,971) (79,291) (37,907)
Ending cash and investment balance 840,215$ 977,867$ 969,389$ 946,939$ 1,023,566$ 1,073,378$ 1,072,825$ 1,078,157$ 1,149,165$ 967,416$
(1) Final PCE program expenditures reported may vary depending on outstanding PCE payables at June 30, not included in this presentation.
55
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule 9 – Supplementary Organization and Project Information (Unaudited)
June 30, 2022
Organization and Operations
Throughout the 1980’s, Alaska Energy Authority (AEA or Authority) worked to develop the State’s energy
resources as a key element in diversifying Alaska’s economy. A number of large-scale projects were constructed;
four of those projects were sold in 2002 and one was transferred to the City of Larsen Bay in the fall of 2010. The
Bradley Lake Hydroelectric project provides some of the least expensive electric energy to the Railbelt. The
Alaska Intertie provides for connection and movement of power north or south to increase reliability and allow
Interior Alaska to obtain less expensive electric energy available from the Southcentral portion of the state.
Pursuant to statute, on August 12, 1993, the Board of the Alaska Industrial Development and Export Authority
(AIDEA), a public corporation and a political subdivision of the State, became the Board of Directors of AEA. AEA
continues to exist as a separate legal entity. The corporate structure and operating assets of AEA were retained,
but the ability to have employees and construct or acquire energy projects was eliminated. Among other things,
AIDEA provides personnel services to AEA. The AEA executive director is an employee of AIDEA, but is separate
and independent and is not subject to supervision by AIDEA’s executive director. There is no commingling of
funds, assets, or liabilities between AIDEA and AEA, and there is no responsibility of one for the debts or the
obligations of the other. Consequently, the accounts of AIDEA are not included in the accompanying financial
statements. The Legislature, in 1993, required AEA, to the maximum extent feasible, to enter into contracts with
public utilities and other entities to carry out AEA duties with respect to the ongoing operation and maintenance
of the AEA owned operating assets; this has occurred with oversight responsibility retained by AEA.
Rural energy programs previously administered by the former Department of Community and Regional Affairs,
Division of Energy, were transferred to AEA for administration, as part of a larger reorganization of State
agencies. These rural energy programs were originally part of AEA prior to the 1993 reorganization. During fiscal
year 2009, legislation added energy development programs to AEA.
The Alaska Legislature empowered AEA to acquire a Susitna River power project under AS 44.83.080 (18),
effective July 1, 1999. Effective July 14, 2011, the legislature empowered AEA to acquire, construct, own, and
operate a hydroelectric project located on the Susitna River. Under this legislative authorization, AEA worked on
planning, designing, and Federal Energy Regulatory Commission (FERC) licensing of the Susitna-Watana
Hydroelectric Project. Pursuant to Administrative Order No. 271, AEA advanced the licensing process through
FERC’s issuance of an updated Study Plan Determination on the environmental studies completed through 2015
and the licensing effort is currently in abeyance.
Bradley Lake Hydroelectric Project
The project has 120 Megawatts (MW) of installed capacity and transmits its power to the State’s main power
grid via two parallel 20–mile transmission lines. The project, which cost in excess of $300 million, went into
commercial operation in 1991. Homer Electric Association now operates the project under contract with AEA.
Bradley Lake serves Alaska’s Railbelt from the Kenai Peninsula to Fairbanks, as well as the Delta Junction area.
56
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule 9 – Supplementary Organization and Project Information (Unaudited)
June 30, 2022
In September 2016, the Authority received an amendment to the FERC license for a diversion of West Fork
Upper Battle Creek into Bradley Lake. The diversion will increase the Bradley Lake Hydroelectric Project annual
energy output by approximately 37,000 Megawatt hours (MWh). The Battle Creek project addition includes
construction of three miles of road, a concrete diversion dam, and a pipe and canal to convey the water to
Bradley Lake. The estimated cost of construction is approximately $47.2 million. Construction began in 2018 and
was completed in October 2020.
In December 2020, the Authority closed on the purchase of the SSQ Line, which issued bonds in the amount of
$17,000,000. Purchase of the SSQ Line is in support of the Bradley Lake Hydroelectric Project. In June 2022, the
Authority applied $10.9 million as an early prepayment to pay down the debt service.
In April 2022, the Authority filed an Initial Consultation Document with FERC for a diversion of the Dixon Glacier
outlet stream to Bradley Lake. AEA is performing studies and investigating the feasibility of this project to
significantly increase Bradley Lake Project annual energy.
Alaska Intertie Project
The Alaska Intertie is a 170–mile transmission line designed for 345kV and operated at 138kV. It runs between
Willow and Healy and interconnects the electric utilities in the Southcentral region with Fairbanks area electric
utilities. The Intertie Management Committee (IMC) and AEA manage the Alaska Intertie according to the terms
and conditions of the Alaska Intertie Agreement. AEA contracts with the following utilities for operations and
maintenance: Golden Valley Electric Association (GVEA) in Fairbanks, and Southcentral Alaska utilities, Chugach
Electric Association (CEA) and Matanuska Electric Association (MEA) (Participating Utilities). The Intertie reduces
the number of black/brownouts throughout the system by enabling power to move either north or south when
major system disturbances occur. The Intertie enables GVEA to purchase low cost power from Southcentral
utilities and allows Southcentral Alaska utilities to purchase power from Fairbanks during power shortages. It
also enables GVEA to receive power generated by the Bradley Lake Project, which is some of the lowest priced
power in the Railbelt region.
The Intertie Management Committee (IMC) and AEA manage the activities of the Alaska Intertie project under
the terms and conditions of the Second Amended and Restated Intertie Agreement (Agreement) executed on
March 11, 2014. AEA contracts with certain Participating Utilities for operations and maintenance. The
Agreement improves the reliability of the interconnected electrical systems, outlines how the transfer over the
Intertie of electrical capacity and energy among the participants will occur, and establishes the IMC. The IMC’s
primary responsibility is to provide governance, control, operation, maintenance, repair, and improvement to
the Intertie, subject to AEA’s oversight. The IMC is comprised of a representative from AEA and each of the
Participating Utilities.
57
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule 9 – Supplementary Organization and Project Information (Unaudited)
June 30, 2022
Susitna-Watana Hydroelectric Project
Starting in 2010, AEA conducted preliminary planning and conceptual design for a large hydroelectric project to
be built in the Railbelt Region. A number of hydroelectric generation alternatives were studied and AEA issued a
Preliminary Decision Document selecting what is now known as the Susitna-Watana Hydroelectric Project as the
primary large hydroelectric project for the State to pursue.
The proposed Susitna-Watana Hydroelectric Project would be located approximately half-way between
Anchorage and Fairbanks on the upper Susitna River. The Susitna-Watana dam would be located within a steep-
sided valley of the Susitna River below Watana Creek at River Mile 184, approximately 22 miles upstream of the
Devil's Canyon rapids.
The project would include a single roller compacted concrete dam with a height providing nominal crest
elevation at 2,050 feet mean sea level with a 23,546 acre, 42.5-mile long reservoir with an average width of one
to two miles. The height of the dam was determined to be 705 feet tall during the engineering feasibility studies.
The powerhouse, dam, and related facilities would be linked by transmission lines connecting the project to the
Alaska Intertie. The project would produce about 50% of the Railbelt's electrical demand or an annual average of
2,800,000 MWh.
AEA filed a Notice of Intent and Pre-Application Document with the FERC to begin the licensing process for the
project in December 2011. The FERC approved 58 environmental study plans in early 2013. In implementing the
study plans, AEA worked closely with the Alaska Department of Fish and Game in conducting the fishery and
wildlife studies. On June 3, 2014, AEA filed the Initial Study Report (ISR) for the project. The approximately 7,000
page ISR presents information collected from the first year of field studies.
The Alaska Legislature has appropriated a total of $192 million for AEA to plan, design, and obtain a FERC permit
for the project. On December 26, 2014, Governor Bill Walker of Alaska (Governor Walker) issued Administrative
Order 271 suspending discretionary spending on the project. On January 8, 2015, the FERC granted AEA’s
request to hold the licensing process in abeyance. On July 6, 2015, Governor Walker’s office authorized AEA to
proceed with the Integrated Licensing Process (ILP) using previously appropriated funds. AEA, in August 2015,
requested the FERC’s permission to resume the licensing efforts. On August 4, 2016, Governor Walker issued a
letter to FERC requesting to proceed with the ILP to the point of issuing an updated Study Plan Determination
(SPD) to preserve the State of Alaska’s investment in the project. On August 26, 2016, FERC responded to the
Governor’s letter stating that FERC will proceed with the ILP to complete the SPD. After issuing the SPD, the
project will be put into abeyance as requested by the Governor.
58
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule 9 – Supplementary Organization and Project Information (Unaudited)
June 30, 2022
On June 22, 2017, FERC issued its Determination on the ISR for Susitna. Overall, it was very favorable to the
State. However, since it was issued more than 100 days beyond the ILP schedule of March 10, 2017, there was
insufficient time within fiscal year 2017 to complete previously authorized scopes of work to complete a
comprehensive analysis of the Determination and revise study reports as needed. AEA requested that a portion
of the Susitna appropriation be extended for 90 days to complete this work and preserve the value of the State’s
investment to the maximum extent possible.
On July 18, 2017, the OMB issued a memo to AEA authorizing the continued spending on the project 90 days
from June 30, 2017. AEA was granted concurrence and authorization to spend necessary funds in order to
proceed to the point where the State’s investment, to date, is preserved and the project was put in abeyance.
The work was completed, and all remaining contracts were terminated September 30, 2017. The remaining
funds, approximately $1,893,000, were returned to the State in fiscal year 2019.
As of June 30, 2022, the annual evaluation concluded there was no impairment of the costs capitalized relating
to the Susitna-Watana Hydroelectric Project. An indicator of impairment cited under GASB 51 paragraph 18 is
“development stoppage”, which did not occur. Work on the project was completed and the licensing project is
in abeyance. Looking ahead, and to the extent the project proposal does not change and the data gathered
remains representative of current conditions, FERC ruled that AEA would not need to repeat the already
completed Integrated Licensing Process (ILP) steps.
eidebailly.com
Federal Awards Reports in Accordance
with the Uniform Guidance
June 30, 2022
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Table of Contents
June 30, 2022
Compliance Section
Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other
Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing
Standards ................................................................................................................................................................... 1
Independent Auditor's Report on Compliance for Each Major Federal Program; Report on Internal Control
Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform
Guidance .................................................................................................................................................................... 3
Schedule of Expenditures of Federal Awards ............................................................................................................ 6
Notes to Schedule of Expenditures of Federal Awards ............................................................................................. 8
Schedule of Findings and Questioned Costs .............................................................................................................. 9
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1
Independent Auditor’s Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
To the Board of Directors
Alaska Energy Authority
Anchorage, Alaska
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities and each major fund of Alaska Energy Authority, which comprise
the statement of financial position as of June 30, 2022, and the related statements of activities, and cash
flows for the year then ended, and the related notes to the financial statements, and have issued our
report thereon dated December 22, 2022.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered Alaska Energy
Authority's internal control over financial reporting (internal control) as a basis for designing audit
procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the
financial statements, but not for the purpose of expressing an opinion on the effectiveness of Alaska
Energy Authority's internal control. Accordingly, we do not express an opinion on the effectiveness of
Alaska Energy Authority's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the entity’s financial statements will not be prevented or detected and corrected on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that have not been identified.
2
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether Alaska Energy Authority's financial statements
are free from material misstatement, we performed tests of its compliance with certain provisions of
laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the financial statements. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Boise, Idaho
December 22, 2022
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3
Independent Auditor's Report on Compliance for Each Major Federal Program;
Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of
Federal Awards Required by the Uniform Guidance
To the Board of Directors
Alaska Energy Authority
Anchorage, Alaska
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited Alaska Energy Authority’s compliance with the types of compliance requirements
identified as subject to audit in the OMB Compliance Supplement that could have a direct and material
effect on each of Alaska Energy Authority’s major federal programs for the year ended June 30, 2022.
Alaska Energy Authority’s major federal programs are identified in the summary of auditor’s results
section of the accompanying schedule of findings and questioned costs.
In our opinion, Alaska Energy Authority complied, in all material respects, with the compliance
requirements referred to above that could have a direct and material effect on each of its major federal
programs for the year ended June 30, 2022.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America (GAAS); the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States (Government Auditing
Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform
Guidance). Our responsibilities under those standards and the Uniform Guidance are further described
in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of Alaska Energy Authority and to meet our other ethical
responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on
compliance for each major federal program. Our audit does not provide a legal determination of Alaska
Energy Authority’s compliance with the compliance requirements referred to above.
4
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design,
implementation, and maintenance of effective internal control over compliance with the requirements
of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to Alaska
Energy Authority’s federal programs.
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the
compliance requirements referred to above occurred, whether due to fraud or error, and express an
opinion on Alaska Energy Authority’s compliance based on our audit. Reasonable assurance is a high
level of assurance but is not absolute assurance and therefore is not a guarantee that an audit
conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will
always detect material noncompliance when it exists. The risk of not detecting material noncompliance
resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the
compliance requirements referred to above is considered material, if there is a substantial likelihood
that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the
report on compliance about Alaska Energy Authority’s compliance with the requirements of each major
federal program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform
Guidance, we:
•Exercise professional judgment and maintain professional skepticism throughout the audit.
•Identify and assess the risks of material noncompliance, whether due to fraud or error, and design
and perform audit procedures responsive to those risks. Such procedures include examining, on a
test basis, evidence regarding Alaska Energy Authority’s compliance with the compliance
requirements referred to above and performing such other procedures as we considered
necessary in the circumstances.
•Obtain an understanding of Alaska Energy Authority’s internal control over compliance relevant to
the audit in order to design audit procedures that are appropriate in the circumstances and to test
and report on internal control over compliance in accordance with the Uniform Guidance, but not
for the purpose of expressing an opinion on the effectiveness of Alaska Energy Authority’s internal
control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and any significant deficiencies and material weaknesses in
internal control over compliance that we identified during the audit.
Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their
assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance
requirement of a federal program on a timely basis. A material weakness in internal control over
compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such
that there is a reasonable possibility that material noncompliance with a type of compliance
requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A
significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies,
5
in internal control over compliance with a type of compliance requirement of a federal program that is
less severe than a material weakness in internal control over compliance, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the
Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all
deficiencies in internal control over compliance that might be material weaknesses or significant
deficiencies in internal control over compliance. Given these limitations, during our audit we did not
identify any deficiencies in internal control over compliance that we consider to be material
weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal
control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal
control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of
the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
We have audited the financial statements of the governmental activities, the business-type activities,
and each major fund of Alaska Energy Authority as of and for the year ended June 30, 2022, and the
related notes to the financial statements, which collectively comprise Alaska Energy Authority’s basic
financial statements. We issued our report thereon dated December 22, 2022, which contained
unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming
opinions on the financial statements that collectively comprise the basic financial statements. The
accompanying schedule of expenditures of federal awards is presented for purposes of additional
analysis as required by the Uniform Guidance and is not a required part of the basic financial
statements. Such information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial statements.
The information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements
or to the basic financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the schedule of
expenditures of federal awards is fairly stated in all material respects in relation to the basic financial
statements as a whole.
Boise, Idaho
December 22, 2022
See Notes to Schedule of Expenditures of Federal Awards. 6
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2022
Federal Financial
Assistance Pass-Through Amounts
Listing/Federal Entity Identifying Passed-Through
Federal Grantor/Pass-Through Grantor/Program or Cluster Title CFDA Number Number Expenditures to Subrecipients
Department of Agriculture
Direct Award
Wood Utilization Assistance 10.674 35,420$ 17,338$
Wood Utilization Assistance 10.674 122,799 67,000
Wood Utilization Assistance 10.674 17,435 -
Total Department of Agriculture 175,654 84,338
Department of Treasury
Direct Award
COVID-19 Electric Utility Grants 21.027 2,982,141 -
COVID-19 Electric Utility Grants 21.027 99,496 -
Total Department of Treasury 3,081,637 -
Environmental Protection Agency
Direct Award
State Clean Diesel Grant Program 66.040 18,996 12,870
State Clean Diesel Grant Program 66.040 372,349 320,647
State Clean Diesel Grant Program 66.040 8,045 306
Total Environmental Protection Agency 399,390 333,823
Department of Energy
Direct Award
State Energy Program 81.041 2,517 2,179
State Energy Program 81.041 204,603 20,000
State Energy Program 81.041 475,374 40,000
Passed through Washington State University
Energy Efficiency and Renewable Energy, Information Dissemination,
Outreach, Training and Technical Analysis/Assistance 81.117 1,263 -
Direct Award
State Energy Program Special Projects 81.119 48,700 -
Electricity Delivery and Energy Reliability, Research, Development,
and Analysis 81.122 11,754 11,754
Total Department of Energy 744,211$ 73,933$
See Notes to Schedule of Expenditures of Federal Awards. 7
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2022
Federal Financial
Assistance Pass-Through Amounts
Listing/Federal Entity Identifying Passed-Through
Federal Grantor/Pass-Through Grantor/Program or Cluster Title CFDA Number Number Expenditures to Subrecipients
Denali Commission Program
Direct Award
Tatitlek Bulk Fuel Upgrade 90.100 108,762$ 108,845$
Chalkytsik Bulk Fuel Facility Design 90.100 90,251 85,350
START Communities Technical Assistance 90.100 42,109 22,920
Beaver Bulk Fuel Facility Design 90.100 224,657 219,290
Bulk Fuel Operator Training 90.100 226,888 -
Circuit Rider Program 90.100 286,252 -
Gen Set Maintenance and Improvement Program 90.100 48,465 (4,639)
Miscellaneous Small Maintenance and Improvement Project 90.100 492,841 245,452
Power Plant Operator Training 90.100 133,785 -
Twin Hills RPSU #350294 Conceptual Design Report 90.100 1,305 -
Itinerant Utility Training 90.100 51,347 -
RPSU Maintenance and Improvement Program - Statewide 90.100 937,098 720,207
RPSU Inventory and Assessment 90.100 946 -
RPSU Akhiok, Alaska 90.100 17,681 17,681
RPSU Venetie, Alaska 90.100 51,255 21,293
Barge Headers and Fill Lines 90.100 250,170 49,550
Bulk Fuel Storage Facility Upgrade - Nunapitchuk, Alaska 90.100 734,207 712,169
RPSU Napaskiak, Alaska 90.100 77,042 59,049
RPSU Nikolai, Alaska 90.100 150,303 123,671
RPSU Nelson Lagoon, Alaska 90.100 24,814 7,930
RPSU Rampart, Alaska 90.100 287,607 256,370
Bulk Fuel Storage Upgrade - Scammon Bay, Alaska 90.100 21,067 -
Village Energy Efficient Program - Statewide 90.100 200,077 149,513
Bulk Fuel Upgrade - Ekwok, Alaska 90.100 92,649 82,500
Engineering Library 90.100 6,684 -
Craig High School Biomass Project 90.100 601 -
Port Heiden Phase I Electrical Distribution Upgrades 90.100 108,041 74,430
Bulk Fuel Inventory and Assessment 90.100 7,826 -
Remote Power System Upgrade - Rampart 90.100 9,130 6,182
RPSU Nikolai, Alaska 90.100 1,224,069 1,214,295
DOE Littoral Power Systems Hydrokinetic Project 90.100 1,282 -
Total Denali Commission Program 5,909,211 4,172,056
Total Federal Financial Assistance 10,310,103$ 4,664,150$
8
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Notes to Schedule of Expenditures of Federal Awards
Year Ended June 30, 2022
Note 1 - Basis of Presentation
The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity
of Alaska Energy Authority (the Authority) under programs of the federal government for the year ended June
30, 2022. The information is presented in accordance with the requirements of Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the
Authority, it is not intended to and does not present the financial position, changes in net assets, or cash flows
of the Authority.
Note 2 - Summary of Significant Accounting Policies
Expenditures reported in the schedule are reported on the accrual basis of accounting, except for subrecipient
expenditures which are recorded on the cash basis. When applicable, such expenditures are recognized
following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not
allowable or are limited as to reimbursement.
Note 3 - Indirect Cost Rate
The Authority has elected to use the 10% de minimis cost rate.
9
Alaska Energy Authority
(A Component Unit of the State of Alaska)
Schedule of Findings and Questioned Costs
Year Ended June 30, 2022
Section 1 – Summary of Auditor’s Results
Financial Statements
Type of auditor's report issued:Unmodified
Internal control over financial reporting:
Material weaknesses identified?No
Significant deficiencies identified not considered to be material weaknesses?None reported
Noncompliance material to financial statements noted?No
Federal Awards
Internal control over major programs:
Material weaknesses identified?No
Significant deficiencies identified not considered to be material weaknesses?None reported
Type of auditor's report issued on compliance for major programs:Unmodified
Any audit findings disclosed that are required to be reported in
accordance with Uniform Guidance 2 CFR 200.516:No
Identification of major programs:
Federal
Financial
Assistance
Name of Federal Program Listing
Denali Commission Program 90.100
COVID-19 Electric Utility Relief Program 21.027
Dollar threshold used to distinguish between Type A
and type B programs:750,000$
Auditee qualified as low-risk auditee?No
813 W Northern Lights Blvd, Anchorage, AK 99503 Phone: (907) 771-3000 Fax: (907) 771-3044 Email: info@akenergyauthority.org
REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG
RGYAUTHORITY.ORG
MEMORANDUM
TO: Curtis Thayer, Executive Director
FROM: Bryan Carey, P.E., Director of Owned Assets
DATE: January 3, 2023
SUBJECT: Hydroelectric Program Update
Update
Currently eight Renewable Energy Fund (REF) hydroelectric related projects are active. An
additional project, Godwin, is also included in the summary since it would be a significant
project. An update of these Projects and a programmatic summary follows.
Cordova Hydro Storage Assessment Project #7013013
Project would assess multiple potential hydroelectric sites for conventional storage. Funding will
be used for preparing feasibility assessments of sites to best determine future development.
Potential hydro sites were accessed and after a long wait LiDAR and imagery was collected in
October. Initial assessments of sites ongoing.
Funding:
REF funding of $294,642 for feasibility assessments.
Grantee: Cordova Electric Cooperative.
Dixon Diversion Feasibility Project #7014022
Dixon Glacier is located five mile southwest of Bradley Lake (~25 miles from Homer). A small
diversion dam could divert flow to Bradley Lake for storage and generation or to new power
plant located on the lower Martin River.
AEA filed the Initial Consultation Document (ICD) April 27, 2022 with the Federal Energy
Regulatory Commission.
AEA provided draft Study Plans in response to Study Requests and held an
agency/public meeting November 17.
Agencies comments on draft Study Plans are due January 3, 2023.
Studies will occur in 2023 and 2024.
Governor’s budget has $5 million in for Dixon and Godwin hydroelectric Projects.
Funding:
REF funding of $1,000,000 for feasibility.
Grantee: Chugach Electric Association, Inc.
Alaska Energy Authority Page 2 of 4
Fivemile Creek Hydroelectric Project (REF) #7091226
Fivemile Creek Hydroelectric Project consists of permitting, final design, and construction of a
new 250-kW (approximate), run-of-river hydroelectric project located on Fivemile Creek to serve
the community of Chitina.
An updated cost estimate was completed, which caused AEA and its contractor to make a site
visit to meet with Chitina Electric and reassess the project alignment. The project is currently on
hold awaiting team concurrence of which alignment to pursue.
Funding:
REF grant $3.4 million.
Denali Commission grant of $2.88 million.
Grantee: Chitina Electric, Inc.
Godwin Hydroelectric Project (Non-REF)
Godwin Hydroelectric Project is located on Godwin Creek below the Godwain Glacier
four miles east of Seward, Alaska. Melting of the Godwin Glacier has created a late
below the glacier that could have an outlet dam. Storage at the lake, high head to
power plant, high precipitation, and proximity to existing infrastructure would make this
a benefical utility scale project.
Status:
Chugach Electric Association is currently performing feasibility work
Water gauge to be installed in 2023.
Jenny Creek Hydroelectric Project #7014027
Jenny Creek Hydroelectric Project is located approximately 0.75 miles from the boat harbor in
Kake. The proposed project would be a run-of-river project that would provide additional
electrical energy for Kake and support the existing Gunnuk Creek hydroelectric project.
AEA met with IPEC to discuss project scope and budget. Grant agreement routed for signature
and execution.
Funding:
REF funding of $62,368 to complete reconnaissance study.
Grantee: Inside Passage Electric Cooperative (IPEC).
Alaska Energy Authority Page 3 of 4
Nuyakuk River Hydroelectric Project #7014001
Nuyakuk Hydroelectric Project is located NW of Dillingham on the Nuyakuk River. The proposed
project would be a run of river 12 MW capacity project that would provide all the annual
electrical energy for Dillingham and five regional communities (Aleknegik, Koliganek, New
Stuyahok, Ekwok, and Levelock). The project was in abeyance and will resume the FERC licensing
process and design in spring 2022.
NETC held public meetings throughout the region to share project information. NETC filed the
proposed Study Plan with FERC and continued coordination with agencies.
Funding:
REF funding of $2 million for approved studies.
Grantee: Nushagak Electric & Telephone Cooperative.
Thayer Lake (REF) #7050825
Thayer Lake is located on Admiralty Island near Angoon, Alaska west of Juneau in southeast
Alaska.
Construction will be in phases to better match with other grants and save funds by construction
at the same time as Angoon Airport construction (plan 2022). Grantee has prepared and
submitted all applications for permits. The US Forest Service signed the Change Analaysis
(accept design changes from 2009 Special Use Permit) including overhead transmission lines
and modified road route.
Funding:
Grant period of performance ends August 2024.
Partial funding for Phase 1 of construction (site preparation).
o Funds from Denali Commission still awaiting ADOT funds.
Total Construction cost estimate is $25 million.
Unobligated REF funds $4.9 million.
Grantee: Kootznoowoo Incorporated.
Alaska Energy Authority Page 4 of 4
Unga Man Creek Hydroelectric Project #7014035
Unga Man Creek Hydroelectric Project is located approximately 1 mile from False Pass. The
proposed project would be a run-of-river 180 kW project that would provide approximately 80%
of electrical energy for False Pass. This effort will complete final design and permitting.
Reconnaissance and feasibility studies were completed before receiving grant funds and
determined the project is technically, economically, and environmentally feasible.
AEA met with City of False Pass to discuss project scope and budget. Grant agreement routed
for signature and execution.
Funding:
REF funding of $321,000 to complete final design and permitting.
Grantee: Inside Passage Electric Cooperative (IPEC).
Water Supply Creek Hydro Final Design #7013010
Proposed Water Supply Creek Hydroelectric Project would be located near the existing Hoonah
hydroelectric project Gartina Falls. The proposed project would be a run of river 300 kW
capacity project. Design, Business Operating Plan, and land use agreements to be completed by
December 2022. Operational and fuel savings from the project will be shared by all
communities within the Inside Passage Electric Cooperative (IPEC).
During the third quarter of 2022 65% design being worked on by engineering contractors, and
ADF&G continued field work on Water Supply Creek.
Funding:
REF funding of $461,474 for final design.
Grantee: Inside Passage Electric Cooperative.
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Concept Paper
Railbelt Backbone Reconstruction Project (RBR)
Topic Area: Grid Resilience
Applicant: LSI submitting this concept paper on behalf of Matanuska Electric Association
representing The Bradley Lake Project Management Committee (BPMC)
Technical and Business Point of Contact: Brian Hickey, P.E., PMP.
The BPMC is a collaborative group of decision makers that represents all the primary
transmission owners and operators of Alaska’s largest electrical grid (the Railbelt). The BPMC
consists of the following organizations:
1. The State of Alaska dba The Alaska Energy Authority (AEA)
2. Chugach Electric Association Inc., a Central Region cooperative (CEA)
3. Golden Valley Electric Association Inc., a Northern Region Cooperative (GVEA)
4. Homer Electric Association inc., a Southern Region Cooperative (HEA)
5. Matanuska Electric Association inc., a Central Region Cooperative (MEA)
6. The City of Seward Alaska. dba Seward Electric System (SES)
Project Location: All three regions of the Alaska Railbelt electrical system
Area served by
the Railbelt Grid
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Railbelt Backbone Reconstruction
1
Project and Technical Description
Alaska and the nation are at a crossroads. We are at the nexus of the need to develop a fuel-
diverse low-carbon economy and a once in a generation opportunity to invest in infrastructure.
At this intersection, the collective mission of the Railbelt utilities and the State is to build a
resilient, clean, smart, and low-cost electrical grid. The grid of the future supports a fuel-diverse
energy landscape that drives sustainable economic development in the state and ensures the
cost-effective delivery of energy to the consumers of the Railbelt and beyond. The Railbelt
utilities, acting together through the BPMC, have a shared vision: a collaborative future in the
Railbelt in which our communities come together and share resources to strengthen and build a
smart, clean electrical grid that allows our members, our national defense infrastructure, and
the communities adjacent to the Railbelt access to clean low-cost energy resources from any
source.
The Railbelt Backbone Reconstruction (RBR or Project), the subject of this GRIP Topic 1 Concept
Paper, is one of a series of projects that constitute the BPMC’s Grid Modernization and
Resiliency Plan (GMRP or Plan)1. Through the GMRP, there exists an opportunity for a
transformational series of transmission infrastructure improvements estimated to cost ~$2.9 B.
Successful implementation of the GMRP will prepare the Railbelt grid in terms of resiliency and
reliability necessary for the development of a more fuel diverse low carbon reality in Alaska
that can serve as a model for the rest of the United States and the world.
As described throughout this Concept Paper and other subsequent papers, the Railbelt grid is
an isolated2, long-distance, fully functioning, electric grid built on a relatively small scale that
serves nearly three quarters of Alaska’s population with aging infrastructure, inadequate by
traditional industry standards. Through the GRIP, the BPMC recognizes that there is an
opportunity for a successful modernization of the Railbelt grid primed to facilitate
decarbonization of the broader Alaska economy. Due to the diversity within the Railbelt and
scale of the infrastructure, the federal government has an opportunity to utilize the Railbelt
grid as a model to demonstrate both the objectives and vision of the bipartisan Infrastructure
Investment and Jobs Act (IIJA) and other initiatives. The lessons learned from this prototype will
have broad applicability to the larger grids of the contiguous lower forty-eight states.
Discussion on how this project fulfills the GRIP FOA eligibility requirements begins on page nine
of this document.
As discussed more fully in the Community Benefits Plan, the Railbelt region is home to
numerous federally recognized tribes and disadvantaged and underserved communities. There
are over 200 federally recognized tribes in Alaska, many in the Railbelt region, and based on the
2010 census Anchorage was home to the three most culturally diverse census tracts in the US
1 Fundamentally the GMRP consists of three interregional transmission interconnections: 1) Upgrades to the
Railbelt Backbone, the RBR, 2) a second interregional tie between the Southern, Central and Northern Regions and
3) A third interregional tie between the Central Region and Northern Region integrating the Copper River Valley
(currently a stand-alone system) into the Railbelt Grid and providing a second feed into the U.S. Department of
Defense mid-course ground based missile defense system at Fort Greely.
2 The Railbelt is a stand-alone grid not interconnected with any other electric system.
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Railbelt Backbone Reconstruction
2
(followed closely by Queens, New York). One hundred and ten languages are spoken in the
Anchorage School District alone. With this socially and economically diverse makeup, the
Railbelt is the ideal area for the federal government to demonstrate how the benefits of the IIJA
can be maximized.
The Railbelt serves five military bases, as depicted in figure 1, each of which has a vital strategic
importance to national security. These critical bases contribute to the national defense from a
broad range of perspectives including missile defense, global telecommunications downlink
infrastructure, and F-22 high-speed intercept capability. As noted in the White House’s release
of the Indo-Pacific Strategy in February 2022, these defense capabilities are vital to our national
security and prosperity. The GMRP will support the transition of Alaska-based US DoD assets to
a low carbon future.
Figure 1: Military Bases Served by The Railbelt
The Railbelt is essential to the broader state economy. The Port of Alaska, a federally
designated Strategic Seaport, serves as the primary point of entry for virtually all cargo, food,
building materials, and fuel for the vast majority of Alaska’s population. Additionally, Anchorage
International Airport is the fourth busiest international airport in the world in terms of cargo
throughput. The Railbelt is home to significant mining operations, including that of rare earth
minerals critical to the US national security and other strategic imperatives. These assets are
vital to the economy and security of both Alaska and the Nation.
Through the RBR, the Railbelt and the State will experience broad and substantial benefits.
Those benefits include improved regional resiliency to wildfires and other extreme weather
Railbelt Military Bases
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Railbelt Backbone Reconstruction
3
events, reduction in carbon emissions and transmission system losses, increased interregional
transfer capability, integration of renewables and other low carbon generation sources,
facilitation of decarbonized beneficial electrification, and the eventual decarbonization of the
electric grid.
More significantly, this Project and the broader Plan will help lower electric rates throughout
the State. Alaskans pay some of the highest electric rates in the country, which
disproportionately impact the disadvantaged and underserved. Lowering rates on the Railbelt
will in turn help address the high cost of energy in rural Alaska not served by the Railbelt, close
to 30% of the state’s population. This cost is mitigated through the State’s Power Cost
Equalization Program, based in part on the price of Railbelt electricity. The GRIP Program’s
objectives are met and complemented by the BPMC’s goal of a resilient, clean, and low-cost
electrical network that supports sustainable economic development in the region,
decarbonization, and cost-effective delivery of energy.
All of the electric utilities in the Railbelt are electric cooperatives3. Thus, virtually all benefits
from this grid modernization effort flow directly to the member-owners, the residents of the
Railbelt. Effectively, the Railbelt is a proving ground where DOE and other federal agencies can
evaluate and successfully demonstrate transmission resiliency improvements in preparation for
electric decarbonization both technically and on a community basis. Notably, in the Railbelt
electric grid, this can be achieved at a relatively low cost. The RBR project will have full support
and collaborative cooperation of the BPMC project team. This team consists of representatives
of each of the five Railbelt electric utilities4 and the State of Alaska, dba, AEA. The BPMC team
members are committed to the GMRP, subject to governance board approval and vetting
through the National Environmental Policy Act (NEPA) process. The team plans to apply for all
IIJA and Inflation Reduction Act (IRA) applicable federal assistance for GMRP projects. In
addition, the team is seeking State appropriations to augment these federal funds. The GMRP
upgraded grid will create an unrestricted electron freeway and prepare the Railbelt to optimize
the use of cost-effective, low-carbon energy technologies by eliminating current technical and
geographic constraints.
Background
The Railbelt Grid
The Railbelt electric grid is unique in North America as it is technically a fully functioning long-
distance electrical grid on a very small scale. The Railbelt is characterized by three load-
generation regions with four load-balancing areas. These load-balancing areas do not coincide
precisely with the load-generation regions. These load-generation concentrations, known as the
Northern Region (Fairbanks-Delta Junction), the Central Region (Anchorage-MatSu), and
3 Except for the City of Seward-a municipal, public power utility at ~1% of total Railbelt electricity demand.
4 The five Railbelt Electric Utilities consist of Golden Valley Electric Association Inc. in the Northern Region,
Matanuska Electric Association Inc. and Chugach Electric Association Inc. in the Central region and Seward Electric
System and Homer Electric System Inc. in the Southern Region.
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Railbelt Backbone Reconstruction
4
Southern Region (the Kenai Peninsula), are tied together with two long transmission lines
operating at 115kV and 138KV. The grid provides electricity to approximately 70% of the state's
residents and generates 80% of the electricity in Alaska. It extends over 700 miles from the
Bradley Lake Project, located at the head of Kachemak bay near Homer, Alaska, in the Southern
Region, to Delta Junction in Interior Alaska, roughly the distance from Washington, DC to
Atlanta, GA as depicted in figure 2. The grid traverses inhospitable mountainous subarctic
terrain. The region is laced with highly active seismic zones and is subject to volcanic eruptions,
forest fires, flooding, and fierce annual winter storms. The grid's assets vary from high voltage
(138 kV and 230 kV) submarine cable crossings in Cook Inlet5 to remote "helicopter/riverboat -
access-only" river crossings and numerous transmission structures well above 2000 feet.
Figure 2: Alaska’s Relative Size
Unlike numerous areas in the contiguous lower forty-eight states, the Railbelt has received
minimal federal investment in grid development. The Eklutna Hydroelectric Project, initially
constructed in the 1950s, was the last major federal project in the Railbelt that included a
transmission line component. This project was rebuilt by the Bureau of Reclamation's Alaska
Power Administration after the 1964 "Good Friday” Earthquake and sold by the Federal
government to Central Region utilities in the early 1990s.
The Northern Region is marginally interconnected, primarily at 69kv and 138kV. The Central
Region is moderately well interconnected with multiple 230, 138, and 115 kV lines. The
Southern Region is also interconnected at 115 kV, but includes a radial feed to the SES system.
A tight power pool operates in the Central Region, and an active economy energy market exists
but is severely limited by transmission constraints. A reserve-sharing pool exists between all
three regions. Due to the relatively feeble regional interconnections, the Railbelt Grid is
technically characterized as "transient stability limited," with machines under dynamic stress
5 Cook inlet is a silt laden 180-mile inlet reaching from Knik Arm to the Gulf of Alaska. The Inlet has the fourth
highest tidal range in the world at 30.3 feet and contains an endangered subspecies of the Beluga Whale.
Railbelt Grid
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Railbelt Backbone Reconstruction
5
swinging against other machines within the region; and with regions swinging against each
other across the light interregional interconnections. The grid is susceptible to and has
experienced large-scale6 small-signal instability oscillations during the annual nexus of low lake
elevations at Bradley Lake, summer valley load conditions, and faults on the Alaska Intertie
nearly 300 miles north of the Bradley Lake Project.
Voltage stability, which varies from marginal to good depending on the specific area, has been
improved with the addition of six static VAR compensators at critical locations. The Railbelt Grid
operates under a subset of North American Electric Reliability Corporation (NERC) standards
modified to account for the scale and nature of the interconnection (the grid's system bias is
variable and ranges from 3-10 Mw/.1 hertz). In 2024 these standards will become mandatory
and enforceable under a recently formed and certificated Electric Reliability Organization, as
developed through the Railbelt Reliability Council. The grid has a sophisticated under-frequency
load shed scheme which sheds load to match generation in four stages with varying time delays
and, in some cases considering frequency rate-of-change. Traditional day-ahead and real-time
security constrained economic dispatch are run in each LBA with net interchange, and
frequency monitored and managed to NERC CPS 1 and 2. Dynamic events on the grid occur and
resolve very quickly (2-10 seconds) when compared with the much larger North American grids
(the Eastern Interconnection, the Western Interconnection, and ERCOT), which resolve in tens
of minutes. The grid's peak demand is roughly 750 MW compared to ERCOT's (by far the
smallest of the North American interconnections) peak demand of 85,000 MW. The grid's
annual energy consumption is approximately 4,800 GWH compared to ERCOT at 339,000 GWH.
The Railbelt’s Grid Modernization Resiliency Plan (GMRP)
Today, multiple change drivers are reshaping the broader energy landscape in Alaska and across
the world. Geopolitical shifts are dramatically altering global energy markets. Decarbonization
policies and technological advancements, shaped by increasingly dramatic climate change, are
both the result of and contributing to a shift in popular sentiment about energy and the
environment. Regionally, uncertainty around Cook Inlet Natural gas and broader fuel supply
issues for the utilities is a critical – and shared – challenge looming on the near-term horizon.
In response to this shared challenge, the BPMC has come together to develop a broad-based,
long-term plan to ensure the future energy viability of the Railbelt from a social, economic, and
technical perspective. The technical aspect of that Plan is the GMRP, of which the RBR is a
component. This Plan will be incorporated into Alaska’s broader State Energy Security Plan as
that document is developed in the coming months.
6 Oscillations have been measured with a peak of 275MW, a 1.1 sec period and sustained for over 90 seconds on a
grid with a summer valley peak load of approximately 500MW.
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Figure 3: RBR Components in current funding cycle
Figure Three is a graphic representation of the Southern and Central regions of the Railbelt grid
with the current system and the proposed Southern and Central Region GMRP components
overlayed. The Components of the GMRP in these regions that make up the RBR are highlighted
in yellow. A more detailed geographic GMRP effort map with the Plan's component projects,
and estimated costs is available upon request.
Figure Four is a graphic representation of the entire Railbelt with the GMRP overlayed on the
existing system. This Plan is transformational and highly innovative. Given the operational
nature of the Railbelt and the disparate socioeconomic status and vast diversity of its
communities as described below, learnings from this undertaking will be broadly applicable to
the larger grids of the contiguous lower forty-eight states and North America.
Railbelt Backbone Reconstruction Project Federal Assitance Request 2022-2023 2024-27
Southern Region (Kenai Peninsula)and Central Region (Anchorage Mat-Su)$614,000,000 TBD
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Figure 4: Railbelt Grid Modernization and Resiliency Plan (GMRP)
We intend to apply for federal funding assistance for specific GMRP components in each of the
five funding-year periods of the GRIP, IRA, and USDA RUS loan programs. In addition to our
federal funding requests, we are seeking State assistance and the remainder of the total plan
costs will be funded by Railbelt utilities. Our estimated total cost for the GMRP is $2.87B over
fifteen years. Without significant Federal and State investment, the GMRP plan and this Project
are beyond the capabilities of the Railbelt utilities and AEA. The team assembled for this Project
as shown below consists of stakeholder outreach experts, engineers, project managers, and all
the executive-level decision-makers in the Railbelt. The Team will work diligently to integrate
other regional stakeholders into the process.
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The priority in diversifying the Railbelt fuel supply and decarbonizing the Railbelt Grid must be
stabilizing its primary control variable frequency and decongesting the transmission system.
These improvements are required irrespective of the nature of fuel supply diversity and
decarbonization solutions. In 2010 the Railbelt's frequency was equal to 60Hertz approximately
44 % of the time. By 2021, the grid operated at 60Hertz about 17% of the time. The primary
causes of this deterioration of frequency control are the introduction of lighter, more efficient
aero-derivative turbines, efficiency-driven (as opposed to response-driven) plant control
systems, and non-dispatchable renewables in the form of solar and wind generators.
Decongesting the grid will require upgrading existing transmission lines and building a new
transmission interconnection from the Kenai to the Central Region and on to Healy in the
Northern Region. A subsequent phase will include a transmission interconnection from Wasilla
to Glenallen and north to interconnect with the GVEA system at Fort Greely and the Ground-
Based Mid-Course Missile Defense system.
The following table outlines the high-level timeline and associated estimated costs for the
GMRP. The priority and timing of these projects may vary given the outcome of NEPA
processes, the evolving nature of low carbon generation development, and Cook Inlet fuel
supply changes.
The Project
The subject of this concept paper is reconstruction of the Railbelt Backbone Transmission
System, which is made up of a series of transmission line segments that stretch from the
Bradley Lake Hydro Electric Project to Fairbanks and Delta Junction, 700 miles to the north. The
newest of these transmission line segments was constructed in the 2006, with most
constructed in the 1970s and 1980s and some as early as the 1950s and 1960s. For this
application we have selected segments of the RBR which have received formal or informal
regional or interregional approval allowing them to be fast-tracked to design, permitting, and
construction in this funding cycle. In GRIP Topic 2 of this funding cycle, we will be seeking
federal assistance for design and procurement of an interregional battery control system.
Furthermore, in GRIP Topic 3 we will be seeking federal assistance for the interregional ties and
potentially Grid Stabilization batteries.
The total estimated cost for the reconstruction of the line segments and associated station
facilities, proposed in this concept paper, is approximately $615M. On December 2, 2022, the
BPMC, through AEA, closed on a bond package for $166M, 65% of which will be dedicated to
this project and 35% to three regional grid stabilization battery energy storage systems (BESS).
In later funding cycles, we will include other segments of the RBR as study work is completed
Grid Modernization and Resiliency Plan (GMRP)
Decarbonization and Fuel Diversity Transmission Build-Out 2023-2027 2028-2032 2035-2037
Southern Region (Kenai Peninsula) to Central Region (Anchorage Mat-Su) + Energy Storage $934,000,000
Central Region to Northern Region (Fairbanks-Delta Junction) Phase 1 $981,000,000
Central Region to Northern Region Phase 2 and Roadbelt (Wasilla-Glenallen-Delta Junction)$958,000,000
Total Fifteen Year Transmission Spend $2,873,000,000
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and once regional approval is obtained. Finally, we are also seeking State funding assistance7 to
help close the gap between utility funding and federal assistance.
Project Eligibility
The RBR Project will meet eight of the twelve eligibility requirements:
(B) Fire-resistant technologies and fire prevention systems.
Reconstructing the towers to 230kV standards using metal and wood structures with elevated
conductor height that lessen the likelihood of tree contacts and where possible increased ROW
widths that lessen the likelihood of fire impact.
(C) Monitoring and control technologies.
State of the art protection, control and monitoring using dual, line current differential, time-
domain line protection with precise fault location using traveling wave reflectometry, and fiber
and digital microwave communications assisted distance protection schemes. Increased
situation awareness from real-time supervisory control and data acquisition with synchro-
phasor power angle and voltage magnitude at all appropriate busses. Additionally real-time
fault location data telemetered to the control centers.
(E) Utility pole management.
Replacement of existing poles which have exceeded their useful life, as well as, if possible,
relocation of structures out of known avalanche paths. If relocation is not possible, the use of
breakaway conductor attachments, and pole in driven- pile-caisson construction for ease of
replacement where avalanche danger cannot be mitigated.
(F) The relocation of power lines or the reconductoring of power lines with low sag,
advanced conductors.
All circuits are re-framed at 230 kV and reconductored for maximum transfer capability, See E)
above for relocation.
(I) Adaptive protection technologies.
Given the speed with which the events occur and resolve- (electric sub-cycle to single seconds),
the protection systems will include remedial action schemes such as undersea cable load control
and rate of change supervised underfrequency load shed. The integrated BESS systems will
provide adaptive increased transfer capability based on load and generation scenarios.
7The October 26,2022 letter from Railbelt Utility Managers to Alaska Governor Michael Dunleavy is available for
review.
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(K) Hardening of power lines, facilities, substations, of other systems; and
See E) above for powerline hardening, Facilities including communications, substation
constructed to current Critical Infrastructure Protection (CIP) standards and specifically with
respect to this Topic in terms of security and fire resistance.
(J) Advanced modeling technologies.
Advanced Eigenvector/Eigenvalue modeling and analysis will be required to tune the control,
protection, and adaptive control systems for small- signal instability.
(L) The replacement of old overhead conductors and underground cables.
Virtually all conductors being replaced are between 40 and 75 years of age.
Project Grid Benefits
The RBR project will simultaneously reduce losses and increase transfer capability between
regions, although non-firm due to the lack of resiliency provided by second ties between the
three regions8. Increased transfer capability reduces security constrained economic dispatch
(SCED) constraints resulting in a more efficient generation dispatch. Increased transfer
capability combined with reduced losses will reduce overall fuel burn and reduce carbon
emissions. For example, the Bradley Lake Hydro Electric Project, one of the lowest-cost
resources in the Railbelt, is a 120 MW plant that is limited to operation at or below 90MW9
maximum capacity due to transient stability limitations and unacceptable transmission losses.
Losses on energy delivered to Quartz Creek with Bradley Lake at 90MW (2020 Winter Peak
case) are roughly 8%; losses at 120MW (same case) are nearly 11%. When increasing Bradley
output from 110 MW to 120 MW losses increase by 5.6 MW, an incremental 56% increase.
Thus, the RBR will result in lowering fuel burn and reduce carbon emissions both from reduced
losses and the more efficient SCED for all BPMC participants.
Ultimately the RBR project, acting as a component of the larger GMRP, will improve resiliency,
reliability and efficiency and help facilitate the integration of additional non-dispatchable
renewables whether they are located in the Southern, Central or Northern regions.
Project Risk Reduction
DOE investment in the RBR will provide valuable insights for contiguous lower forty-eight states
grid planners and developers specifically with respect to the effect of taller structures,
breakaway conductors, driven-pile-caisson construction, hardened substations, and
8Resiliency in terms of additional ties will be addressed Topic 3 of our GRIP application
9 Except in periods of imminent spill
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communication equipment facilities in harsh winter environments. Investment will also develop
knowledge regarding the effects of improved situational awareness, with respect to power
angles and voltage magnitude at appropriate busses, on system operations performance.
Project DOE Funding Leveraging Outcomes
DOE investment in RBR will unlock State10 and local Cooperative funding for this Project and
subsequent GMRP components. By advancing the GMRP’s cumulative broader impact this
investment will transform the Railbelt transmission grid. This transformation will provide
adequate transmission capability for broad regional participation in renewable and low carbon
generation projects. Broad participation will drive economies of scale, and improve the cost
profile of these projects, effectively easing the rate burden of the Green Premium. The burden
of such rate impacts falls disproportionately on low income and underserved communities.
Thus, the GMRP will facilitate the integration of renewable and low carbon generation
technologies from Homer to Fairbanks through the unrestricted electron freeway.
Project Readiness, Viability, and Expected Timing
As noted above, given the maturity (existing study work and regional approval) of the proposed
RBR segments, these RBR segments can be fast tracked through design permitting and
construction.
10 See October 26th letter from the Railbelt Electric Utility managers to Governor Dunleavy.
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U.S. Department of Energy
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Community Benefits Plan
Railbelt Backbone Reconstruction project presents a unique opportunity to increase reliability,
provide clean energy options, and reduce electricity rates for a 700-mile-long stretch of Alaska
that serves as the state’s economic backbone and is home to approximately two-thirds of the
state’s population. The same Railbelt region includes or is proximate to several Disadvantaged
Communities (DACs), extensive veteran, Pacific Islander, and Alaska Native populations, and
some of the most diverse neighborhoods in the nation. Furthermore, the State of Alaska’s
Power Cost Equalization program extends the financial benefits of lower Railbelt electric rates
to positively impact additional remote communities statewide; even populations not connected
to the Railbelt’s electric network benefit from reduced Railbelt rates.
Having missed out on the federal government’s transformational infrastructure investments
before Alaska statehood, residents of Alaska have long borne outsized infrastructure costs
spread across relatively few homes, businesses, and industries. Alaskans have experienced a
lack of redundancy and infrastructure that would be considered unacceptable in other parts of
the US. Federal support would be a step closer to providing parity to Alaskans, including
numerous DACs as well as tribal entities and rural communities.
BPMC intends to identify project benefits, the anticipated recipients, and metrics to track and
measure the benefits in its Community Benefits Plan (CBP) to meet the federal government’s
four target goals (outlined below). BPMC’s approach to this plan will be stakeholder driven,
involving communities and entities anticipated to become partners through the project
planning, execution and operations stages.
CBP development will benefit from early engagement with potential partners and stakeholders
in order to define measurable project benefits, set workforce goals, and advance formal
partnerships for inclusion in the CBP. Individuals in impacted communities and local institutions
can provide invaluable insight into potential project benefits and outcomes that will inform the
project development and execution. This stakeholder participation is critical up-front to ensure
the project delivers expected benefits that reach the intended communities, while reducing
possible adverse impacts.
Defining the affected stakeholders early, establishing clear, durable communication channels,
receiving their concerns, and crafting measures to address those concerns is critical to
managing project risks and ensuring desired objectives. Clear communication and collaboration
during development of the project application and the CBP will set a foundation for
implementing the CBP during project development, construction, and operations. This
engagement should be a continuous loop through the project design and execution.
Stakeholder engagement is central to the BPMC partners’ regular businesses, with four
member-owned electric cooperatives, a municipally owned utility, and a state entity. BPMC
believes this extensive experience will provide key support in the CBP development and
execution. Early engagement with stakeholders is also expected to further the ability of
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communities, individuals and local governments and tribal entities to unlock additional funding
opportunities tied to the project. To that end, BPMC will develop a robust community benefit
plan around the four FOA elements as detailed below. Across all elements, BPMC’s approach is
founded on the belief that direct, early communication and a meaningful exchange with other
entities and communities will inform CBP development.
Element 1: Community and labor engagement leading to negotiated agreements
BPMC’s utility members have established, long-term, and mutually valued relationships with
the organized labor community in Alaska. The Railbelt utilities have used project labor
agreements in the past for projects of this scale e.g., construction of the Alaska Intertie. Each of
the Railbelt utilities has collective bargaining agreements with the International Brotherhood of
Electrical Workers, among other unions. The BPMC’s approach to the CBP will be to engage its
labor partners early to initiate discussions toward labor agreements. The CBP would establish a
timeline and milestones for negotiations with organized labor, including discussions on local
and targeted hiring goals, card-check neutrality, and possible provisions advancing programs to
attract, train and retain new workers.
As the project proponent, BPMC’s team includes the State of Alaska’s energy organization,
Alaska Energy Authority. The utilities and AEA have a successful record partnering both as
owner/partners in shared capital projects and in advancing State energy goals and priorities.
With State support affirmed in this way, the BPMC’s CBP would prioritize establishing and
formalizing relationships with tribal entities, local governments, and other State of Alaska
departments with a focus on workforce and related issues. Early engagement with these core
stakeholders will also help ensure the project is cognizant of and in support of local energy
plans and goals.
The BPMC as an entity and its utility members individually are accustomed to engaging with
local governments and tribal entities through permitting and regulatory processes for capital
projects. The CBP for this project would establish milestones urging earlier dialogue with local
governments and tribal entities. These conversations should begin sufficiently early to inform
project development in response to local communities’ needs and concerns, and to guide
iterations of the CBP. Local governments and tribal entities are uniquely situated to help
identify the most effective actions the project can take toward partnerships that advance
workforce issues; diversity, equity, inclusion, and accessibility; and the flow of project benefits
to disadvantaged communities.
BPMC members have extensive experience engaging with local residents and businesses in
town halls and similar formats; AEA is a State entity with obligations to the public interest, and
the electric utilities are member-owned cooperatives (one is municipal with direct
responsibilities to the city’s residents). The CBP will articulate a plan and schedule for these
engagements to ensure individuals and businesses are aware of the project, including potential
economic and clean energy opportunities the project could enable, and to receive and
incorporate concerns and input into project development plans.
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Element 2: Investing in job quality and workforce continuity
Given Alaska’s relative isolation and general need for living wage jobs, the BPMC’s members
firmly support the development of workforce training institutions. The stakeholder engagement
articulated above is expected to further inform the project team of workforce issues and
opportunities, including opportunities to partner with existing programs and institutions to
ensure a skilled and inclusive local workforce. Such opportunities would be evaluated for
incorporation into the CBP.
Alaska is not a Right to Work state. The BPMC utilities’ employees who are covered by
bargaining unit agreements are required to join unions consistent with the terms and
conditions of the various utility bargaining unit agreements. Further, the utilities maintain strict
policies fostering safe, healthy, inclusive workplaces free of discrimination and harassment. The
BPMC’s members support continual development of a skilled, inclusive local workforce,
specifically the IBEW-NECA Alaska Joint Electrical Apprenticeship and Training Trust, individual
utility training programs, the University of Alaska System and other technical training programs.
This track record of investment in the Alaskan and American workforce will be reflected in the
CBP.
Utilities will also continue support of STEM and energy literacy programs throughout the state
as an investment in the future pipeline of critical energy-related jobs.
Element 3: Advancing diversity, equity, inclusion, and accessibility
The BPMC’s CBP will identify and evaluate potential actions to advance diversity, equity,
inclusion, and accessibility in relation to the project. Alaska offers significant opportunities to
engage underserved populations, including Alaska Natives, Pacific Islanders, and veterans.
Stakeholder consultation, including with organized labor, is expected to identify potential
workforce partnerships to encourage participation of these and similar communities in the
project.
Element 4: Contributing to the Justice40 Initiative goal that 40% of the overall benefits of
certain climate and clean energy investments flow to disadvantaged communities
As discussed in the beginning of this section, BPMC believes its project presents a unique
opportunity to extend benefits to much of Alaska, including DACs. The initial approach to this
CBP element would be identifying potential partners and establishing relationships to assist in
the plan development. Potential partners may include impacted DACs; State entities such as
Department of Environmental Conservation, Department of Commerce, and Department of
Labor and Workforce Development; academic or public policy/research institutions such as the
University of Alaska, Alaska Center for Energy and Power, and the Institute for Social and
Economic Research (ISER); as well as tribal and non-governmental entities, many of whom have
prioritized affordable, clean energy as strategic priorities.
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BPMC intends to work with partners, stakeholders, and project technical teams to identify
measurable, trackable benefits and determine which benefits are most meaningful to impacted
communities. Engagement with institutional partners will help define disadvantaged
communities within and proximate to the project area, and within the projected reach of the
defined outcomes. Formulation of a stakeholder engagement plan and further consultation
with DACs and other partners could help establish mechanisms to measure and track the
investments and outcomes.
BPMC believes significant benefits can be realized in energy resiliency, reduction of energy and
pollution poverty as well clean energy opportunities throughout the region and state and would
coordinate with partners and stakeholders to quantify these broader benefits within the CBP.
Communities in the project region currently face potentially severe health, safety, and
economic consequences resulting from grid threats such as earthquakes, severe cold weather
events, and large-scale forest fires often in remote areas. Project implementation is also
anticipated to increase clean energy options throughout the region, including DACs and other
rural communities, many of whom are currently powered through coal or diesel-fired
generation.
The project is expected to reduce the potential consequences posed by these risks. The CBP
should also capture the potential benefits of increased opportunities for tying new, clean-
energy projects to the grid, especially smaller-scale projects. Project benefits are anticipated to
include improvements to air quality across the project regions, especially in the Northern
Region and other locations where particulate matter (PM2.5) have risen to non-attainment
levels high enough to trigger remediation efforts through the EPA and concerns are adversely
impacting the economy and human health.
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Addendum A
The Railbelt Utilities and AEA have worked together under the auspices of the BPMC for over 30
years. From constructing the project, which was commissioned in 1992 at a cost of
approximately $350M in 1990 dollars, to the most recent addition to the Project the Sterling to
Quartz 115 kV line. The Project added the Battle Creek Diversion in 2018, a $45M diversion
structure that increased the lake’s energy capacity water by approximately 10 percent. On
December 1, 2022, AEA on behalf of the BPMC closed on a $166M bond package which will be
used to begin the RBR project by upgrading the Soldotna to Quartz section of the 115 kV
Southern Region to Central region Transmission line (aka the Anchorage to Kenai 115kV line).
Thirty-five percent of the bond issue will be used to fund three regional grid stabilization
batteries, one of which has been constructed by HEA and is currently operational.
Our stakeholder outreach, engineering, and project management teams have many decades of
stakeholder outreach, transmission, and generation engineering, construction, and operations
experience. Most of our engineers are registered professional engineers (PE) and several are
also registered project management professionals (PMP). Combined this group has successfully
constructed and commissioned billions of dollars of grid infrastructure as noted in their
qualifications and expertise included below.
Railbelt Regional Coordination
Brian Hickey, Executive Director, Railbelt Regional Coordination
Brian Hickey is the Executive Director of Railbelt Regional Coordination, working for the CEOs of
the five Railbelt Electric Utilities. He has more than 40 years of experience in electric power
systems and telecommunications. His experience includes executive leadership and
management, strategic business planning, economic alternative analysis, engineering, design,
project management, and maintenance process development and implementation. Hickey has
managed numerous generation, transmission and process development and improvement
projects in his career. Hickey holds a Bachelor of Science in Electrical Engineering from Montana
State University, a Master’s certificate in Project Management from ESI/George Washington
University, and a Master’s degree in Global Finance from Alaska Pacific University. He is a
licensed Professional Electrical Engineer and PMI Certified Project Management Professional.
David Burlingame, Principal, Electric Power Solutions Group Inc.
David Burlingame has been involved in the Railbelt planning and system studies for the Railbelt
since 1985. He has led the completion of system operating studies as well as investigations into
reliability and resiliency issues in islanded electrical grids. He has led many studies for the
Railbelt system including the investigation into solving the reasons for the most recent 250 MW
oscillations in the Railbelt and their possible solutions. He has been involved in system studies
and planning for the Railbelt for over thirty years and has experience in the design of
substations, BESS control systems, Remedial Action Schemes and custom modeling required in
highly variable islanded systems such as the Railbelt. Prior to starting his engineering company,
he was involved in utility operations and engineering for 13 years in the Railbelt. He has been a
licensed professional engineer since 1987.
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Alaska Energy Authority (AEA)
AEA’s mission is to “reduce the cost of energy in Alaska.” As Alaska’s lead agency for statewide
energy policy and program development, AEA collaborates with utilities, private companies,
legislators, local governments, and Alaskan energy innovators to diversify the state’s energy
portfolio. On the Railbelt, AEA owns the 120-megawatt Bradley Lake Hydroelectric Project, the
largest in Alaska. AEA recently oversaw the West Fork Upper Battle Creek Diversion
construction, which diverts glacial water from West Fork Upper Battle Creek into Bradley Lake
increasing energy by 10%. In rural Alaska, AEA constructs bulk fuel tank farms, diesel
powerhouses, and electrical distribution grids, and provides technical/community assistance to
rural Alaskans. Our dedicated team of engineers, economists, project managers, loan officers,
and planners help Alaska’s cities, boroughs, utilities, tribal entities, schools, and private
businesses move energy projects forward successfully.
Bryan Carey, Director of Owned Assets, AEA
Bryan Carey has worked more than 20 years on energy projects for the AEA. During that time,
he’s been the project manager for the AEA’s Bradley Lake Hydroelectric Project (Alaska’s largest
Hydro project), Bradley Lake transmission assets, Project Engineer for the Susitna-Watana
Hydroelectric Project, Alaska Industrial Development Export Authority’s (AIDEA) owned
Snettisham Hydroelectric Project and substantially participated in Railbelt Integrated Resource
Planning. In addition, he has been the project manager for many rural Alaska energy projects
that include bulk fuel facilities, power plants, and small hydroelectric & wind projects. Recently,
he managed the studies, licensing, and construction of the West Fork Upper Battle Creek
Diversion Project ($47m) to increase the energy output of Bradley Lake by 37,000 MWh a year.
Mr. Carey received a Bachelor of Science degree in engineering from the University of Alaska
Fairbanks and a Master of Business Administration from University of Alaska Anchorage.
Seward Electric System
Rob Montgomery, General Manager, Seward Electric System
Rob Montgomery is the General Manager of Seward Electric System, a municipal electric
organization serving 3,000 meters in the City of Seward and surrounding communities. In this
role, he is responsible for the overall operations of the city’s electric utility. Montgomery has
over 20 years of professional experience in the electric utility industry, including 15 years with
South Carolina Electric & Gas Company (SCE&G) and six years with Tennessee Valley Authority
(TVA). At SCE&G, Montgomery was responsible for all strategic communications and media
relations. In this position, he directed efforts to create a pipeline safety communications plan to
meet compliance requirements of the 2002 Pipeline Safety Improvement Act; led public
outreach related to the construction of a $275-million, federally mandated back-up dam on
Lake Murray in Columbia, S.C.; and managed communications and conducted public workshops
when communities were impacted by new federal laws for clearing and maintaining rights of
way near high-voltage transmission lines. At TVA, Montgomery was responsible for strategic
communications and served as a primary liaison with the Tennessee Valley Public Power
Association. Montgomery is a graduate of the University of South Carolina with a degree in
Journalism and holds a certificate from Duke University’s Executive Leadership Program.
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Golden Valley Electric Association (GVEA)
GVEA is a generation, transmission, and distribution cooperative that has built hundreds of
miles of transmission lines. GVEA has built a fleet of modern transmission substations in ring
bus or breaker-and-half bus configurations, with modern digital protection and control systems.
GVEA has in-house design and construction expertise required to complete these projects but is
also supported by local and nation-wide engineering firms, construction contractors, and
equipment supplies. Additionally, our team is competent and experienced in the areas of
procurement, contracting, public relations, regulatory and legislative affairs, and
finance/accounting to support these efforts.
Dan Bishop, Director of Engineering Services, GVEA
Dan Bishop has been responsible for the design and construction of electric transmission lines
and substations throughout Alaska. His skills include drafting, structural design, electrical
design, project management, quality control during construction, leading teams of engineers
and technicians, planning studies, budgeting, and executive management. He received his
Bachelor of Science and Master of Science degrees and in Electrical Engineering from the
University of Alaska Fairbanks and has been a registered professional engineer since 1993. He
has been with GVEA since 1997.
Daniel Heckman, Regulatory Manager, GVEA
Daniel Heckman serves as the primary liaison between GVEA and federal and state regulatory
agencies, primarily the Regulatory Commission of Alaska (RCA), as well as regulatory
stakeholders statewide. In addition to his regulatory and compliance oversight responsibilities,
he serves as GVEA’s primary representative on the Railbelt Reliability Council and as GVEA’s
representative on the BPMC project team described in this application. He received his
Bachelors in Political Science and in History from Southern Methodist University in 2010 and his
juris doctor from the Gonzaga University School of Law in 2013. Combined with his prior
experience at an investor-owned utility, Daniel has 10 years of experience in regulatory affairs.
Chugach Electric Association, Inc. (Chugach)
Bruce Aspray, Manager of Transmission & Substation Engineering & Planning, Chugach
Bruce Aspray is a professional with experience in the industrial power and electrical utility
industries. Mr. Aspray has specified, built, commissioned, and operated a combined cycle
power plant as well as open air and GIS substations. Mr. Aspray is a degreed and licensed
Professional electrical engineer in the State of Alaska. He is experienced in project management
and construction of utility grade facilities including generation, transmission, substations,
distribution, and renewables.
Andrew Laughlin, Chief Operating Officer, Chugach
Andrew Laughlin is a professional with a diverse background in the power industry, specifically,
power delivery project development, design, procurement, project management and
construction. He is a licensed Professional electrical engineer with experience that includes
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construction of transmission and substation infrastructure as well as upgrading Static VAR
Compensation, boiler controls and steam turbine generation systems. Mr. Laughlin has
developed project teams for large and small complicated projects.
Dustin Highers, Vice President Corporate Programs, Chugach
Dustin Highers is an electric utility professional with a background in power plant operations,
maintenance, construction, commissioning, and engineering support. Mr. Highers’ industry
experience includes 30 years in various industries including maritime, oil and gas, power plant
construction and commissioning, gas turbine field engineering, and electric utility engineering
and management. He is the leader of small and large teams in the execution of enterprise level
projects to achieve corporate goals and objectives. Mr. Highers has demonstrated skill in
complex program and project management for power generator maintenance and large
generation construction projects.
Matanuska Electric Association (MEA)
MEA is a generation, transmission, and distribution cooperative that in serving the needs of its
members designs, permits, builds and maintains distribution and transmission lines, as well as
transmission level and distribution level power substations. Projects may be standalone efforts
for our members or in partnership with project developers or other interconnected utilities.
MEA has in-house design, land services, and construction expertise required to complete these
projects, but is also supported by local and nation-wide engineering firms, construction
contractors, and equipment supplies. Additionally, our team is competent and experienced in
the areas of procurement, contracting, public outreach and engagement, regulatory and
legislative affairs, and finance/accounting to support these efforts.
Ed Jenkins, Chief Operations Officer, MEA
Ed Jenkin is a licensed Professional electrical engineer in the State of Alaska with more than 30
years of experience in the utility industry. He is presently the Chief Operations Officer for MEA.
In this role he has oversight of MEA’s system planning, engineering, operations, technical
services, and power system dispatch functions. Within the interconnected Alaska electric utility
system Mr. Jenkin has led or worked on multiple collaborative efforts, such as: Railbelt electric
reliability and cybersecurity standards development, joint asset management and operations,
power pool formation between Matanuska Electric and Chugach Electric, legislation on the
formation of an electric reliability organization, and regulations on net-metering, regional
planning, and standards enforcement. Mr. Jenkin graduated with a Bachelor of Science Degree
in Electrical Engineering from the University of Alaska, Fairbanks in 1984. He also has a Master
of Arts degree in cross-cultural studies, because people are important.
Julie Estey, Senior Director of External Affairs and Strategic Initiatives, MEA
Julie Estey is the Senior Director where she manages the cooperative’s public and member
facing activities along with the organization’s strategic plan and special projects. She serves as
the organization’s representative, past Chair and founding member of the Railbelt Reliability
Council, the recently certificated Electric Reliability Organization for the interconnected Railbelt
grid. Before joining MEA, Ms. Estey was the Business Director for the Alaska Center for Energy
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and Power, an energy research group at the University of Alaska Fairbanks focused on
improving how Alaskans generate and distribute power. She has experience managing public
outreach and engagement for controversial transmission and generation capital projects as well
as expertise bringing diverse groups of stakeholders together to develop common solutions.
Homer Electric Association, Inc. (HEA)
HEA performs generation, transmission, and distribution functions under a cooperative
structure that has built and maintains hundreds of miles of transmission lines. HEA has
constructed and maintains modern transmission substations in ring bus or breaker-and-half bus
configurations, with modern digital protection and control systems. HEA retains in-house design
and construction expertise required to complete these projects; however, can draw upon local
and nation-wide engineering firms, construction contractors, and equipment supplies. Our
team is competent and experienced in procurement, contracting, public relations, regulatory
and legislative affairs, and finance/accounting to support these efforts.
Keriann Baker, Director of Member Relations, HEA
Keriann Baker, HEA’s Director of Member Relations, oversees HEA’s customer service programs,
public relations efforts and legislative affairs. Baker practiced law with Reeves Amodio in
Anchorage and Lewis, Longman & Walker in Palm Beach County, Florida, prior to joining HEA.
She serves as vice chair of the South Peninsula Hospital, Inc., board and previously has served
on numerous boards including several local and state chambers of commerce as well as state
and national bar associations. Ms. Baker received a Bachelor of Science from Utah Valley
University, Orem, Utah, and her juris doctorate from Loyola Chicago School of Law, Chicago, IL.
Larry Jorgensen, Director of Power, Fuels, & Dispatch, HEA
Larry Jorgensen, HEA’s Director of Power, Fuels & Dispatch, manages the operation and
maintenance of HEA’s generation facilities, and generation dispatch. His skills include project
design and management, advanced control systems, simulation and modeling, plant
commissioning and startup, personnel training and advancement, and standards
development. Mr. Jorgensen received an Associate in Applied Science in Power Plant
Technology and Bachelor of Science in Energy Management both from Bismarck State College,
Bismarck, North Dakota. He has been with HEA since 2011.
Independent Contractors
Rena Miller, Independent Contractor
Rena Miller is an independent contractor supporting the project team with the Community
Benefit Plan. She most recently managed the Railbelt electric utilities' application to State
regulators to serve as electric reliability organization. Rena worked more than 10 years for the
Alaska State Legislature, serving as Chief of Staff to the Senate President and as the Senate
Majority's oil and gas policy advisor. Her time with the Legislature included policy development
and advancement on electric and other energy issues, and experience in stakeholder outreach,
consensus building and compromise.
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
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Concept Paper
Railbelt Backbone Reconstruction Project (RBR)
Topic Area: Grid Resilience
Applicant: LSI submitting this concept paper on behalf of Matanuska Electric Association
representing The Bradley Lake Project Management Committee (BPMC)
Technical and Business Point of Contact: Brian Hickey, P.E., PMP.
The BPMC is a collaborative group of decision makers that represents all the primary
transmission owners and operators of Alaska’s largest electrical grid (the Railbelt). The BPMC
consists of the following organizations:
1. The State of Alaska dba The Alaska Energy Authority (AEA)
2. Chugach Electric Association Inc., a Central Region cooperative (CEA)
3. Golden Valley Electric Association Inc., a Northern Region Cooperative (GVEA)
4. Homer Electric Association inc., a Southern Region Cooperative (HEA)
5. Matanuska Electric Association inc., a Central Region Cooperative (MEA)
6. The City of Seward Alaska. dba Seward Electric System (SES)
Project Location: All three regions of the Alaska Railbelt electrical system
Area served by
the Railbelt Grid
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Project and Technical Description
Alaska and the nation are at a crossroads. We are at the nexus of the need to develop a fuel-
diverse low-carbon economy and a once in a generation opportunity to invest in infrastructure.
At this intersection, the collective mission of the Railbelt utilities and the State is to build a
resilient, clean, smart, and low-cost electrical grid. The grid of the future supports a fuel-diverse
energy landscape that drives sustainable economic development in the state and ensures the
cost-effective delivery of energy to the consumers of the Railbelt and beyond. The Railbelt
utilities, acting together through the BPMC, have a shared vision: a collaborative future in the
Railbelt in which our communities come together and share resources to strengthen and build a
smart, clean electrical grid that allows our members, our national defense infrastructure, and
the communities adjacent to the Railbelt access to clean low-cost energy resources from any
source.
The Railbelt Backbone Reconstruction (RBR or Project), the subject of this GRIP Topic 1 Concept
Paper, is one of a series of projects that constitute the BPMC’s Grid Modernization and
Resiliency Plan (GMRP or Plan)1. Through the GMRP, there exists an opportunity for a
transformational series of transmission infrastructure improvements estimated to cost ~$2.9 B.
Successful implementation of the GMRP will prepare the Railbelt grid in terms of resiliency and
reliability necessary for the development of a more fuel diverse low carbon reality in Alaska
that can serve as a model for the rest of the United States and the world.
As described throughout this Concept Paper and other subsequent papers, the Railbelt grid is
an isolated2, long-distance, fully functioning, electric grid built on a relatively small scale that
serves nearly three quarters of Alaska’s population with aging infrastructure, inadequate by
traditional industry standards. Through the GRIP, the BPMC recognizes that there is an
opportunity for a successful modernization of the Railbelt grid primed to facilitate
decarbonization of the broader Alaska economy. Due to the diversity within the Railbelt and
scale of the infrastructure, the federal government has an opportunity to utilize the Railbelt
grid as a model to demonstrate both the objectives and vision of the bipartisan Infrastructure
Investment and Jobs Act (IIJA) and other initiatives. The lessons learned from this prototype will
have broad applicability to the larger grids of the contiguous lower forty-eight states.
Discussion on how this project fulfills the GRIP FOA eligibility requirements begins on page nine
of this document.
As discussed more fully in the Community Benefits Plan, the Railbelt region is home to
numerous federally recognized tribes and disadvantaged and underserved communities. There
are over 200 federally recognized tribes in Alaska, many in the Railbelt region, and based on the
2010 census Anchorage was home to the three most culturally diverse census tracts in the US
1 Fundamentally the GMRP consists of three interregional transmission interconnections: 1) Upgrades to the
Railbelt Backbone, the RBR, 2) a second interregional tie between the Southern, Central and Northern Regions and
3) A third interregional tie between the Central Region and Northern Region integrating the Copper River Valley
(currently a stand-alone system) into the Railbelt Grid and providing a second feed into the U.S. Department of
Defense mid-course ground based missile defense system at Fort Greely.
2 The Railbelt is a stand-alone grid not interconnected with any other electric system.
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(followed closely by Queens, New York). One hundred and ten languages are spoken in the
Anchorage School District alone. With this socially and economically diverse makeup, the
Railbelt is the ideal area for the federal government to demonstrate how the benefits of the IIJA
can be maximized.
The Railbelt serves five military bases, as depicted in figure 1, each of which has a vital strategic
importance to national security. These critical bases contribute to the national defense from a
broad range of perspectives including missile defense, global telecommunications downlink
infrastructure, and F-22 high-speed intercept capability. As noted in the White House’s release
of the Indo-Pacific Strategy in February 2022, these defense capabilities are vital to our national
security and prosperity. The GMRP will support the transition of Alaska-based US DoD assets to
a low carbon future.
Figure 1: Military Bases Served by The Railbelt
The Railbelt is essential to the broader state economy. The Port of Alaska, a federally
designated Strategic Seaport, serves as the primary point of entry for virtually all cargo, food,
building materials, and fuel for the vast majority of Alaska’s population. Additionally, Anchorage
International Airport is the fourth busiest international airport in the world in terms of cargo
throughput. The Railbelt is home to significant mining operations, including that of rare earth
minerals critical to the US national security and other strategic imperatives. These assets are
vital to the economy and security of both Alaska and the Nation.
Through the RBR, the Railbelt and the State will experience broad and substantial benefits.
Those benefits include improved regional resiliency to wildfires and other extreme weather
Railbelt Military Bases
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events, reduction in carbon emissions and transmission system losses, increased interregional
transfer capability, integration of renewables and other low carbon generation sources,
facilitation of decarbonized beneficial electrification, and the eventual decarbonization of the
electric grid.
More significantly, this Project and the broader Plan will help lower electric rates throughout
the State. Alaskans pay some of the highest electric rates in the country, which
disproportionately impact the disadvantaged and underserved. Lowering rates on the Railbelt
will in turn help address the high cost of energy in rural Alaska not served by the Railbelt, close
to 30% of the state’s population. This cost is mitigated through the State’s Power Cost
Equalization Program, based in part on the price of Railbelt electricity. The GRIP Program’s
objectives are met and complemented by the BPMC’s goal of a resilient, clean, and low-cost
electrical network that supports sustainable economic development in the region,
decarbonization, and cost-effective delivery of energy.
All of the electric utilities in the Railbelt are electric cooperatives3. Thus, virtually all benefits
from this grid modernization effort flow directly to the member-owners, the residents of the
Railbelt. Effectively, the Railbelt is a proving ground where DOE and other federal agencies can
evaluate and successfully demonstrate transmission resiliency improvements in preparation for
electric decarbonization both technically and on a community basis. Notably, in the Railbelt
electric grid, this can be achieved at a relatively low cost. The RBR project will have full support
and collaborative cooperation of the BPMC project team. This team consists of representatives
of each of the five Railbelt electric utilities4 and the State of Alaska, dba, AEA. The BPMC team
members are committed to the GMRP, subject to governance board approval and vetting
through the National Environmental Policy Act (NEPA) process. The team plans to apply for all
IIJA and Inflation Reduction Act (IRA) applicable federal assistance for GMRP projects. In
addition, the team is seeking State appropriations to augment these federal funds. The GMRP
upgraded grid will create an unrestricted electron freeway and prepare the Railbelt to optimize
the use of cost-effective, low-carbon energy technologies by eliminating current technical and
geographic constraints.
Background
The Railbelt Grid
The Railbelt electric grid is unique in North America as it is technically a fully functioning long-
distance electrical grid on a very small scale. The Railbelt is characterized by three load-
generation regions with four load-balancing areas. These load-balancing areas do not coincide
precisely with the load-generation regions. These load-generation concentrations, known as the
Northern Region (Fairbanks-Delta Junction), the Central Region (Anchorage-MatSu), and
3 Except for the City of Seward-a municipal, public power utility at ~1% of total Railbelt electricity demand.
4 The five Railbelt Electric Utilities consist of Golden Valley Electric Association Inc. in the Northern Region,
Matanuska Electric Association Inc. and Chugach Electric Association Inc. in the Central region and Seward Electric
System and Homer Electric System Inc. in the Southern Region.
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Southern Region (the Kenai Peninsula), are tied together with two long transmission lines
operating at 115kV and 138KV. The grid provides electricity to approximately 70% of the state's
residents and generates 80% of the electricity in Alaska. It extends over 700 miles from the
Bradley Lake Project, located at the head of Kachemak bay near Homer, Alaska, in the Southern
Region, to Delta Junction in Interior Alaska, roughly the distance from Washington, DC to
Atlanta, GA as depicted in figure 2. The grid traverses inhospitable mountainous subarctic
terrain. The region is laced with highly active seismic zones and is subject to volcanic eruptions,
forest fires, flooding, and fierce annual winter storms. The grid's assets vary from high voltage
(138 kV and 230 kV) submarine cable crossings in Cook Inlet5 to remote "helicopter/riverboat -
access-only" river crossings and numerous transmission structures well above 2000 feet.
Figure 2: Alaska’s Relative Size
Unlike numerous areas in the contiguous lower forty-eight states, the Railbelt has received
minimal federal investment in grid development. The Eklutna Hydroelectric Project, initially
constructed in the 1950s, was the last major federal project in the Railbelt that included a
transmission line component. This project was rebuilt by the Bureau of Reclamation's Alaska
Power Administration after the 1964 "Good Friday” Earthquake and sold by the Federal
government to Central Region utilities in the early 1990s.
The Northern Region is marginally interconnected, primarily at 69kv and 138kV. The Central
Region is moderately well interconnected with multiple 230, 138, and 115 kV lines. The
Southern Region is also interconnected at 115 kV, but includes a radial feed to the SES system.
A tight power pool operates in the Central Region, and an active economy energy market exists
but is severely limited by transmission constraints. A reserve-sharing pool exists between all
three regions. Due to the relatively feeble regional interconnections, the Railbelt Grid is
technically characterized as "transient stability limited," with machines under dynamic stress
5 Cook inlet is a silt laden 180-mile inlet reaching from Knik Arm to the Gulf of Alaska. The Inlet has the fourth
highest tidal range in the world at 30.3 feet and contains an endangered subspecies of the Beluga Whale.
Railbelt Grid
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swinging against other machines within the region; and with regions swinging against each
other across the light interregional interconnections. The grid is susceptible to and has
experienced large-scale6 small-signal instability oscillations during the annual nexus of low lake
elevations at Bradley Lake, summer valley load conditions, and faults on the Alaska Intertie
nearly 300 miles north of the Bradley Lake Project.
Voltage stability, which varies from marginal to good depending on the specific area, has been
improved with the addition of six static VAR compensators at critical locations. The Railbelt Grid
operates under a subset of North American Electric Reliability Corporation (NERC) standards
modified to account for the scale and nature of the interconnection (the grid's system bias is
variable and ranges from 3-10 Mw/.1 hertz). In 2024 these standards will become mandatory
and enforceable under a recently formed and certificated Electric Reliability Organization, as
developed through the Railbelt Reliability Council. The grid has a sophisticated under-frequency
load shed scheme which sheds load to match generation in four stages with varying time delays
and, in some cases considering frequency rate-of-change. Traditional day-ahead and real-time
security constrained economic dispatch are run in each LBA with net interchange, and
frequency monitored and managed to NERC CPS 1 and 2. Dynamic events on the grid occur and
resolve very quickly (2-10 seconds) when compared with the much larger North American grids
(the Eastern Interconnection, the Western Interconnection, and ERCOT), which resolve in tens
of minutes. The grid's peak demand is roughly 750 MW compared to ERCOT's (by far the
smallest of the North American interconnections) peak demand of 85,000 MW. The grid's
annual energy consumption is approximately 4,800 GWH compared to ERCOT at 339,000 GWH.
The Railbelt’s Grid Modernization Resiliency Plan (GMRP)
Today, multiple change drivers are reshaping the broader energy landscape in Alaska and across
the world. Geopolitical shifts are dramatically altering global energy markets. Decarbonization
policies and technological advancements, shaped by increasingly dramatic climate change, are
both the result of and contributing to a shift in popular sentiment about energy and the
environment. Regionally, uncertainty around Cook Inlet Natural gas and broader fuel supply
issues for the utilities is a critical – and shared – challenge looming on the near-term horizon.
In response to this shared challenge, the BPMC has come together to develop a broad-based,
long-term plan to ensure the future energy viability of the Railbelt from a social, economic, and
technical perspective. The technical aspect of that Plan is the GMRP, of which the RBR is a
component. This Plan will be incorporated into Alaska’s broader State Energy Security Plan as
that document is developed in the coming months.
6 Oscillations have been measured with a peak of 275MW, a 1.1 sec period and sustained for over 90 seconds on a
grid with a summer valley peak load of approximately 500MW.
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Figure 3: RBR Components in current funding cycle
Figure Three is a graphic representation of the Southern and Central regions of the Railbelt grid
with the current system and the proposed Southern and Central Region GMRP components
overlayed. The Components of the GMRP in these regions that make up the RBR are highlighted
in yellow. A more detailed geographic GMRP effort map with the Plan's component projects,
and estimated costs is available upon request.
Figure Four is a graphic representation of the entire Railbelt with the GMRP overlayed on the
existing system. This Plan is transformational and highly innovative. Given the operational
nature of the Railbelt and the disparate socioeconomic status and vast diversity of its
communities as described below, learnings from this undertaking will be broadly applicable to
the larger grids of the contiguous lower forty-eight states and North America.
Railbelt Backbone Reconstruction Project Federal Assitance Request 2022-2023 2024-27
Southern Region (Kenai Peninsula)and Central Region (Anchorage Mat-Su)$614,000,000 TBD
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U.S. Department of Energy
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Figure 4: Railbelt Grid Modernization and Resiliency Plan (GMRP)
We intend to apply for federal funding assistance for specific GMRP components in each of the
five funding-year periods of the GRIP, IRA, and USDA RUS loan programs. In addition to our
federal funding requests, we are seeking State assistance and the remainder of the total plan
costs will be funded by Railbelt utilities. Our estimated total cost for the GMRP is $2.87B over
fifteen years. Without significant Federal and State investment, the GMRP plan and this Project
are beyond the capabilities of the Railbelt utilities and AEA. The team assembled for this Project
as shown below consists of stakeholder outreach experts, engineers, project managers, and all
the executive-level decision-makers in the Railbelt. The Team will work diligently to integrate
other regional stakeholders into the process.
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U.S. Department of Energy
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The priority in diversifying the Railbelt fuel supply and decarbonizing the Railbelt Grid must be
stabilizing its primary control variable frequency and decongesting the transmission system.
These improvements are required irrespective of the nature of fuel supply diversity and
decarbonization solutions. In 2010 the Railbelt's frequency was equal to 60Hertz approximately
44 % of the time. By 2021, the grid operated at 60Hertz about 17% of the time. The primary
causes of this deterioration of frequency control are the introduction of lighter, more efficient
aero-derivative turbines, efficiency-driven (as opposed to response-driven) plant control
systems, and non-dispatchable renewables in the form of solar and wind generators.
Decongesting the grid will require upgrading existing transmission lines and building a new
transmission interconnection from the Kenai to the Central Region and on to Healy in the
Northern Region. A subsequent phase will include a transmission interconnection from Wasilla
to Glenallen and north to interconnect with the GVEA system at Fort Greely and the Ground-
Based Mid-Course Missile Defense system.
The following table outlines the high-level timeline and associated estimated costs for the
GMRP. The priority and timing of these projects may vary given the outcome of NEPA
processes, the evolving nature of low carbon generation development, and Cook Inlet fuel
supply changes.
The Project
The subject of this concept paper is reconstruction of the Railbelt Backbone Transmission
System, which is made up of a series of transmission line segments that stretch from the
Bradley Lake Hydro Electric Project to Fairbanks and Delta Junction, 700 miles to the north. The
newest of these transmission line segments was constructed in the 2006, with most
constructed in the 1970s and 1980s and some as early as the 1950s and 1960s. For this
application we have selected segments of the RBR which have received formal or informal
regional or interregional approval allowing them to be fast-tracked to design, permitting, and
construction in this funding cycle. In GRIP Topic 2 of this funding cycle, we will be seeking
federal assistance for design and procurement of an interregional battery control system.
Furthermore, in GRIP Topic 3 we will be seeking federal assistance for the interregional ties and
potentially Grid Stabilization batteries.
The total estimated cost for the reconstruction of the line segments and associated station
facilities, proposed in this concept paper, is approximately $615M. On December 2, 2022, the
BPMC, through AEA, closed on a bond package for $166M, 65% of which will be dedicated to
this project and 35% to three regional grid stabilization battery energy storage systems (BESS).
In later funding cycles, we will include other segments of the RBR as study work is completed
Grid Modernization and Resiliency Plan (GMRP)
Decarbonization and Fuel Diversity Transmission Build-Out 2023-2027 2028-2032 2035-2037
Southern Region (Kenai Peninsula) to Central Region (Anchorage Mat-Su) + Energy Storage $934,000,000
Central Region to Northern Region (Fairbanks-Delta Junction) Phase 1 $981,000,000
Central Region to Northern Region Phase 2 and Roadbelt (Wasilla-Glenallen-Delta Junction)$958,000,000
Total Fifteen Year Transmission Spend $2,873,000,000
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and once regional approval is obtained. Finally, we are also seeking State funding assistance7 to
help close the gap between utility funding and federal assistance.
Project Eligibility
The RBR Project will meet eight of the twelve eligibility requirements:
(B) Fire-resistant technologies and fire prevention systems.
Reconstructing the towers to 230kV standards using metal and wood structures with elevated
conductor height that lessen the likelihood of tree contacts and where possible increased ROW
widths that lessen the likelihood of fire impact.
(C) Monitoring and control technologies.
State of the art protection, control and monitoring using dual, line current differential, time-
domain line protection with precise fault location using traveling wave reflectometry, and fiber
and digital microwave communications assisted distance protection schemes. Increased
situation awareness from real-time supervisory control and data acquisition with synchro-
phasor power angle and voltage magnitude at all appropriate busses. Additionally real-time
fault location data telemetered to the control centers.
(E) Utility pole management.
Replacement of existing poles which have exceeded their useful life, as well as, if possible,
relocation of structures out of known avalanche paths. If relocation is not possible, the use of
breakaway conductor attachments, and pole in driven- pile-caisson construction for ease of
replacement where avalanche danger cannot be mitigated.
(F) The relocation of power lines or the reconductoring of power lines with low sag,
advanced conductors.
All circuits are re-framed at 230 kV and reconductored for maximum transfer capability, See E)
above for relocation.
(I) Adaptive protection technologies.
Given the speed with which the events occur and resolve- (electric sub-cycle to single seconds),
the protection systems will include remedial action schemes such as undersea cable load control
and rate of change supervised underfrequency load shed. The integrated BESS systems will
provide adaptive increased transfer capability based on load and generation scenarios.
7The October 26,2022 letter from Railbelt Utility Managers to Alaska Governor Michael Dunleavy is available for
review.
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(K) Hardening of power lines, facilities, substations, of other systems; and
See E) above for powerline hardening, Facilities including communications, substation
constructed to current Critical Infrastructure Protection (CIP) standards and specifically with
respect to this Topic in terms of security and fire resistance.
(J) Advanced modeling technologies.
Advanced Eigenvector/Eigenvalue modeling and analysis will be required to tune the control,
protection, and adaptive control systems for small- signal instability.
(L) The replacement of old overhead conductors and underground cables.
Virtually all conductors being replaced are between 40 and 75 years of age.
Project Grid Benefits
The RBR project will simultaneously reduce losses and increase transfer capability between
regions, although non-firm due to the lack of resiliency provided by second ties between the
three regions8. Increased transfer capability reduces security constrained economic dispatch
(SCED) constraints resulting in a more efficient generation dispatch. Increased transfer
capability combined with reduced losses will reduce overall fuel burn and reduce carbon
emissions. For example, the Bradley Lake Hydro Electric Project, one of the lowest-cost
resources in the Railbelt, is a 120 MW plant that is limited to operation at or below 90MW9
maximum capacity due to transient stability limitations and unacceptable transmission losses.
Losses on energy delivered to Quartz Creek with Bradley Lake at 90MW (2020 Winter Peak
case) are roughly 8%; losses at 120MW (same case) are nearly 11%. When increasing Bradley
output from 110 MW to 120 MW losses increase by 5.6 MW, an incremental 56% increase.
Thus, the RBR will result in lowering fuel burn and reduce carbon emissions both from reduced
losses and the more efficient SCED for all BPMC participants.
Ultimately the RBR project, acting as a component of the larger GMRP, will improve resiliency,
reliability and efficiency and help facilitate the integration of additional non-dispatchable
renewables whether they are located in the Southern, Central or Northern regions.
Project Risk Reduction
DOE investment in the RBR will provide valuable insights for contiguous lower forty-eight states
grid planners and developers specifically with respect to the effect of taller structures,
breakaway conductors, driven-pile-caisson construction, hardened substations, and
8Resiliency in terms of additional ties will be addressed Topic 3 of our GRIP application
9 Except in periods of imminent spill
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communication equipment facilities in harsh winter environments. Investment will also develop
knowledge regarding the effects of improved situational awareness, with respect to power
angles and voltage magnitude at appropriate busses, on system operations performance.
Project DOE Funding Leveraging Outcomes
DOE investment in RBR will unlock State10 and local Cooperative funding for this Project and
subsequent GMRP components. By advancing the GMRP’s cumulative broader impact this
investment will transform the Railbelt transmission grid. This transformation will provide
adequate transmission capability for broad regional participation in renewable and low carbon
generation projects. Broad participation will drive economies of scale, and improve the cost
profile of these projects, effectively easing the rate burden of the Green Premium. The burden
of such rate impacts falls disproportionately on low income and underserved communities.
Thus, the GMRP will facilitate the integration of renewable and low carbon generation
technologies from Homer to Fairbanks through the unrestricted electron freeway.
Project Readiness, Viability, and Expected Timing
As noted above, given the maturity (existing study work and regional approval) of the proposed
RBR segments, these RBR segments can be fast tracked through design permitting and
construction.
10 See October 26th letter from the Railbelt Electric Utility managers to Governor Dunleavy.
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Community Benefits Plan
Railbelt Backbone Reconstruction project presents a unique opportunity to increase reliability,
provide clean energy options, and reduce electricity rates for a 700-mile-long stretch of Alaska
that serves as the state’s economic backbone and is home to approximately two-thirds of the
state’s population. The same Railbelt region includes or is proximate to several Disadvantaged
Communities (DACs), extensive veteran, Pacific Islander, and Alaska Native populations, and
some of the most diverse neighborhoods in the nation. Furthermore, the State of Alaska’s
Power Cost Equalization program extends the financial benefits of lower Railbelt electric rates
to positively impact additional remote communities statewide; even populations not connected
to the Railbelt’s electric network benefit from reduced Railbelt rates.
Having missed out on the federal government’s transformational infrastructure investments
before Alaska statehood, residents of Alaska have long borne outsized infrastructure costs
spread across relatively few homes, businesses, and industries. Alaskans have experienced a
lack of redundancy and infrastructure that would be considered unacceptable in other parts of
the US. Federal support would be a step closer to providing parity to Alaskans, including
numerous DACs as well as tribal entities and rural communities.
BPMC intends to identify project benefits, the anticipated recipients, and metrics to track and
measure the benefits in its Community Benefits Plan (CBP) to meet the federal government’s
four target goals (outlined below). BPMC’s approach to this plan will be stakeholder driven,
involving communities and entities anticipated to become partners through the project
planning, execution and operations stages.
CBP development will benefit from early engagement with potential partners and stakeholders
in order to define measurable project benefits, set workforce goals, and advance formal
partnerships for inclusion in the CBP. Individuals in impacted communities and local institutions
can provide invaluable insight into potential project benefits and outcomes that will inform the
project development and execution. This stakeholder participation is critical up-front to ensure
the project delivers expected benefits that reach the intended communities, while reducing
possible adverse impacts.
Defining the affected stakeholders early, establishing clear, durable communication channels,
receiving their concerns, and crafting measures to address those concerns is critical to
managing project risks and ensuring desired objectives. Clear communication and collaboration
during development of the project application and the CBP will set a foundation for
implementing the CBP during project development, construction, and operations. This
engagement should be a continuous loop through the project design and execution.
Stakeholder engagement is central to the BPMC partners’ regular businesses, with four
member-owned electric cooperatives, a municipally owned utility, and a state entity. BPMC
believes this extensive experience will provide key support in the CBP development and
execution. Early engagement with stakeholders is also expected to further the ability of
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communities, individuals and local governments and tribal entities to unlock additional funding
opportunities tied to the project. To that end, BPMC will develop a robust community benefit
plan around the four FOA elements as detailed below. Across all elements, BPMC’s approach is
founded on the belief that direct, early communication and a meaningful exchange with other
entities and communities will inform CBP development.
Element 1: Community and labor engagement leading to negotiated agreements
BPMC’s utility members have established, long-term, and mutually valued relationships with
the organized labor community in Alaska. The Railbelt utilities have used project labor
agreements in the past for projects of this scale e.g., construction of the Alaska Intertie. Each of
the Railbelt utilities has collective bargaining agreements with the International Brotherhood of
Electrical Workers, among other unions. The BPMC’s approach to the CBP will be to engage its
labor partners early to initiate discussions toward labor agreements. The CBP would establish a
timeline and milestones for negotiations with organized labor, including discussions on local
and targeted hiring goals, card-check neutrality, and possible provisions advancing programs to
attract, train and retain new workers.
As the project proponent, BPMC’s team includes the State of Alaska’s energy organization,
Alaska Energy Authority. The utilities and AEA have a successful record partnering both as
owner/partners in shared capital projects and in advancing State energy goals and priorities.
With State support affirmed in this way, the BPMC’s CBP would prioritize establishing and
formalizing relationships with tribal entities, local governments, and other State of Alaska
departments with a focus on workforce and related issues. Early engagement with these core
stakeholders will also help ensure the project is cognizant of and in support of local energy
plans and goals.
The BPMC as an entity and its utility members individually are accustomed to engaging with
local governments and tribal entities through permitting and regulatory processes for capital
projects. The CBP for this project would establish milestones urging earlier dialogue with local
governments and tribal entities. These conversations should begin sufficiently early to inform
project development in response to local communities’ needs and concerns, and to guide
iterations of the CBP. Local governments and tribal entities are uniquely situated to help
identify the most effective actions the project can take toward partnerships that advance
workforce issues; diversity, equity, inclusion, and accessibility; and the flow of project benefits
to disadvantaged communities.
BPMC members have extensive experience engaging with local residents and businesses in
town halls and similar formats; AEA is a State entity with obligations to the public interest, and
the electric utilities are member-owned cooperatives (one is municipal with direct
responsibilities to the city’s residents). The CBP will articulate a plan and schedule for these
engagements to ensure individuals and businesses are aware of the project, including potential
economic and clean energy opportunities the project could enable, and to receive and
incorporate concerns and input into project development plans.
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Element 2: Investing in job quality and workforce continuity
Given Alaska’s relative isolation and general need for living wage jobs, the BPMC’s members
firmly support the development of workforce training institutions. The stakeholder engagement
articulated above is expected to further inform the project team of workforce issues and
opportunities, including opportunities to partner with existing programs and institutions to
ensure a skilled and inclusive local workforce. Such opportunities would be evaluated for
incorporation into the CBP.
Alaska is not a Right to Work state. The BPMC utilities’ employees who are covered by
bargaining unit agreements are required to join unions consistent with the terms and
conditions of the various utility bargaining unit agreements. Further, the utilities maintain strict
policies fostering safe, healthy, inclusive workplaces free of discrimination and harassment. The
BPMC’s members support continual development of a skilled, inclusive local workforce,
specifically the IBEW-NECA Alaska Joint Electrical Apprenticeship and Training Trust, individual
utility training programs, the University of Alaska System and other technical training programs.
This track record of investment in the Alaskan and American workforce will be reflected in the
CBP.
Utilities will also continue support of STEM and energy literacy programs throughout the state
as an investment in the future pipeline of critical energy-related jobs.
Element 3: Advancing diversity, equity, inclusion, and accessibility
The BPMC’s CBP will identify and evaluate potential actions to advance diversity, equity,
inclusion, and accessibility in relation to the project. Alaska offers significant opportunities to
engage underserved populations, including Alaska Natives, Pacific Islanders, and veterans.
Stakeholder consultation, including with organized labor, is expected to identify potential
workforce partnerships to encourage participation of these and similar communities in the
project.
Element 4: Contributing to the Justice40 Initiative goal that 40% of the overall benefits of
certain climate and clean energy investments flow to disadvantaged communities
As discussed in the beginning of this section, BPMC believes its project presents a unique
opportunity to extend benefits to much of Alaska, including DACs. The initial approach to this
CBP element would be identifying potential partners and establishing relationships to assist in
the plan development. Potential partners may include impacted DACs; State entities such as
Department of Environmental Conservation, Department of Commerce, and Department of
Labor and Workforce Development; academic or public policy/research institutions such as the
University of Alaska, Alaska Center for Energy and Power, and the Institute for Social and
Economic Research (ISER); as well as tribal and non-governmental entities, many of whom have
prioritized affordable, clean energy as strategic priorities.
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BPMC intends to work with partners, stakeholders, and project technical teams to identify
measurable, trackable benefits and determine which benefits are most meaningful to impacted
communities. Engagement with institutional partners will help define disadvantaged
communities within and proximate to the project area, and within the projected reach of the
defined outcomes. Formulation of a stakeholder engagement plan and further consultation
with DACs and other partners could help establish mechanisms to measure and track the
investments and outcomes.
BPMC believes significant benefits can be realized in energy resiliency, reduction of energy and
pollution poverty as well clean energy opportunities throughout the region and state and would
coordinate with partners and stakeholders to quantify these broader benefits within the CBP.
Communities in the project region currently face potentially severe health, safety, and
economic consequences resulting from grid threats such as earthquakes, severe cold weather
events, and large-scale forest fires often in remote areas. Project implementation is also
anticipated to increase clean energy options throughout the region, including DACs and other
rural communities, many of whom are currently powered through coal or diesel-fired
generation.
The project is expected to reduce the potential consequences posed by these risks. The CBP
should also capture the potential benefits of increased opportunities for tying new, clean-
energy projects to the grid, especially smaller-scale projects. Project benefits are anticipated to
include improvements to air quality across the project regions, especially in the Northern
Region and other locations where particulate matter (PM2.5) have risen to non-attainment
levels high enough to trigger remediation efforts through the EPA and concerns are adversely
impacting the economy and human health.
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Addendum A
The Railbelt Utilities and AEA have worked together under the auspices of the BPMC for over 30
years. From constructing the project, which was commissioned in 1992 at a cost of
approximately $350M in 1990 dollars, to the most recent addition to the Project the Sterling to
Quartz 115 kV line. The Project added the Battle Creek Diversion in 2018, a $45M diversion
structure that increased the lake’s energy capacity water by approximately 10 percent. On
December 1, 2022, AEA on behalf of the BPMC closed on a $166M bond package which will be
used to begin the RBR project by upgrading the Soldotna to Quartz section of the 115 kV
Southern Region to Central region Transmission line (aka the Anchorage to Kenai 115kV line).
Thirty-five percent of the bond issue will be used to fund three regional grid stabilization
batteries, one of which has been constructed by HEA and is currently operational.
Our stakeholder outreach, engineering, and project management teams have many decades of
stakeholder outreach, transmission, and generation engineering, construction, and operations
experience. Most of our engineers are registered professional engineers (PE) and several are
also registered project management professionals (PMP). Combined this group has successfully
constructed and commissioned billions of dollars of grid infrastructure as noted in their
qualifications and expertise included below.
Railbelt Regional Coordination
Brian Hickey, Executive Director, Railbelt Regional Coordination
Brian Hickey is the Executive Director of Railbelt Regional Coordination, working for the CEOs of
the five Railbelt Electric Utilities. He has more than 40 years of experience in electric power
systems and telecommunications. His experience includes executive leadership and
management, strategic business planning, economic alternative analysis, engineering, design,
project management, and maintenance process development and implementation. Hickey has
managed numerous generation, transmission and process development and improvement
projects in his career. Hickey holds a Bachelor of Science in Electrical Engineering from Montana
State University, a Master’s certificate in Project Management from ESI/George Washington
University, and a Master’s degree in Global Finance from Alaska Pacific University. He is a
licensed Professional Electrical Engineer and PMI Certified Project Management Professional.
David Burlingame, Principal, Electric Power Solutions Group Inc.
David Burlingame has been involved in the Railbelt planning and system studies for the Railbelt
since 1985. He has led the completion of system operating studies as well as investigations into
reliability and resiliency issues in islanded electrical grids. He has led many studies for the
Railbelt system including the investigation into solving the reasons for the most recent 250 MW
oscillations in the Railbelt and their possible solutions. He has been involved in system studies
and planning for the Railbelt for over thirty years and has experience in the design of
substations, BESS control systems, Remedial Action Schemes and custom modeling required in
highly variable islanded systems such as the Railbelt. Prior to starting his engineering company,
he was involved in utility operations and engineering for 13 years in the Railbelt. He has been a
licensed professional engineer since 1987.
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Alaska Energy Authority (AEA)
AEA’s mission is to “reduce the cost of energy in Alaska.” As Alaska’s lead agency for statewide
energy policy and program development, AEA collaborates with utilities, private companies,
legislators, local governments, and Alaskan energy innovators to diversify the state’s energy
portfolio. On the Railbelt, AEA owns the 120-megawatt Bradley Lake Hydroelectric Project, the
largest in Alaska. AEA recently oversaw the West Fork Upper Battle Creek Diversion
construction, which diverts glacial water from West Fork Upper Battle Creek into Bradley Lake
increasing energy by 10%. In rural Alaska, AEA constructs bulk fuel tank farms, diesel
powerhouses, and electrical distribution grids, and provides technical/community assistance to
rural Alaskans. Our dedicated team of engineers, economists, project managers, loan officers,
and planners help Alaska’s cities, boroughs, utilities, tribal entities, schools, and private
businesses move energy projects forward successfully.
Bryan Carey, Director of Owned Assets, AEA
Bryan Carey has worked more than 20 years on energy projects for the AEA. During that time,
he’s been the project manager for the AEA’s Bradley Lake Hydroelectric Project (Alaska’s largest
Hydro project), Bradley Lake transmission assets, Project Engineer for the Susitna-Watana
Hydroelectric Project, Alaska Industrial Development Export Authority’s (AIDEA) owned
Snettisham Hydroelectric Project and substantially participated in Railbelt Integrated Resource
Planning. In addition, he has been the project manager for many rural Alaska energy projects
that include bulk fuel facilities, power plants, and small hydroelectric & wind projects. Recently,
he managed the studies, licensing, and construction of the West Fork Upper Battle Creek
Diversion Project ($47m) to increase the energy output of Bradley Lake by 37,000 MWh a year.
Mr. Carey received a Bachelor of Science degree in engineering from the University of Alaska
Fairbanks and a Master of Business Administration from University of Alaska Anchorage.
Seward Electric System
Rob Montgomery, General Manager, Seward Electric System
Rob Montgomery is the General Manager of Seward Electric System, a municipal electric
organization serving 3,000 meters in the City of Seward and surrounding communities. In this
role, he is responsible for the overall operations of the city’s electric utility. Montgomery has
over 20 years of professional experience in the electric utility industry, including 15 years with
South Carolina Electric & Gas Company (SCE&G) and six years with Tennessee Valley Authority
(TVA). At SCE&G, Montgomery was responsible for all strategic communications and media
relations. In this position, he directed efforts to create a pipeline safety communications plan to
meet compliance requirements of the 2002 Pipeline Safety Improvement Act; led public
outreach related to the construction of a $275-million, federally mandated back-up dam on
Lake Murray in Columbia, S.C.; and managed communications and conducted public workshops
when communities were impacted by new federal laws for clearing and maintaining rights of
way near high-voltage transmission lines. At TVA, Montgomery was responsible for strategic
communications and served as a primary liaison with the Tennessee Valley Public Power
Association. Montgomery is a graduate of the University of South Carolina with a degree in
Journalism and holds a certificate from Duke University’s Executive Leadership Program.
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Golden Valley Electric Association (GVEA)
GVEA is a generation, transmission, and distribution cooperative that has built hundreds of
miles of transmission lines. GVEA has built a fleet of modern transmission substations in ring
bus or breaker-and-half bus configurations, with modern digital protection and control systems.
GVEA has in-house design and construction expertise required to complete these projects but is
also supported by local and nation-wide engineering firms, construction contractors, and
equipment supplies. Additionally, our team is competent and experienced in the areas of
procurement, contracting, public relations, regulatory and legislative affairs, and
finance/accounting to support these efforts.
Dan Bishop, Director of Engineering Services, GVEA
Dan Bishop has been responsible for the design and construction of electric transmission lines
and substations throughout Alaska. His skills include drafting, structural design, electrical
design, project management, quality control during construction, leading teams of engineers
and technicians, planning studies, budgeting, and executive management. He received his
Bachelor of Science and Master of Science degrees and in Electrical Engineering from the
University of Alaska Fairbanks and has been a registered professional engineer since 1993. He
has been with GVEA since 1997.
Daniel Heckman, Regulatory Manager, GVEA
Daniel Heckman serves as the primary liaison between GVEA and federal and state regulatory
agencies, primarily the Regulatory Commission of Alaska (RCA), as well as regulatory
stakeholders statewide. In addition to his regulatory and compliance oversight responsibilities,
he serves as GVEA’s primary representative on the Railbelt Reliability Council and as GVEA’s
representative on the BPMC project team described in this application. He received his
Bachelors in Political Science and in History from Southern Methodist University in 2010 and his
juris doctor from the Gonzaga University School of Law in 2013. Combined with his prior
experience at an investor-owned utility, Daniel has 10 years of experience in regulatory affairs.
Chugach Electric Association, Inc. (Chugach)
Bruce Aspray, Manager of Transmission & Substation Engineering & Planning, Chugach
Bruce Aspray is a professional with experience in the industrial power and electrical utility
industries. Mr. Aspray has specified, built, commissioned, and operated a combined cycle
power plant as well as open air and GIS substations. Mr. Aspray is a degreed and licensed
Professional electrical engineer in the State of Alaska. He is experienced in project management
and construction of utility grade facilities including generation, transmission, substations,
distribution, and renewables.
Andrew Laughlin, Chief Operating Officer, Chugach
Andrew Laughlin is a professional with a diverse background in the power industry, specifically,
power delivery project development, design, procurement, project management and
construction. He is a licensed Professional electrical engineer with experience that includes
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construction of transmission and substation infrastructure as well as upgrading Static VAR
Compensation, boiler controls and steam turbine generation systems. Mr. Laughlin has
developed project teams for large and small complicated projects.
Dustin Highers, Vice President Corporate Programs, Chugach
Dustin Highers is an electric utility professional with a background in power plant operations,
maintenance, construction, commissioning, and engineering support. Mr. Highers’ industry
experience includes 30 years in various industries including maritime, oil and gas, power plant
construction and commissioning, gas turbine field engineering, and electric utility engineering
and management. He is the leader of small and large teams in the execution of enterprise level
projects to achieve corporate goals and objectives. Mr. Highers has demonstrated skill in
complex program and project management for power generator maintenance and large
generation construction projects.
Matanuska Electric Association (MEA)
MEA is a generation, transmission, and distribution cooperative that in serving the needs of its
members designs, permits, builds and maintains distribution and transmission lines, as well as
transmission level and distribution level power substations. Projects may be standalone efforts
for our members or in partnership with project developers or other interconnected utilities.
MEA has in-house design, land services, and construction expertise required to complete these
projects, but is also supported by local and nation-wide engineering firms, construction
contractors, and equipment supplies. Additionally, our team is competent and experienced in
the areas of procurement, contracting, public outreach and engagement, regulatory and
legislative affairs, and finance/accounting to support these efforts.
Ed Jenkins, Chief Operations Officer, MEA
Ed Jenkin is a licensed Professional electrical engineer in the State of Alaska with more than 30
years of experience in the utility industry. He is presently the Chief Operations Officer for MEA.
In this role he has oversight of MEA’s system planning, engineering, operations, technical
services, and power system dispatch functions. Within the interconnected Alaska electric utility
system Mr. Jenkin has led or worked on multiple collaborative efforts, such as: Railbelt electric
reliability and cybersecurity standards development, joint asset management and operations,
power pool formation between Matanuska Electric and Chugach Electric, legislation on the
formation of an electric reliability organization, and regulations on net-metering, regional
planning, and standards enforcement. Mr. Jenkin graduated with a Bachelor of Science Degree
in Electrical Engineering from the University of Alaska, Fairbanks in 1984. He also has a Master
of Arts degree in cross-cultural studies, because people are important.
Julie Estey, Senior Director of External Affairs and Strategic Initiatives, MEA
Julie Estey is the Senior Director where she manages the cooperative’s public and member
facing activities along with the organization’s strategic plan and special projects. She serves as
the organization’s representative, past Chair and founding member of the Railbelt Reliability
Council, the recently certificated Electric Reliability Organization for the interconnected Railbelt
grid. Before joining MEA, Ms. Estey was the Business Director for the Alaska Center for Energy
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and Power, an energy research group at the University of Alaska Fairbanks focused on
improving how Alaskans generate and distribute power. She has experience managing public
outreach and engagement for controversial transmission and generation capital projects as well
as expertise bringing diverse groups of stakeholders together to develop common solutions.
Homer Electric Association, Inc. (HEA)
HEA performs generation, transmission, and distribution functions under a cooperative
structure that has built and maintains hundreds of miles of transmission lines. HEA has
constructed and maintains modern transmission substations in ring bus or breaker-and-half bus
configurations, with modern digital protection and control systems. HEA retains in-house design
and construction expertise required to complete these projects; however, can draw upon local
and nation-wide engineering firms, construction contractors, and equipment supplies. Our
team is competent and experienced in procurement, contracting, public relations, regulatory
and legislative affairs, and finance/accounting to support these efforts.
Keriann Baker, Director of Member Relations, HEA
Keriann Baker, HEA’s Director of Member Relations, oversees HEA’s customer service programs,
public relations efforts and legislative affairs. Baker practiced law with Reeves Amodio in
Anchorage and Lewis, Longman & Walker in Palm Beach County, Florida, prior to joining HEA.
She serves as vice chair of the South Peninsula Hospital, Inc., board and previously has served
on numerous boards including several local and state chambers of commerce as well as state
and national bar associations. Ms. Baker received a Bachelor of Science from Utah Valley
University, Orem, Utah, and her juris doctorate from Loyola Chicago School of Law, Chicago, IL.
Larry Jorgensen, Director of Power, Fuels, & Dispatch, HEA
Larry Jorgensen, HEA’s Director of Power, Fuels & Dispatch, manages the operation and
maintenance of HEA’s generation facilities, and generation dispatch. His skills include project
design and management, advanced control systems, simulation and modeling, plant
commissioning and startup, personnel training and advancement, and standards
development. Mr. Jorgensen received an Associate in Applied Science in Power Plant
Technology and Bachelor of Science in Energy Management both from Bismarck State College,
Bismarck, North Dakota. He has been with HEA since 2011.
Independent Contractors
Rena Miller, Independent Contractor
Rena Miller is an independent contractor supporting the project team with the Community
Benefit Plan. She most recently managed the Railbelt electric utilities' application to State
regulators to serve as electric reliability organization. Rena worked more than 10 years for the
Alaska State Legislature, serving as Chief of Staff to the Senate President and as the Senate
Majority's oil and gas policy advisor. Her time with the Legislature included policy development
and advancement on electric and other energy issues, and experience in stakeholder outreach,
consensus building and compromise.
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U.S. Department of Energy
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Concept Paper
Battery Energy Storage/HVDC Coordinated Control
Topic Area: Smart Grid
Applicant: LSI submitting this concept paper on behalf of Matanuska Electric Association
representing The Bradley Lake Project Management Committee (BPMC)
Technical and Business Points of Contact: Brian Hickey P.E., PMP.
The BPMC is a collaborative group of decision makers that represents all the primary
transmission owners and operators of Alaska’s largest electrical grid (the Railbelt). The BPMC
consists of the following organizations:
1. The State of Alaska dba The Alaska Energy Authority (AEA)
2. Chugach Electric Association Inc., a Central Region cooperative (CEA)
3. Golden Valley Electric Association Inc., a Northern Region Cooperative (GVEA)
4. Homer Electric Association Inc., a Southern Region Cooperative (HEA)
5. Matanuska Electric Association Inc., a Central Region Cooperative (MEA)
6. The City of Seward Alaska. dba Seward Electric System (SES)
Project Location: All three regions of the Alaska Railbelt electrical system
Area served by
the Railbelt Grid
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Project and Technical Description
Alaska and the nation are at a crossroads. We are at the nexus of the need to develop a fuel-
diverse low-carbon economy and a once in a generation opportunity to invest in infrastructure.
At this intersection, the collective mission of the Railbelt utilities and the State is to build a
resilient, clean, smart, and low-cost electrical grid. The grid of the future supports a fuel-diverse
energy landscape that drives sustainable economic development in the state and ensures the
cost-effective delivery of energy to the consumers of the Railbelt and beyond. The Railbelt
utilities, acting together through the BPMC, have a shared vision: a collaborative future in the
Railbelt in which our communities come together and share resources to strengthen and build a
smart, clean electrical grid that allows our members, our national defense infrastructure, and
the communities adjacent to the Railbelt access to clean low-cost energy resources.
The Battery Energy Storage/HVDC Coordinated Control Project, the subject of this GRIP Topic 2
Concept Paper, is one of a series of projects that constitute the BPMC’s Grid Modernization and
Resiliency Plan (GMRP or Plan)1. Through the GMRP, there exists an opportunity for a
transformational series of transmission infrastructure improvements estimated to cost ~$2.9 B.
Successful implementation of the GMRP will prepare the Railbelt grid in terms of resiliency and
reliability necessary for the development of a more fuel diverse low carbon reality in Alaska
that can serve as a model for the rest of the United States and the world.
As described throughout this Concept Paper and other subsequent papers, the Railbelt grid is
an isolated2, long-distance, fully functioning, electric grid built on a relatively small scale that
serves nearly three quarters of Alaska’s population with aging infrastructure, inadequate by
traditional industry standards. Through the GRIP, the BPMC recognizes that there is an
opportunity for a successful modernization of the Railbelt grid primed to facilitate
decarbonization of the broader Alaska economy. Due to the diversity within the Railbelt and
scale of the infrastructure, the federal government has an opportunity to utilize the Railbelt
grid as a model to demonstrate both the objectives and vision of the bipartisan Infrastructure
Investment and Jobs Act (IIJA) and other initiatives. The lessons learned from this prototype will
have broad applicability to the larger grids of the contiguous lower forty-eight states.
Discussion on how this project fulfills the GRIP FOA eligibility requirements begins on page ten
of this document.
As discussed more fully in the Community Benefits Plan, the Railbelt region is home to
numerous federally recognized tribes and disadvantaged and underserved communities. There
are over 200 federally recognized tribes in Alaska, many in the Railbelt region, and based on the
2015 census Anchorage was home to the three most culturally diverse census tracts in the US
(followed closely by Queens, New York). One hundred and ten languages are spoken in the
1 Fundamentally the GMRP consists of three interregional transmission interconnections: 1) Upgrades to the
Railbelt Backbone, the RBR, 2) a second interregional tie between the Southern, Central and Northern Regions and
3) A third interregional tie between the Central Region and Northern Region integrating the Copper River Valley
(currently a stand-alone system) into the Railbelt Grid and providing a second feed into the U.S. Department of
Defense mid-course ground based missile defense system at Fort Greely.
2 The Railbelt is a stand-alone grid not interconnected with any other electric system.
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Anchorage School District alone. With this socially and economically diverse makeup, the
Railbelt is the ideal area for the federal government to demonstrate how the benefits of the IIJA
can be maximized.
The Railbelt serves five military bases, as depicted in figure 1, each of which has a vital strategic
importance to national security. These critical bases contribute to the national defense from a
broad range of perspectives including missile defense, global telecommunications downlink
infrastructure, and F-22 high-speed intercept capability. As noted in the White House’s release
of the Indo-Pacific Strategy in February 2022, these defense capabilities are vital to our national
security and prosperity. The GMRP will support the transition of Alaska-based US DoD assets to
a low carbon future.
Figure 1: Military Bases Served by The Railbelt
The Railbelt is essential to the broader state economy. The Port of Alaska, a federally
designated Strategic Seaport, serves as the primary point of entry for virtually all cargo, food,
building materials, and fuel for the vast majority of Alaska’s population. Additionally, Anchorage
International Airport is the fourth busiest international airport in the world in terms of cargo
throughput. The Railbelt is home to significant mining operations, including that of rare earth
minerals critical to the US national security and other strategic imperatives. These assets are
vital to the economy and security of both Alaska and the Nation.
Through the BESS Project, the Railbelt and the State will experience broad and substantial
benefits. Those benefits include increased transmission capacity, and enhanced interregional
transfer capability, optimized network topology, improved system efficiency and reliability,
Railbelt Military Bases
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increased operator situational awareness, reduction in carbon emissions, integration of
renewables and other low carbon generation sources, facilitation of decarbonized beneficial
electrification, and the eventual decarbonization of the electric grid.
More significantly, this Project and the broader Plan will help lower electric rates throughout
the State. Alaskans pay some of the highest electric rates in the country, which
disproportionately impact the disadvantaged and underserved. Lowering rates on the Railbelt
will in turn help address the high cost of energy in rural Alaska not served by the Railbelt, close
to 30% of the state’s population. This cost is mitigated through the State’s Power Cost
Equalization Program, based in part on the price of Railbelt electricity. The GRIP Program’s
objectives are met and complemented by the BPMC’s goal of a resilient, clean, and low-cost
electrical network that supports sustainable economic development in the region,
decarbonization, and cost-effective delivery of energy.
All of the electric utilities in the Railbelt are electric cooperatives3. Thus, virtually all benefits
from this grid modernization effort flow directly to the member-owners, the residents of the
Railbelt. Effectively, the Railbelt is a proving ground where DOE and other federal agencies can
evaluate and successfully demonstrate transmission resiliency improvements in preparation for
electric decarbonization both technically and on a community basis. Notably, in the Railbelt
electric grid, this can be achieved at a relatively low cost. The RBR project will have full support
and collaborative cooperation of the BPMC project team. This team consists of representatives
of each of the five Railbelt electric utilities4 and the State of Alaska, dba, AEA. The BPMC team
members are committed to the GMRP, subject to governance board approval and vetting
through the National Environmental Policy Act (NEPA) process. The team plans to apply for all
IIJA and Inflation Reduction Act (IRA) applicable federal assistance for GMRP projects. In
addition, the team is seeking State appropriations to augment these federal funds. The GMRP
upgraded grid will create an unrestricted electron freeway and prepare the Railbelt to optimize
the use of cost-effective, low-carbon energy technologies by eliminating current technical and
geographic constraints.
Background
The Railbelt Grid
The Railbelt electric grid is unique in North America as it is technically a fully functioning long-
distance electrical grid on a very small scale. The Railbelt is characterized by three load-
generation regions with four load-balancing areas. These load-balancing areas do not coincide
precisely with the load-generation regions. These load-generation concentrations, known as the
Northern Region (Fairbanks-Delta Junction), the Central Region (Anchorage-MatSu), and
Southern Region (the Kenai Peninsula), are tied together with two long transmission lines
3 Except for the City of Seward-a municipal, public power utility at ~1% of total Railbelt electricity demand.
4 The five Railbelt Electric Utilities consist of Golden Valley Electric Association Inc. in the Northern Region,
Matanuska Electric Association Inc. and Chugach Electric Association Inc. in the Central region and Seward Electric
System and Homer Electric System Inc. in the Southern Region.
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operating at 115kV and 138KV. The grid provides electricity to approximately 70% of the state's
residents and generates 80% of the electricity in Alaska. It extends over 700 miles from the
Bradley Lake Project, located at the head of Kachemak bay near Homer, Alaska, in the Southern
Region, to Delta Junction in Interior Alaska, roughly the distance from Washington, DC to
Atlanta, GA as depicted in figure 2. The grid traverses inhospitable mountainous subarctic
terrain. The region is laced with highly active seismic zones and is subject to volcanic eruptions,
forest fires, flooding, and fierce annual winter storms. The grid's assets vary from high voltage
(138 kV and 230 kV) submarine cable crossings in Cook Inlet5 to remote "helicopter/riverboat -
access-only" river crossings and numerous transmission structures well above 2000 feet.
Unlike numerous areas in the contiguous lower forty-eight states, the Railbelt has received
minimal federal investment in grid development. The Eklutna Hydroelectric Project, initially
constructed in the 1950s, was the last major federal project in the Railbelt that included a
transmission line component. This project was rebuilt by the Bureau of Reclamation's Alaska
Power Administration after the 1964 "Good Friday” Earthquake and sold by the Federal
government to Central Region utilities in the early 1990s.
The Northern Region is marginally interconnected, primarily at 69kv and 138kV. The Central
Region is moderately well interconnected with multiple 230, 138, and 115 kV lines. The
Southern Region is also interconnected at 115 kV but includes a radial feed to the SES system. A
tight power pool operates in the Central Region, and an active economy energy market exists
but is severely limited by transmission constraints. A reserve-sharing pool exists between all
three regions. Due to the relatively feeble regional interconnections, the Railbelt Grid is
technically characterized as "transient stability limited," with machines under dynamic stress
swinging against other machines within the region; and with regions swinging against each
other across the light interregional interconnections. The grid is susceptible to and has
experienced large-scale6 small-signal instability oscillations during the annual nexus of low lake
elevations at Bradley Lake, summer valley load conditions, and faults on the Alaska Intertie
nearly 300 miles north of the Bradley Lake Project.
Voltage stability, which varies from marginal to good depending on the specific area, has been
improved with the addition of six static VAR compensators at critical locations. The Railbelt Grid
operates under a subset of North American Electric Reliability Corporation (NERC) standards
modified to account for the scale and nature of the interconnection (the grid's system bias is
variable and ranges from 3-10 Mw/.1 hertz). In 2024 these standards will become mandatory
and enforceable under a recently formed and certificated Electric Reliability Organization, as
developed through the Railbelt Reliability Council. The grid has a sophisticated under-frequency
load shed scheme which sheds load to match generation in four stages with varying time delays
and, in some cases considering frequency rate-of-change. Traditional day-ahead and real-time
5 Cook inlet is a silt laden 180-mile inlet reaching from Knik Arm to the Gulf of Alaska. The Inlet has the fourth
highest tidal range in the world at 30.3 feet and contains an endangered subspecies of the Beluga Whale.
6 Oscillations have been measured with a peak of 275MW, a 1.1 sec period and sustained for over 90 seconds on a
grid with a summer valley peak load of approximately 500MW.
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security constrained economic dispatch are run in each LBA with net interchange, and
frequency monitored and managed to NERC CPS 1 and 2. Dynamic events on the grid occur and
resolve very quickly (2-10 seconds) when compared with the much larger North American grids
(the Eastern Interconnection, the Western Interconnection, and ERCOT), which resolve in tens
of minutes. The grid's peak demand is roughly 750 MW compared to ERCOT's (by far the
smallest of the North American interconnections) peak demand of 85,000 MW. The grid's
annual energy consumption is approximately 4,800 GWH compared to ERCOT at 339,000 GWH.
The Railbelt’s Grid Modernization Resiliency Plan (GMRP)
Today, multiple change drivers are reshaping the broader energy landscape in Alaska and across
the world. Geopolitical shifts are dramatically altering global energy markets. Decarbonization
policies and technological advancements, shaped by increasingly dramatic climate change, are
both the result of and contributing to a shift in popular sentiment about energy and the
environment. Regionally, uncertainty around Cook Inlet Natural gas and broader fuel supply
issues for the utilities is a critical – and shared – challenge looming on the near-term horizon.
In response to this shared challenge, the BPMC has come together to develop a broad-based,
long-term plan to ensure the future energy viability of the Railbelt from a social, economic, and
technical perspective. The technical aspect of that Plan is the GMRP, of which the Battery
Energy Storage/HVDC Coordinated Control Project is a component. This Plan will be
incorporated into Alaska’s broader State Energy Security Plan as that document is developed in
the coming months.
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We intend to apply for
federal funding assistance for
specific GMRP components
in each of the five funding-
year periods of the GRIP, IRA,
and USDA RUS loan
programs. In addition to our
federal funding requests, we
are seeking State assistance
and the remainder of the
total plan costs will be
funded by Railbelt utilities.
Our estimated total cost for
the GMRP is $2.87B over
fifteen years. Without
significant Federal and State
investment, the GMRP plan
and this Project are beyond
the capabilities of the
Railbelt utilities and AEA. The
team assembled for this
Project as shown below
consists of stakeholder
outreach experts, engineers,
project managers, and all the
executive-level decision-
makers in the Railbelt. The
Team will work diligently to
integrate other regional
stakeholders into the
process.
Figure 2: Railbelt Grid Modernization and Resiliency Plan (GMRP)
The priority in diversifying the Railbelt fuel supply and decarbonizing the Railbelt Grid must be
stabilizing its primary control variable frequency and decongesting the transmission system.
These improvements are required irrespective of the nature of fuel supply diversity and
decarbonization solutions. In 2010 the Railbelt's frequency was equal to 60Hertz approximately
44 % of the time. By 2021, the grid operated at 60Hertz about 17% of the time. The primary
causes of this deterioration of frequency control are the introduction of lighter, more efficient
aero-derivative turbines, efficiency-driven (as opposed to response-driven) plant control
systems, and non-dispatchable renewables in the form of solar and wind generators.
Decongesting the grid will require upgrading existing transmission lines and building a new
transmission interconnection from the Kenai to the Central Region and on to Healy in the
Northern Region. A subsequent phase will include a transmission interconnection from Wasilla
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to Glenallen and north to interconnect with the GVEA system at Fort Greely and the Ground-
Based Mid-Course Missile Defense system.
The following table outlines the high-level timeline and associated estimated costs for the
GMRP. The priority and timing of these projects may vary given the outcome of NEPA
processes, the evolving nature of low carbon generation development, and Cook Inlet fuel
supply changes.
The Project
As noted, the Railbelt is a 700-mile electrical system currently interconnected by single
transmission lines between three major load centers. Due to the single points of
interconnection and long transmission distances, the system is transient stability limited over
each of the interconnecting transmission paths. Transfer limits are imposed by stability
concerns across each of the interconnecting transmission lines and are impacted by system
conditions across non-contiguous areas. The weak interconnection prevents the economic
integration of renewable energy as well as the economic development of hydroelectric
generation, and optimal-hydro-wind thermal coordination.
With a 750 MW peak load and a minimum load of only 450 MW, the per-customer cost of new
transmission lines or technology that could be used for increased power transfer and resiliency
is significantly high, especially compared to the cost of such equipment elsewhere. For
instance, transfers from the Southern Region to the Central Region are limited to only 75 MW.
To increase this limit to 150 MW or more from the south to the north, a High Voltage Direct
Current (HVDC) undersea transmission cable is required, coupled with various battery energy
storage systems (BESS) in the Central and Northern regions.
The HVDC and BESS controls can stabilize the dynamic interactions between the Railbelt
regions, thereby increasing the transfer capacity by relieving the stability and reliability
limitations of the transmission system. This project will take a holistic approach to tuning the
HVDC and BESS controls and providing system operators with real-time transfer limits and a
wide-area visualization of the whole system.
This project will increase the transfer capacity between the three regions, mitigate the risk of
blackouts for any region, and provide resiliency to restore power within four hours during
unforeseen events. It will also provide for coordinated and effective amounts and locations of
required reserves and facilitate the integration of renewables and other low-carbon generation
sources. The project will utilize the characteristics of future HVDC converters, coupled with
control characteristics of the existing and future Battery Energy Storage Systems, spread
throughout the Railbelt's three distinct and geographically separate regions. Subsequently, it
Grid Modernization and Resiliency Plan (GMRP)
Decarbonization and Fuel Diversity Transmission Build-Out 2023-2027 2028-2032 2035-2037
Southern Region (Kenai Peninsula) to Central Region (Anchorage Mat-Su) + Energy Storage $934,000,000
Central Region to Northern Region (Fairbanks-Delta Junction) Phase 1 $981,000,000
Central Region to Northern Region Phase 2 and Roadbelt (Wasilla-Glenallen-Delta Junction)$958,000,000
Total Fifteen Year Transmission Spend $2,873,000,000
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will significantly increase the frequency and scale of energy transfers between the three
regions. Further, the project will balance the location and effectiveness of system contingency
reserves to ensure that they are located and deployed to provide for the entire system.
Coupled with the HVDC and BESS controls will be high-speed wide-area monitoring systems
(WAMS) and adaptive control to automatically assess possible instabilities and take positive
action to prevent system collapse or separation. Should system separation or partial collapse be
experienced, the control system will make suggestions to system operators to utilize the HVDC
and BESS control systems. This process, coupled with available conventional generation and
variable generation, will allow operators to maintain stability control and monitor the recovery
and restoration of service.
During normal system operation the HVDC/BESS and smart grid controls will monitor the
relative power angle across the major ties and adjust power flows and outputs to optimize the
use of renewables in each area of the grid. Additionally, it will enhance the use of hydro
resources for reserves and monitor identified system variables to predict instability or the
small-signal instability oscillations prevalent in the Railbelt. The control systems will work in
concert to ensure that the total BESS power and energy available to the system is used in
conjunction with the HVDC controls to maximize reliability and renewable power production
while maintaining grid reliability.
Due to the Railbelt’s weak transmission system, during transmission faults in one area of the
grid all three areas of the Railbelt experience different transient frequencies. These differences
in transient frequencies are the drivers behind system instability, transfer limitations, and the
possible collapse or islanding of the three systems. By measuring system frequency in each area
of the interconnected system and utilizing a coordinated approach to transient system
frequency stabilization, the relative differences between transient frequencies can be
decreased. Additionally, the total frequency difference across the system can be reduced
through coordinating the amount of frequency control each BESS is responsible for during a
transient event. A decrease in the transient frequency differences across the transmission
path(s) ultimately increases the stability rating of the transmission path and increases the
transfer capacity with little capital investment. The use of coordinated control of HVDC and
BESS controls can significantly increase the stability limits of transmission paths above their
current path rating when compared to uncoordinated controls.
Specifically, the HVDC and BESS controls will be optimized to relieve the transmission
constraints that limit renewable development and provide system optimization of reserves that
inhibit the optimized use of both hydro and thermal reserves.
Currently, transmission constraints and lack of resiliency limit access to the largest hydro
resources in the system, especially when needed to provide regulation for variable renewable
generation. In addition, the constraints inhibit the development of additional hydro resources
that currently lack the transmission capacity to support the new hydro resources. System
transmission studies have proven that properly tuned HVDC ties and BESS controls can
significantly increase the transmission capacity between regions. Furthermore, it provides the
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ability to unlock the larger hydro resources needed in the south to help regulate system
generation during periods of high renewable energy.
Coordinated controllers will be designed to act together, improving system resiliency. The BESS
and HVDC coordinated interaction will increase the available power and energy in critical areas.
Real-time information will be provided to system operators on the total amount of power and
energy available from the BESS and HVDC systems and where it can be deployed.
The coordinated BESS controller will evaluate the need and location for generation and
transmission contingency reserves to ensure that both requirements are optimally met, without
excessive cost. Reserves will be automatically scheduled based on system resources, real-time
transfers, and possible contingencies. Dispatching reserves as a system in conjunction with
other BESS requirements will allow the system to dispatch the total capability of the system
BESS’s to meet the net regulation, contingency, and resiliency requirements as opposed to
being evaluated as individual resources. The overarching goal is to increase transfers, reduce
energy costs across all regions of the Railbelt, increase renewable generation, and provide
system operators with a single source of control and monitoring for BESS, HVDC, and system
path flows.
While all of these changes and drivers behind them are diverse, the one common and
important issue for every concern is to optimize the use and capability of every resource that
constitutes our transmission grid and increase the capabilities of the grid by control or other
non-wire alternatives to the greatest extent possible.
The total estimated cost for the BESS Project, proposed in this concept paper, is approximately
$29.35M. On December 2, 2022, the BPMC, through AEA, closed on a bond package for $166M,
35% of which will be dedicated to the BESS and 65% to the Railbelt Backbone Reconstruction
(RBR) Project. We are also seeking State funding assistance7 to help close the gap between
utility funding and federal assistance.
7The October 26, 2022 letter from Railbelt Utility Managers to Alaska Governor Michael Dunleavy is available for
review.
Railbelt BESS Coordinated Control Program 2023-2027
Southern Region - coordinated control & BESS augmentation 3,500,000$
Central Region - coordinated control & BESS augmentation 5,700,000$
Northern Region - control & BESS augmentation 4,900,000$
System Studies defining control coordination 2,600,000$
Control system programming 5,600,000$
Communication improvements 6,500,000$
System Opeator control center improvements & coordination 550,000$
Total project cost 29,350,000$
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U.S. Department of Energy
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Figure Three is an image of the three
regions of the Railbelt grid with the
current system and the GMRP proposed
improvements overlayed.
The transmission constraints to be
addressed through the use of coordinated
BESS control are the single line currently
connecting the southern and central
systems and the single line connecting the
central and northern systems. The two
transmission paths are indicated by the
white ellipses on the map.
The map provides a good representation
of the physical distance of the Railbelt
transmission system and the advantages of
increasing the transfer capacity using non-
wire alternatives.
Figure 3: Railbelt Grid
Project Eligibility
This Project will meet all six of the six eligibility requirements:
A) Increase transmission capacity and operational transfer capacity.
Coordinated control of the BESS and HVDC systems will decrease the difference in transient
frequency during contingency events and will increase the stability limit and therefore the
transfer capacity of the system.
(B) Improving the visibility of the transmission system.
The coordinated control system will provide real-time values for transfer limits across the length
of the system. Stability limits will be available to all system operators. During resiliency
conditions, the total amount and location of BESS systems will be available to system operators
across the system, including those portions of the system not impacted by the event to allow the
optimized use of all system resources.
(C) Enhance secure communication and data flow between distribution components.
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The HVDC/BESS coordinated control system will require communication paths and equipment to
be upgraded to redundant path, high-speed communication networks throughout the length of
the Railbelt transmission system. The coordinated BESS control will need to have real-time
topology and power flow status of the transmission system and major distribution centers to
accurately forecast the distributed response of the coordinated control.
(D) Aggregation and integration of distributed energy resources and other “grid edge” devices.
The coordinated control of the utility grade HVDC/BESS systems will present the first
opportunity to deploy technology control of grid enhancement services utilizing grid edge
devices throughout an entire islanded transmission and distribution system. It will provide the
first insight into tactics, problems, and solutions as to how network wide integration could be
deployed in larger interconnections in the future. The Railbelt network is much weaker than
larger grid systems, therefore, the success and failures of different technology deployments can
provide insights and learning experiences applicable to much larger roll-outs in the future.
(I) Enhancing interoperability and data architecture of systems.
Monitoring locations across the network, and speed of information acquisition, provides the
unique ability to disperse information to every technology in transmission/distribution systems.
Thus, the HVDC/BESS control and monitoring system serves as a gateway of information for
other systems enabling informative decisions on system response and resource deployment.
(J) Anticipate/mitigate the impacts of extreme weather or natural disaster on grid resiliency.
The HVDC/BESS coordinated control system will monitor the power system condition and
provide system status information to operators during all weather conditions. The most severe
planning contingency for the Railbelt system is an extreme earthquake that causes damage and
outages to the electrical infrastructure and fuel supplies to power plants. Immediately following
a major earthquake, the BESS control system will provide real-time status of the electrical
system as well as the status of fuel and water deliveries to the electrical system. Additionally, it
will provide system operators with real-time network topology and available network
restoration resources. System operators will be able to utilize variable generation to restore
system topology and loads through the coordinated use of the BESS and HVDC systems.
Project Grid Benefits
The coordinated HVDC/BESS response will increase transfer limits across each Railbelt
transmission path while simultaneously improving efficiency by providing transmission and
generation contingency reserves. The Project will also increase automated situational
awareness and provide greater ability to integrate inverter-based generation resources.
For example, in the Southern part of the system, the existing transfer capacity is approximately
75 MW at 115 kV. By coordinating the response of the HVDC/BESS systems located in the
Southern, Central, and Northern Regions of the system, studies indicate the southern transfer
limit could likely be increased by over 150%, allowing expanded use of the area’s largest hydro
resource and providing support of more renewables in the Central and Northern Regions.
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Currently the scheduling of reserves for transmission/generation contingencies and frequency
regulation is dispatched independently by each Load Balancing Area (LBA). This leads to non-
optimized use of the BESS systems as each LBA schedules resources based on individual load
balancing as opposed to the needs of the entire system. This consumes large amounts of BESS
capacity that are reserved by individual areas, but never utilized because the entire system
does not require their deployment. For instance, variable generation resources located on
remote ends of the transfer path are scheduled to maintain only expected transfers across the
interconnecting transmission path. A renewable resource with a 40 MW swing on the southern
path will require a 40 MW allocation of reserves from a southern BESS. Similarly, a variable
resource on the northern edge of the Railbelt system with a 30 MW swing would require a 30
MW reservation on the northern resource. These two variable resources would consume a total
of 70 MW of BESS reserve capacity. However, by measuring real-time transfers and the impacts
of the 500-mile spatial diversity of the swing, the actual reserve requirement across the
combined BESS systems could be less than 10-15 MW, thereby allowing considerably more
renewables to be interconnected to the system without a degradation in service or reliability.
Project Risk Reduction
The concept of micro-control of frequency deviations during transient events to increase
transfer path ratings can be applied to all major grids and micro-grids. The ability to positively
increase transfer limits, control oscillations, and increase resiliency across different portions of
entire grids will provide valuable lessons for other US grids and microgrids, particularly with
respect to monitoring and control of grid edge devices.
Project DOE Funding Leveraging Outcomes
DOE investment in Coordinated BESS Control will unlock State8 and local Cooperative funding
for this Project and increase any benefits realized by the subsequent GMRP. By advancing the
coordinated BESS control, the Railbelt system will realize an increase in transfer capacity across
all constrained areas and operate in a more effective an efficient manner allowing the
incorporation of a substantial increased level of renewables.
Project Readiness, Viability, and Expected Timing
The installation of the three regional BESS projects is currently underway with the Southern
BESS currently in-service and two additional BESS sites under various stages of development.
The coordinated control system could be developed and implemented; and provide many
system benefits while the HVDC interconnection and required communication improvements
are being constructed. Each improved communication system, additional resource, or HVDC
control system will be incrementally added to the scheme’s capabilities. However, these are not
required for its initial operation or for immediate improvements in stability limits, resiliency or
reserve optimization. This project could be initiated in the second or third quarter of 2023.
8 See October 26th letter from the Railbelt Electric Utility managers to Governor Dunleavy.
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Community Benefits Plan
BPMC’s Battery Energy Storage/HVDC Coordinated Control Project presents a unique
opportunity to increase reliability, provide clean energy options, and reduce electricity rates for
a 700-mile-long stretch of Alaska that serves as the state’s economic backbone and is home to
approximately two-thirds of the state’s population. The same Railbelt region includes or is
proximate to several Disadvantaged Communities (DACs), extensive veteran, Pacific Islander,
and Alaska Native populations, and some of the most diverse neighborhoods in the nation.
Furthermore, the State of Alaska’s Power Cost Equalization program extends the financial
benefits of lower Railbelt electric rates to positively impact additional remote communities
statewide; even populations not connected to the Railbelt’s electric network benefit from
reduced Railbelt rates.
Having missed out on the federal government’s transformational infrastructure investments
before Alaska statehood, residents of Alaska have long borne outsized infrastructure costs
spread across relatively few homes, businesses, and industries. Alaskans have experienced a
lack of redundancy and infrastructure that would be considered unacceptable in other parts of
the US. Federal support would be a step closer to providing parity to Alaskans, including
numerous DACs as well as tribal entities and rural communities.
BPMC intends to identify project benefits, the anticipated recipients, and metrics to track and
measure the benefits in its Community Benefits Plan (CBP) to meet the federal government’s
four target goals (outlined below). BPMC’s approach to this plan will be stakeholder driven,
involving communities and entities anticipated to become partners through the project
planning, execution and operations stages.
CBP development will benefit from early engagement with potential partners and stakeholders
in order to define measurable project benefits, set workforce goals, and advance formal
partnerships for inclusion in the CBP. Individuals in impacted communities and local institutions
can provide invaluable insight into potential project benefits and outcomes that will inform the
project development and execution. This stakeholder participation is critical up-front to ensure
the project delivers expected benefits that reach the intended communities, while reducing
possible adverse impacts.
Defining the affected stakeholders early, establishing clear, durable communication channels,
receiving their concerns, and crafting measures to address those concerns is critical to
managing project risks and ensuring desired objectives. Clear communication and collaboration
during development of the project application and the CBP will set a foundation for
implementing the CBP during project development, construction, and operations. This
engagement should be a continuous loop through the project design and execution.
Stakeholder engagement is central to the BPMC partners’ regular businesses, with four
member-owned electric cooperatives, a municipally owned utility, and a state entity. BPMC
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believes this extensive experience will provide key support in the CBP development and
execution. Early engagement with stakeholders is also expected to further the ability of
communities, individuals and local governments and Tribal entities to unlock additional funding
opportunities tied to the project. To that end, BPMC will develop a robust community benefit
plan around the four FOA elements as detailed below. Across all elements, BPMC’s approach is
founded on the belief that direct, early communication and a meaningful exchange with other
entities and communities will inform CBP development.
Element 1: Community and labor engagement leading to negotiated agreements
BPMC’s utility members have established, long-term, and mutually valued relationships with
the organized labor community in Alaska. The Railbelt utilities have used project labor
agreements in the past for projects of this scale e.g., construction of the Alaska Intertie. Each of
the Railbelt utilities has collective bargaining agreements with the International Brotherhood of
Electrical Workers among other unions. The BPMC’s approach to the CBP will be to engage its
labor partners early to initiate discussions toward labor agreements. The CBP would establish a
timeline and milestones for negotiations with organized labor, including discussions on local
and targeted hiring goals, card-check neutrality, and possible provisions advancing programs to
attract, train and retain new workers.
As the project proponent, BPMC’s team includes the State of Alaska’s energy organization,
Alaska Energy Authority. The utilities and AEA have a successful record partnering both as
owner/partners in shared capital projects and in advancing state energy goals and priorities.
With state support affirmed in this way, the BPMC’s CBP would prioritize establishing and
formalizing relationships with tribal entities, local governments, and other State of Alaska
departments with a focus on workforce and related issues. Early engagement with these core
stakeholders will also help ensure the project is cognizant of and in support of local energy
plans and goals.
The BPMC as an entity and its utility members individually are accustomed to engaging with
local governments and tribal entities through permitting and regulatory processes for capital
projects. The CBP for this project would establish milestones urging earlier dialogue with local
governments and tribal entities. These conversations should begin sufficiently early to inform
project development in response to local communities’ needs and concerns, and to guide
iterations of the CBP. Local governments and tribal entities are uniquely situated to help
identify the most effective actions the project can take toward partnerships that advance
workforce issues; diversity, equity, inclusion, and accessibility; and the flow of project benefits
to disadvantaged communities.
BPMC members have extensive experience engaging with local residents and businesses in
town halls and similar formats; AEA is a State entity with obligations to the public interest, and
the electric utilities are member-owned cooperatives (one is municipal with direct
responsibilities to the city’s residents). The CBP will articulate a plan and schedule for these
engagements to ensure individuals and businesses are aware of the project, including potential
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economic and clean energy opportunities the project could enable, and to receive and
incorporate concerns and input into project development plans.
Element 2: Investing in job quality and workforce continuity
Given Alaska’s relative isolation and general need for living wage jobs, the BPMC’s members
firmly support the development of workforce training institutions. The stakeholder engagement
articulated above is expected to further inform the project team of workforce issues and
opportunities, including opportunities to partner with existing programs and institutions to
ensure a skilled and inclusive local workforce. Such opportunities would be evaluated for
incorporation into the CBP.
Alaska is not a Right to Work state. The BPMC utilities’ employees who are covered by
bargaining unit agreements are required to join unions consistent with the terms and
conditions of the various utility bargaining unit agreements. Further, the utilities maintain strict
policies fostering safe, healthy, inclusive workplace free of discrimination and harassment. The
BPMC’s members support continual development of a skilled, inclusive local workforce,
specifically the IBEW-NECA Alaska Joint Electrical Apprenticeship and Training Trust, individual
utility training programs, the University of Alaska System and other technical training programs.
This track record of investment in the Alaskan and American workforce will be reflected in the
CBP.
Utilities will also continue support of STEM and energy literacy programs throughout the state
as an investment in the future pipeline of critical energy-related jobs.
Element 3: Advancing diversity, equity, inclusion, and accessibility
The BPMC’s CBP will identify and evaluate potential actions to advance diversity, equity,
inclusion, and accessibility in relation to the project. Alaska offers significant opportunities to
engage underserved populations, including Alaska Natives, Pacific Islanders, and veterans.
Stakeholder consultation, including with organized labor, is expected to identify potential
workforce partnerships to encourage participation of these and similar communities in the
project.
Element 4: Contributing to the Justice40 Initiative goal that 40% of the overall benefits of
certain climate and clean energy investments flow to disadvantaged communities
As discussed in the beginning of this section, BPMC believes its project presents a unique
opportunity to extend benefits to much of Alaska, including DACs. The initial approach to this
CBP element would be identifying potential partners and establishing relationships to assist in
the plan development. Potential partners include impacted DACs; State entities such as
Department of Environmental Conservation, Department of Commerce, and Department of
Labor and Workforce Development; academic or public policy/research institutions such as the
University of Alaska, Alaska Center for Energy and Power, and the Institute for Social and
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Economic Research (ISER); as well as tribal and non-governmental entities, many of whom have
prioritized affordable, clean energy as strategic priorities.
BPMC intends to work with partners, stakeholders, and project technical teams to identify
measurable, trackable benefits and determine which benefits are most meaningful to impacted
communities. Engagement with institutional partners will help define disadvantaged
communities within and proximate to the project area, and within the projected reach of the
defined outcomes. Formulation of a stakeholder engagement plan and further consultation
with DACs and other partners could help establish mechanisms to measure and track the
investments and outcomes.
BPMC believes significant benefits can be realized in energy resiliency, reduction of energy and
pollution poverty as well clean energy opportunities throughout the region and state and would
coordinate with partners and stakeholders to quantify these broader benefits within the CBP.
Communities in the project region currently face potentially severe health, safety, and
economic consequences to resulting from grid threats such as earthquakes, severe cold
weather events, and large-scale forest fires often in remote areas. Project implementation is
also anticipated to increase clean energy options throughout the region, including DAC’s and
other rural communities, many of whom are currently powered through coal or diesel-fired
generation.
The project is expected to reduce the potential consequences posed by these risks. The CBP
should also capture the potential benefits of increased opportunities for tying new, clean-
energy projects to the grid, especially smaller-scale projects. Project benefits are anticipated to
include improvements to air quality across the project regions, especially in the Northern
Region and other locations where particulate matter (PM2.5) have risen to non-attainment
levels high enough to trigger remediation efforts through the EPA and concerns are adversely
impacting the economy and human health.
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
BESS Cordinated Response
17
Addendum A
The Railbelt Utilities and AEA have worked together under the auspices of the BPMC for over 30
years. From constructing the project, which was commissioned in 1992 at a cost of
approximately $350M in 1990 dollars, to the most recent addition to the Project the Sterling to
Quartz 115 kV line. The Project added the Battle Creek Diversion in 2018, a $45M diversion
structure that increased the lake’s energy capacity water by approximately 10 percent. On
December 1, 2022, AEA on behalf of the BPMC closed on $166M bond package which will be
used to begin the RBR project by upgrading the Soldotna to Quartz section of the 115 kV
Southern Region to Central region Transmission line (aka the Anchorage to Kenai 115kV line).
Thirty-five percent of the bond issue will be used to fund three regional grid stabilization
batteries, one of which has been constructed by HEA and is currently operational.
Our stakeholder outreach, engineering, and project management teams have many decades of
stakeholder outreach, transmission, and generation engineering, construction, and operations
experience. Most of our engineers are registered professional engineers (PE) and several are
also registered project management professionals (PMP). Combined this group has successfully
constructed and commissioned billions of dollars of grid infrastructure as noted in their
qualifications and expertise included below.
Railbelt Regional Coordination
Brian Hickey, Executive Director, Railbelt Regional Coordination
Brian Hickey is the Executive Director of Railbelt Regional Coordination, working for the CEOs of
the five Railbelt Electric Utilities. He has more than 40 years of experience in electric power
systems and telecommunications. His experience includes executive leadership and
management, strategic business planning, economic alternative analysis, engineering, design,
project management, and maintenance process development and implementation. Hickey has
managed numerous generation, transmission and process development and improvement
projects in his career. Hickey holds a Bachelor of Science in Electrical Engineering from Montana
State University, a Master’s certificate in Project Management from ESI/George Washington
University, and a Master’s degree in Global Finance from Alaska Pacific University. He is a
licensed Profession Electrical Engineer and PMI Certified Project Management Professional.
David Burlingame, Principal, Electric Power Solutions Group Inc.
David Burlingame has been involved in the Railbelt planning and system studies for the Railbelt
since 1985. He has led the completion of system operating studies as well as investigations into
reliability and resiliency issues in islanded electrical grids. He has led many studies for the
Railbelt system including the investigation into solving the reasons for the most recent 250 MW
oscillations in the Railbelt and their possible solutions. He has been involved in system studies
and planning for the Railbelt for over thirty years and has experience in the design of
substations, BESS control systems, Remedial Action Schemes and custom modeling required in
highly variable islanded systems such as the Railbelt. Prior to starting his engineering company,
he was involved in utility operations and engineering for 13 years in the Railbelt. He has been a
licensed professional engineer since 1987.
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
BESS Cordinated Response
18
Alaska Energy Authority (AEA)
AEA’s mission is to “reduce the cost of energy in Alaska.” As Alaska’s lead agency for statewide
energy policy and program development, AEA collaborates with utilities, private companies,
legislators, local governments, and Alaskan energy innovators to diversify the state’s energy
portfolio. On the Railbelt, AEA owns the 120-megawatt Bradley Lake Hydroelectric Project, the
largest in Alaska. AEA recently oversaw the West Fork Upper Battle Creek Diversion
construction, which diverts glacial water from West Fork Upper Battle Creek into Bradley Lake
increasing energy by 10%. In rural Alaska, AEA constructs bulk fuel tank farms, diesel
powerhouses, and electrical distribution grids, and provides technical/community assistance to
rural Alaskans. Our dedicated team of engineers, economists, project managers, loan officers,
and planners help Alaska’s cities, boroughs, utilities, tribal entities, schools, and private
businesses move energy projects forward successfully.
Bryan Carey, Director of Owned Assets, AEA
Bryan Carey has worked more than 20 years on energy projects for the AEA. During that time,
he’s been the project manager for the AEA’s Bradley Lake Hydroelectric Project (Alaska’s largest
Hydro project), Bradley Lake transmission assets, Project Engineer for the Susitna-Watana
Hydroelectric Project, Alaska Industrial Development Export Authority’s (AIDEA) owned
Snettisham Hydroelectric Project and substantially participated in Railbelt Integrated Resource
Planning. In addition, he has been the project manager for many rural Alaska energy projects
that include bulk fuel facilities, power plants, and small hydroelectric & wind projects. Recently,
he managed the studies, licensing, and construction of the West Fork Upper Battle Creek
Diversion Project ($47m) to increase the energy output of Bradley Lake by 37,000 MWh a year.
Mr. Carey received a Bachelor of Science degree in engineering from the University of Alaska
Fairbanks and a Master of Business Administration from University of Alaska Anchorage.
Seward Electric System
Rob Montgomery, General Manager, Seward Electric System
Rob Montgomery is the General Manager of Seward Electric System, a municipal electric
organization serving 3,000 meters in the City of Seward and surrounding communities. In this
role, he is responsible for the overall operations of the city’s electric utility. Montgomery has
over 20 years of professional experience in the electric utility industry, including 15 years with
South Carolina Electric & Gas Company (SCE&G) and six years with Tennessee Valley Authority
(TVA). At SCE&G, Montgomery was responsible for all strategic communications and media
relations. In this position, he directed efforts to create a pipeline safety communications plan to
meet compliance requirements of the 2002 Pipeline Safety Improvement Act; led public
outreach related to the construction of a $275-million, federally mandated back-up dam on
Lake Murray in Columbia, S.C.; and managed communications and conducted public workshops
when communities were impacted by new federal laws for clearing and maintaining rights of
way near high-voltage transmission lines. At TVA, Montgomery was responsible for strategic
communications and served as a primary liaison with the Tennessee Valley Public Power
Association. Montgomery is a graduate of the University of South Carolina with a degree in
Journalism and holds a certificate from Duke University’s Executive Leadership Program.
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
BESS Cordinated Response
19
Golden Valley Electric Association (GVEA)
GVEA is a generation, transmission, and distribution cooperative that has built hundreds of
miles of transmission lines. GVEA has built a fleet of modern transmission substations in ring
bus or breaker-and-half bus configurations, with modern digital protection and control systems.
GVEA has in-house design and construction expertise required to complete these projects but is
also supported by local and nation-wide engineering firms, construction contractors, and
equipment supplies. Additionally, our team is competent and experienced in the areas of
procurement, contracting, public relations, regulatory and legislative affairs, and
finance/accounting to support these efforts.
Dan Bishop, Director of Engineering Services, GVEA
Dan Bishop has been responsible for the design and construction of electric transmission lines
and substations throughout Alaska. His skills include drafting, structural design, electrical
design, project management, quality control during construction, leading teams of engineers
and technicians, planning studies, budgeting, and executive management. He received his
Bachelor of Science and Master of Science degrees and in Electrical Engineering from the
University of Alaska Fairbanks and has been a registered professional engineer since 1993. He
has been with GVEA since 1997.
Daniel Heckman, Regulatory Manager, GVEA
Daniel Heckman serves as the primary liaison between GVEA and federal and state regulatory
agencies, primarily the Regulatory Commission of Alaska (RCA), as well as regulatory
stakeholders statewide. In addition to his regulatory and compliance oversight responsibilities,
he serves as GVEA’s primary representative on the Railbelt Reliability Council and as GVEA’s
representative on the BPMC project team described in this application. He received his
Bachelors in Political Science and in History from Southern Methodist University in 2010 and his
juris doctor from the Gonzaga University School of Law in 2013. Combined with his prior
experience at an investor-owned utility, Daniel has 10 years of experience in regulatory affairs.
Chugach Electric Association, Inc. (Chugach)
Bruce Aspray, Manager of Transmission & Substation Engineering & Planning, Chugach
Bruce Aspray is a professional with experience in the industrial power and electrical utility
industries. Mr. Aspray has specified, built, commissioned, and operated a combined cycle
power plant as well as open air and GIS substations. Mr. Aspray is a degreed and licensed
Professional electrical engineer in the State of Alaska. He is experienced in project management
and construction of utility grade facilities including generation, transmission, substations,
distribution, and renewables.
Andrew Laughlin, Chief Operating Officer, Chugach
Andrew Laughlin is a professional with a diverse background in the power industry, specifically,
power delivery project development, design, procurement, project management and
construction. He is a licensed Professional electrical engineer with experience that includes
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
BESS Cordinated Response
20
construction of transmission and substation infrastructure as well as upgrading Static VAR
Compensation, boiler controls and steam turbine generation systems. Mr. Laughlin has
developed project teams for large and small complicated projects.
Dustin Highers, Vice President Corporate Programs, Chugach
Dustin Highers is an electric utility professional with a background in power plant operations,
maintenance, construction, commissioning, and engineering support. Mr. Highers’ industry
experience includes 30 years in various industries including maritime, oil and gas, power plant
construction and commissioning, gas turbine field engineering, and electric utility engineering
and management. He is the leader of small and large teams in the execution of enterprise level
projects to achieve corporate goals and objectives. Mr. Highers has demonstrated skill in
complex program and project management for power generator maintenance and large
generation construction projects.
Matanuska Electric Association (MEA)
MEA is a generation, transmission, and distribution cooperative that in serving the needs of its
members designs, permits, builds and maintains distribution and transmission lines, as well as
transmission level and distribution level power substations. Projects may be standalone efforts
for our members or in partnership with project developers or other interconnected utilities.
MEA has in-house design, land services, and construction expertise required to complete these
projects, but is also supported by local and nation-wide engineering firms, construction
contractors, and equipment supplies. Additionally, our team is competent and experienced in
the areas of procurement, contracting, public outreach and engagement, regulatory and
legislative affairs, and finance/accounting to support these efforts.
Ed Jenkins, Chief Operations Officer, MEA
Ed Jenkin is a licensed Professional electrical engineer in the State of Alaska with more than 30
years of experience in the utility industry. He is presently the Chief Operations Officer for MEA.
In this role he has oversight of MEA’s system planning, engineering, operations, technical
services, and power system dispatch functions. Within the interconnected Alaska electric utility
system Mr. Jenkin has led or worked on multiple collaborative efforts, such as: Railbelt electric
reliability and cybersecurity standards development, joint asset management and operations,
power pool formation between Matanuska Electric and Chugach Electric, legislation on the
formation of an electric reliability organization, and regulations on net-metering, regional
planning, and standards enforcement. Mr. Jenkin graduated with a Bachelor of Science Degree
in Electrical Engineering from the University of Alaska, Fairbanks in 1984. He also has a Master
of Arts degree in cross-cultural studies, because people are important.
Julie Estey, Senior Director of External Affairs and Strategic Initiatives, MEA
Julie Estey is the Senior Director where she manages the cooperative’s public and member
facing activities along with the organization’s strategic plan and special projects. She serves as
the organization’s representative, past Chair and founding member of the Railbelt Reliability
Council, the recently certificated Electric Reliability Organization for the interconnected Railbelt
grid. Before joining MEA, Ms. Estey was the Business Director for the Alaska Center for Energy
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
BESS Cordinated Response
21
and Power, an energy research group at the University of Alaska Fairbanks focused on
improving how Alaskans generate and distribute power. She has experience managing public
outreach and engagement for controversial transmission and generation capital projects as well
as expertise bringing diverse groups of stakeholders together to develop common solutions.
Homer Electric Association, Inc. (HEA)
HEA performs generation, transmission, and distribution functions under a cooperative
structure that has built and maintains hundreds of miles of transmission lines. HEA has
constructed and maintains modern transmission substations in ring bus or breaker-and-half bus
configurations, with modern digital protection and control systems. HEA retains in-house design
and construction expertise required to complete these projects; however, can draw upon local
and nation-wide engineering firms, construction contractors, and equipment supplies. Our
team is competent and experienced in procurement, contracting, public relations, regulatory
and legislative affairs, and finance/accounting to support these efforts.
Keriann Baker, Director of Member Relations, HEA
Keriann Baker, HEA’s Director of Member Relations, oversees HEA’s customer service programs,
public relations efforts and legislative affairs. Baker practiced law with Reeves Amodio in
Anchorage and Lewis, Longman & Walker in Palm Beach County, Florida, prior to joining HEA.
She serves as vice chair of the South Peninsula Hospital, Inc., board and previously has served
on numerous boards including several local and state chambers of commerce as well as state
and national bar associations. Ms. Baker received a Bachelor of Science from Utah Valley
University, Orem, Utah, and her juris doctorate from Loyola Chicago School of Law, Chicago, IL.
Larry Jorgensen, Director of Power, Fuels, & Dispatch, HEA
Larry Jorgensen, HEA’s Director of Power, Fuels & Dispatch, manages the operation and
maintenance of HEA’s generation facilities, and generation dispatch. His skills include project
design and management, advanced control systems, simulation and modeling, plant
commissioning and startup, personnel training and advancement, and standards
development. Mr. Jorgensen received an Associate in Applied Science in Power Plant
Technology and Bachelor of Science in Energy Management both from Bismarck State College,
Bismarck, North Dakota. He has been with HEA since 2011.
Independent Contractors
Rena Miller, Independent Contractor
Rena Miller is an independent contractor supporting the project team with the Community
Benefit Plan. She most recently managed the Railbelt electric utilities' application to State
regulators to serve as electric reliability organization. Rena worked more than 10 years for the
Alaska State Legislature, serving as Chief of Staff to the Senate President and as the Senate
Majority's oil and gas policy advisor. Her time with the Legislature included policy development
and advancement on electric and other energy issues, and experience in stakeholder outreach,
consensus building and compromise.
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Concept Paper
Railbelt Innovation Resiliency Project (RIR)
Topic Area 3: Grid Innovation
Applicant: The Alaska Energy Authority (AEA) representing the State of Alaska
Technical Point of Contact: Bryan Carey, Director of Owned Assets, AEA
Business Point of Contact: Curtis Thayer, Executive Director, AEA
The AEA and Railbelt electric utilities are partners in this project as collaborative decision
makers representing all the primary transmission owners and operators of Alaska’s largest
electrical grid (the Railbelt). The project team consists of:
1. AEA
2. Chugach Electric Association Inc. (CEA), a Central Region cooperative
3. Golden Valley Electric Association Inc. (GVEA), a Northern Region cooperative
4. Homer Electric Association Inc. (HEA), a Southern Region cooperative
5. Matanuska Electric Association Inc. (MEA), a Central Region cooperative (MEA)
6. The City of Seward, Alaska dba Seward Electric System (SES), a Southern Region municipal
utility
7. The Regulatory Commission of Alaska (RCA) is participating as a team member in an
advisory and regulatory role, as permitted by their statutory authority
Project Location: All three regions (Northern, Central, and Southern) of the Alaska Railbelt
electrical grid and the Eastern Region1.
1 Copper Valley Electric Association (CVEA) serves the Eastern Region and is a stakeholder knowledgeable about
this application but is not a project team member.
Area served by
the Railbelt grid
Area served by
Copper Valley
Electric
Association
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Railbelt Innovation and Resiliency
1
Project and Technical Description
Alaska and the nation are at a crossroads of the need to develop a fuel-diverse, low-carbon
economy, and a once-in-a-generation opportunity to invest in infrastructure. At this
intersection, the collective mission of the Railbelt utilities and the State of Alaska is to build a
resilient, clean, smart, and low-cost electrical grid. This grid must support a fuel-diverse energy
landscape that drives sustainable economic development in Alaska and ensures the cost-
effective delivery of energy to Railbelt consumers and beyond. The Railbelt utilities and State
share a vision: a collaborative future in the Railbelt in which our communities come together
and share resources to strengthen and build a smart, clean electrical grid that promises our
residents, our national defense infrastructure, and communities adjacent to the Railbelt access
to clean, low-cost energy from any source.
The Railbelt Innovation Resiliency project (RIR or Project), the subject of this GRIP Topic 3
Concept Paper, is one of a series of projects that constitute the Railbelt’s Grid Modernization
and Resiliency Plan (GMRP or Plan)2. The RIR effort proposed in this Topic 3 funding cycle will
construct an interregional transmission line (including a high voltage direct current (HVDC)
submarine cable) parallel to the single line that currently ties the Southern and Central regions
together. The project includes two Battery Energy Storage Systems (BESS), one each in the
Central and Northern regions, to augment the existing 46 MW, 2-hour battery in the Southern
Region. The HVDC line and batteries will be operated and controlled simultaneously in real time
to maximize transfer capability between regions and minimize spinning reserve requirements,
improving resiliency and allowing the transfer of renewable energy. Discussion on how this
project fulfills the GRIP FOA eligibility requirements begins on page 10 of this document.
The team assembled for this project includes stakeholder outreach experts, engineers, project
managers, and the executive-level decision makers for the Railbelt utilities and AEA. The team
will work diligently to integrate other regional stakeholders into the process, as described in the
Community Benefits Plan section. The project team intends to apply in subsequent cycles for
funding to complete the transmission line between the Southern and Northern regions by
extending the transmission line in this funding request from the Central Region to Healy in the
Northern Region. In the final funding cycle, the project team will submit the completion of RIR
Phase 2, constructing a transmission line integrating the Copper Valley in the Eastern Region
into the Railbelt grid and providing an alternate path to feed the Ground-based Midcourse
Defense (GMD) system and Black Rapids Arctic Warfare Training Center at Fort Greely in the
Northern Region.
2 The GMRP consists of interregional transmission interconnection improvements and a coordinated energy
storage/HVDC system: More specifically these are: 1) upgrades to the Railbelt Backbone, the Railbelt’s existing
transmission system (the Railbelt Backbone Rebuild) 2) a second interregional tie between the Southern, Central,
and Northern regions, 3) battery energy storage systems (BESS) in each region operating in real-time coordination
with an HVDC system to maximize transfer capability and minimize spinning reserve requirements, and 4) an
interregional tie between the Central and Northern regions integrating the Copper River Valley (currently a stand-
alone system) into the Railbelt grid and providing a second feed into the U.S. Department of Defense GMD system
at Fort Greely.
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Railbelt Innovation and Resiliency
2
Fort Greely is currently served by a single radial transmission line from Fairbanks. These
subsequent projects would complete the full GMRP.
Grip Topic 3 is coordinated with but distinct from the project team’s requests in GRIP Topics 1
and 2. In GRIP Topic 1 the team is seeking federal assistance for the reconstruction of the
antiquated and end of useful life transmission assets that comprise the existing transmission
system backbone. In GRIP Topic 2, the Railbelt utilities and AEA are seeking federal assistance
for design and procurement of the interregional battery-HVDC control and monitoring system,
which would provide simultaneous interregional control. In Grip Topic 3, this concept paper,
the project team is seeking assistance in constructing the actual HVDC line and BESSs. Although
the GMRP in total provides the greatest benefit to Alaska and the strongest opportunity to
advance federal policy interests, each of its components provide value in their own right. The
team will seek funding to complete the entire GMRP; however, as noted below, without
significant federal and state assistance the GMRP will take many decades to complete.
Through the GMRP, there exists an opportunity for a transformational series of transmission
infrastructure improvements estimated to cost ~$2.87 B. Successful and accelerated
implementation of the GMRP will prepare the Railbelt grid in terms of resiliency and reliability
necessary for the development of a more fuel diverse low carbon future in Alaska that can
serve as a model for the rest of the United States and the world. Given the nature of the
Railbelt and the disparate socioeconomic status and vast diversity of its communities as
described below, learnings from this undertaking will be broadly applicable to the larger grids of
the contiguous lower forty-eight states and North America.
As described in this concept paper, the Railbelt grid is an isolated3, long-distance, fully
functioning electric grid built on a relatively small scale that serves nearly three quarters of
Alaska’s population. Yet, the grid’s aging infrastructure is inadequate by traditional industry
standards. For example, although Alaska is not regulated by the North American Electric
Reliability Corporation (NERC), NERC standards would require the construction of the GMRP
projects to meet its reliability and resiliency standards. The GRIP provides an opportunity to
successfully modernize the Railbelt grid to support the state’s isolated population core and to
facilitate decarbonization of the broader Alaska economy. The AEA and the Railbelt utilities are
investigating large-scale, known-resource wind projects in the Northern Region near Fairbanks;
in the Central Region on the east and west sides of Cook Inlet; and in the Southern Region north
of Kachemak Bay and the upper Gulf of Alaska near the mouth of Cook Inlet. Additionally, AEA
and the Railbelt utilities are investigating hydroelectric resources in the Southern Region, solar
farms in the Central and Southern regions, and potential hydroelectric resources in the Eastern
Region. The economics of integrating any of these projects into the Railbelt grid will require the
participation of all five Railbelt electric utilities, the State, and in the case of the Eastern Region,
CVEA, a stand-alone, islanded electric utility.
For these utilities to participate in any of these renewable or low carbon energy projects, firm
transmission access to generation resources must be assured. Firm transmission access will
3 The Railbelt is a stand-alone grid not interconnected with any other electric system.
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
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Railbelt Innovation and Resiliency
3
require completion of the GMRP. Thus, GMRP completion is the key to decarbonizing the
Railbelt grid. Due to the population diversity within the Railbelt and scale of the infrastructure,
the federal government has an opportunity to utilize the Railbelt grid as a model to
demonstrate both the objectives and vision of the bipartisan Infrastructure Investment and Jobs
Act (IIJA) and other initiatives. The lessons learned from this demonstration will have broad
applicability to the larger grids of the contiguous lower forty-eight states. The project team
looks forward to collaborating with the national labs to ensure such learnings are transferred to
national stakeholders.
As discussed more fully in the Community Benefits Plan section, the Railbelt region is home to
numerous federally recognized tribes and disadvantaged and underserved communities. There
are over 200 federally recognized tribes in Alaska, many in the Railbelt region, and based on the
2010 census Anchorage is home to the three most culturally diverse census tracts in the U.S.
(followed closely by Queens, New York)4. One hundred and ten languages are spoken in the
Anchorage School District alone.5 With this socially and economically diverse makeup, the
Railbelt is the ideal area for the federal government to demonstrate how the benefits of the IIJA
can be maximized.
The Railbelt serves five military
bases, as depicted in Figure 1,
each with a vital strategic
importance to U.S. national
security. These critical bases
contribute to the national defense
through airborne infantry, military
intelligence, mid-course missile
defense, global
telecommunications downlink
infrastructure, Long Range
Discrimination Radar (LRDR), F-16,
F-22, and F-35 high-speed
intercept capability, and Coast
Guard, among other ways. As noted in the White House’s Indo-Pacific Strategy (February 2022),
these defense capabilities are vital to our national security and prosperity. The GMRP will
support the transition of Alaska-based U.S. Department of Defense assets to a low-carbon
future and improve resiliency by building a redundant transmission line to serve the GMD
system near Ft. Greely.
The Railbelt is essential to the broader state economy. The Port of Alaska, a federally
designated Strategic Seaport in Anchorage, serves as the primary point of entry for virtually all
cargo, building material, fuel, and food for most of the state’s population. Additionally, the Ted
4 https://www.cnn.com/2015/06/12/us/most-diverse-place-in-america/index.html
5 https://www.asdk12.org/aboutasd/
Railbelt Military Bases
Figure 1: Military Bases Served by the Railbelt Grid
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Railbelt Innovation and Resiliency
4
Stevens Anchorage International Airport is the fourth largest international airport in the world
in terms of cargo throughput (approximately 50% of the air cargo between North America and
Asia), making its decarbonization of global importance. Alaska is home to significant mining
operations including for rare earth metals critical to national security and other strategic
imperatives. These assets are vital to the economy and security of both Alaska and the nation.
The RIR will deliver broad and substantial benefits to the Railbelt and the state. Those benefits
include improved regional and interregional reliability, resiliency and transfer capacity,
increased ability to integrate renewable and other low carbon energy projects, reduction in
carbon emissions and transmission system losses, increasing geographic and technological
diversity of the Railbelt grid generation portfolio, facilitation of decarbonized beneficial
electrification, and the eventual decarbonization of the electric grid.
More significantly, over time this project and the broader GMRP will help stabilize electric rates
throughout the state. Alaskans pay some of the highest electric rates in the country6, which
disproportionately impact the disadvantaged and underserved. Stabilizing Railbelt rates will in
turn help address the even higher cost of energy in rural Alaska not served by the Railbelt, with
close to 30% of the state’s population. The state’s innovative, equity-sharing Power Cost
Equalization (PCE) program7 mitigates rural costs using a formula based in part on the price of
Railbelt electricity. This program spreads benefits realized by investment in the Railbelt to
virtually every village in Alaska, most of which are Disadvantaged Communities. The GRIP
program objectives are met and complimented by the State’s and utilities’ goal of a resilient,
clean, and low-cost electrical network that supports sustainable economic development in the
region, decarbonization, and cost-effective energy delivery.
All the Railbelt electric utilities are either electric cooperatives or, in the case of the City of
Seward Electric System (SES), municipally owned8. Thus, virtually all benefits from this grid
modernization effort flow directly to the member-owners, the residents, businesses, and
communities of the Railbelt, and indirectly to the rest of the State through PCE. The Railbelt is
effectively a proving ground where the Department of Energy (DOE) and other federal agencies
can evaluate and successfully demonstrate transmission resiliency improvements in
preparation for electric decarbonization, both technically and on a community basis. Notably,
this can be achieved at a relatively low cost in the Railbelt grid. The RIR project will have the full
support and cooperation of the State and utility project team. This team consists of
representatives of the State of Alaska and each of the five Railbelt electric utilities9, and of the
6 Energy Information Administration (EIA) form EIA-826.
7 The Community Benefits Plan section beginning on Page 13 provides additional discussion on Power Cost
Equalization.
8 The City of Seward, a municipal, public power utility at ~1% of total Railbelt electricity demand.
9 The five Railbelt Electric Utilities consist of Golden Valley Electric Association Inc. in the Northern Region,
Matanuska Electric Association Inc., and Chugach Electric Association Inc. in the Central Region, and Seward
Electric System and Homer Electric System Inc. in the Southern Region.
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Railbelt Innovation and Resiliency
5
RCA, the state’s utility regulator10. The team members are committed to the GMRP, subject to
governance board approvals and vetting through the National Environmental Policy Act (NEPA)
process.
The State and the Railbelt utilities are committed to upgrading the regional and interregional
transmission system. On December 2, 2022, AEA closed on a bond package for $166M, 65% of
which will be dedicated to transmission line reconstruction and 35% to the three regional grid
stabilization BESSs. The Railbelt utilities will pay the debt service on this bond package. In later
funding cycles, other segments of the RIR will be constructed as study work is completed and
regional and interregional approval is obtained. State funding assistance11 to help close the gap
between utility funding and federal assistance is being pursued.
The team plans to apply for all applicable IIJA and Inflation Reduction Act (IRA) federal
assistance for GMRP projects. In addition, the team is seeking State appropriations to augment
federal funds. The GMRP upgraded grid will create an unrestricted electron freeway and allow
the Railbelt to optimize the use of cost-effective, low-carbon technologies by eliminating
current technical and geographic constraints of the transmission system.
Background
The Railbelt Grid
The Railbelt electric grid is unique in North America as it is a fully functioning, long-distance
electrical grid with a
relatively small load. The
Railbelt is characterized
by three load-generation
regions. These load-
generation
concentrations are
known as the Northern
Region (Fairbanks-Delta
Junction), the Central
Region (Anchorage-
Matanuska-Susitna
Valleys, and Southern
Region (the Kenai
Peninsula). The Southern
and Central regions are
joined by a single, 140 mile long 115 kV transmission line through many avalanche areas. The
Central and Northern regions are connected by a 169-mile, 138 kV line through mountainous
10 On January 4, 2023, the RCA unanimously passed the following motion “I [Commissioner Pickett] will make a motion
that the RCA be considered as a [Alaska Railbelt GRIP] team member subject to any legal restrictions we may have and to consider
probably in the format of an I docket, uncommon or innovative regulatory structures [to incentivize transmission investment].”
11The October 26,2022 letter from Railbelt utility managers to Governor Michael Dunleavy is available for review.
Railbelt Grid
Figure 2: Alaska’s Relative Size
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terrain accessible only by helicopter. The grid provides electricity to approximately 70% of the
state's population and generates 80% of the electricity in Alaska. It extends over 700 miles from
the Bradley Lake Project, located at the head of Kachemak Bay near Homer, Alaska, in the
Southern Region, to Delta Junction in the Northern Region, roughly the distance from
Washington, DC, to Atlanta, Georgia, as depicted in Figure 2. The grid traverses inhospitable,
mountainous, subarctic terrain. The region is laced with highly active seismic zones and is
subject to volcanic eruptions, forest fires, flooding, and fierce annual winter storms. The grid's
assets vary from high voltage (138 kV and 230 kV) submarine cable crossings in Cook Inlet12 to
remote helicopter/riverboat -access-only river crossings and numerous transmission structures
at high elevations in this subarctic environment.
Unlike numerous areas in the contiguous lower forty-eight states, the Railbelt has received
minimal federal investment in grid development over Alaska’s history. The Eklutna
Hydroelectric Project, initially constructed in the 1950s, was the last major federal project in
the Railbelt that included a transmission line component. A portion of this project was rebuilt
by the Bureau of Reclamation's Alaska Power Administration after the 1964 Good Friday
Earthquake and sold by the federal government to the Railbelt’s Central Region utilities in the
early 1990s.
The Railbelt’s Northern Region is loosely interconnected, primarily at 69 kV and 138 kV. The
Central Region is moderately well interconnected with multiple 230, 138, and 115 kV lines. The
Southern Region is interconnected at 115 kV but includes a radial feed to the SES system. A
tight power pool operates in the Central Region and an active economy energy market exists
between regions but is severely limited by transmission constraints and a lack of transmission
lines. A generation contingency reserve-sharing pool exists between all three regions. Because
the transmission interconnections are vulnerable to single contingencies, each region is
responsible for its own operating and off-line reserves. Due to the relatively feeble regional
interconnections, the Railbelt grid is technically characterized as "transient stability limited,"
with machines under dynamic stress swinging against other machines within the region, and
with regions swinging against each other across the light interregional interconnections. The
grid is susceptible to transient stability and large-scale, small-signal instability oscillations.
Voltage stability, which varies from marginal to good depending on the specific area, has been
improved with the addition of six static volt-amps-reactive (VAR) compensators at critical
locations. The grid operates under a subset of NERC standards modified to account for the
scale, nature, and economic limitations of the interconnection (the grid's system bias is variable
and ranges from 3-10 MW/.1 hertz). In 2024 these standards will become mandatory and
enforceable under a recently certificated electric reliability organization, the Railbelt Reliability
Council. The grid has a sophisticated under-frequency load shed scheme which sheds load to
match generation in four stages with varying time delays and includes frequency rate of change
relays. Traditional day-ahead and real-time security constrained economic dispatch are run in
12 Cook Inlet is a silt laden 180-mile inlet reaching from Knik Arm to the Gulf of Alaska. The inlet has the fourth
highest tidal range in the world at 30.3 feet and contains an endangered subspecies of the beluga whale.
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each Load Balancing Area (LBA) with net interchange, and frequency monitored and managed
to Alaska Standard AK BAL-001 which incorporates NERC CPS 1 and 2. Dynamic events on the
grid occur and resolve very quickly (2-10 seconds) when compared with the much larger North
American grids (the Eastern Interconnection, the Western Interconnection, and ERCOT), which
resolve in tens of minutes. The grid's peak demand is roughly 750 MW compared to ERCOT's 13
peak demand of 85,000 MW. The grid's annual energy consumption is approximately 4,800
GWH compared to ERCOT’s at 339,000 GWH.
The Railbelt Grid Modernization and Resiliency Plan
Today, the broader energy landscape in Alaska and across the world is being reshaped by
multiple change drivers. Geopolitical shifts are dramatically altering global energy markets.
Decarbonization policies and technological
advancements shaped by increasingly
dramatic climate change are both the result
of and contributing to a shift in popular
sentiment about energy and the
environment. Regionally, uncertainty
around declining Cook Inlet natural gas 14
and broader fuel supply issues for the
utilities is a critical – and shared – challenge
looming on the near-term horizon.
In response to this shared challenge, the
State and Railbelt utilities have come
together to develop a broad-based, long-
term plan to ensure the future energy
viability of the Railbelt from a social,
economic, and technical perspective. The
technical aspect of that plan is the GMRP, of
which the RIR (the focus of this funding
request) is a component. We intend to
submit the GMRP as the Railbelt’s
contribution to Alaska’s broader State
Energy Security Plan as that document is
developed in the coming months.
Figure 3 is a graphic representation of the current Railbelt grid with the GMRP components
overlaid. The GMRP components that comprise the RIR 2022-23 funding cycle project costs are
highlighted in yellow. A more detailed geographic GMRP map with component projects and
estimated costs is available upon request.
13 ERCOT is by far the smallest of the North American interconnections.
14 Natural gas is used to generate 80% of the electricity in the Railbelt and is also the primary source of energy for
home heating in the Central and Southern regions.
Figure 3: RIR Components in Current Funding Cycle
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In the 2022-23 GRIP Topic 3 funding cycle, the State and utilities are requesting $298,600,000,
representing 50% of the 2022-23 RIR project costs. The same team will seek federal assistance
for the remaining project costs in subsequent Topic 3 funding cycles.
Figure 4 is a graphic representation of the
Railbelt system with an overlay of the GMRP.
The
entire RIR project (topic of this concept
paper) is highlighted in yellow. The Railbelt
Backbone Reconstruction is highlighted in
red, and the BESS-HVDC control project (at
locations highlighted with the blue “C”)
comprise the remainder of the GMRP15.
The estimated total cost for the GMRP is
$2.87B over 15 years. Given the Railbelt’s
small population, without significant federal
and state investment the GMRP and its RIR
component would take many decades to
finance and construct. The costs are too high
for the limited number of Railbelt customers
to absorb. This delay will in turn hinder the
Railbelt’s ability to decarbonize both the grid
and the broader economy. The project team
intends to apply for federal funding for
specific GMRP components in each of the
five funding periods of the GRIP and IRA, and
also USDA Rural Utility Services (RUS) loan
programs. In addition to these federal
requests, the team is seeking state funding with the remainder of plan costs to be funded by
Railbelt utilities. The utilities have requested, and the RCA has agreed, to evaluate innovative
ratemaking strategies to promote the completion of the GMRP, e.g., accelerated application of
costs to rate base or forward funding of project costs, among others.16
15 Subjects of the project team’s Topics 1 and 2 concept papers.
16 The RCA is the statutorily authorized regulator of the Railbelt electric utilities. The RCA discussion to evaluate
innovative ratemaking strategies can be found in the minutes of the RCA’s January 4, 2023, special public meeting
at
https://rca.alaska.gov/RCAWeb/MeetingDetails/CommissionMeetingDetails.aspx?id=f44c5897-045b-4d7c-a59b-
d650bdb52a2e
Railbelt Innovation and Resiliency Project Cost 2022-2023 2024-27
Southern Region to Central Region HVDC Cable and Regional Battery Energy Storage $597,100,000 $870,400,000
Figure 4: RIR, RBR and BESS-HVDC Projects Comprising
the Railbelt Grid Modernization and Resiliency Plan
(GMRP)
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The priority improvements required to allow diversification of the Railbelt fuel supply and
decarbonization of the Railbelt grid must be providing frequency stability and decongesting the
transmission system. These improvements are required irrespective of the nature of fuel supply
diversity and decarbonization solutions. In 2010, the Railbelt's frequency was equal to 60 Hz.
approximately 44 % of the time. By 2021, the grid operated at 60 Hz about 17% of the time. The
primary causes of this deterioration of frequency control are the introduction of lighter, more
efficient aero-derivative turbines, efficiency-driven (as opposed to response-driven) plant
control systems, and the introduction of non-dispatchable renewables in the form of solar and
wind generators. Stabilizing frequency and decongesting the grid will require upgrading existing
transmission lines and building a new transmission interconnection from the Southern Region
to the Central Region and on to Healy in the Northern Region, and development of a regional
BESS-HVDC real-time control and optimization scheme. These steps are the core of the GMRP.
A subsequent phase will include a transmission interconnection from Wasilla in the Central
Region to Glenallen in the Eastern Region, and north to interconnect with the GVEA system at
Fort Greely and the GMD System in the Northern Region.
The following table estimates the high-level GMRP timeline and associated estimated costs. The
priority and timing of projects may vary given the outcome of funding opportunities17, NEPA
processes, the evolving nature of low carbon generation development, and Cook Inlet fuel
supply changes.
The Railbelt Innovation Resiliency Project
The subject of this concept paper is the RIR, which is:
• Construction of transmission lines and an HVDC submarine cable paralleling the existing
single transmission line between the Southern and Central regions
• Construction of two large-scale BESSs, one in the Northern Region and one in the
Central Region, which will augment the existing 46 MW, 2-hour battery in the Southern
Region
These three batteries and the HVDC line will be operated in a coordinated, simultaneous
fashion, in real-time, to maximize transfer capability and minimize spinning reserve
requirements.
The need for constructing a resilient transmission grid with multiple interregional
interconnections was established in studies beginning with the development of the Bradley
Lake Project in the late 1980s and confirmed as recently as 2017 in AEA’s Railbelt Regional
17 Full funding of requests in GRIP Topics 1, 2, and 3 may accelerate the 2023-2027 effort, pushing it above the
estimated $934,000,000.
Grid Modernization and Resiliency Plan (GMRP)
Decarbonization and Fuel Diversity Transmission Build-Out 2023-2027 2028-2032 2035-2037
Southern Region (Kenai Peninsula) to Central Region (Anchorage Mat-Su) + Energy Storage $934,000,000
Central Region to Northern Region (Fairbanks-Delta Junction) Phase 1 $981,000,000
Central Region to Northern Region Phase 2 and Roadbelt (Wasilla-Glenallen-Delta Junction)$958,000,000
Total Fifteen Year Transmission Spend $2,873,000,000
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Integrated Resource Transmission Plan. The RIR components addressed in this concept paper
have historically received broad support within the Railbelt. This support will aid in moving the
projects more quickly to design, permitting and construction.
Project Eligibility and Area of Interest
The RIR project meets the DOE’s objectives as expressed in the Topic 3, Area of Interest 1:
Transmission System Applications18, as detailed below:
1. Investments and strategies that accelerate interconnection of clean energy generation
and/or storage: Railbelt grid frequency stabilization and transmission system decongestion
will allow development of large-scale interregional wind and solar projects by improving
their economic and technical viability. With a reinforced transmission system, the
geographical diversity of wind and solar will contribute to reduced storage requirements.
The more robust transmission system will also allow interregional planning and dispatching
stored resources, which will reduce storage resources required in individual regions. These
improvements will also enable beneficial electrification on a large-scale, e.g., electric
vehicles and space heating.
2. Interregional or cross-ISO/RTO projects that address key grid reliability, flexibility, and/or
resilience challenges: The three Railbelt regions (Southern, Central, and Northern) are
joined by single transient stability limited interconnections. The RIR project will remove
single contingency constraints and increase interregional transfer capacity.
3. Projects addressing grid access challenges for remote, stranded, or novel low-carbon
resources: The improved interregional grid (in terms of resilience and improved transfer
capability) will increase the economic viability of and thus increase utility participation in
geographically diverse wind and solar projects by enabling greater scale and driving per-
unit costs down. From a technical perspective, stabilizing grid frequency and maximizing or
eliminating transient stability limits and small-signal instability susceptibility will allow a
larger scale integration of non-dispatchable renewables. Railbelt-wide coordination of
BESS/HVDC resources will increase the amount of renewables sustainable in the Railbelt
without increasing the amount of BESS resources.
4. Planning, modeling, cost allocation, or other approaches that enable a transition to
innovative financial and/or regulatory constructs that accelerate transmission expansion:
RCA participation in the RIR and broader GMRP efforts will likely create an innovative
regulatory framework that allows the utilities to maximize their financial participation in
this project and others, e.g., early inclusion of transmission construction costs in rates or
forward funding of portions of these costs, thereby minimizing carrying costs.
5. Underground or underwater HVDC systems in challenging environments: The Nikiski to
Beluga HVDC submarine cable will cross Cook Inlet, a challenging marine environment.
18 Funding Opportunity Announcement (FOA) Number: DE-FOA-0002740 pp 31-32
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Cook Inlet is laden with glacial silt corrosive to armored cables19; has some of the highest
tides in the world, peaking at 30 feet; is home to an endangered subspecies of beluga
whale; and hosts numerous subsea petroleum and natural gas pipelines.
6. Capacity enhancing approaches such as advanced conductors, dynamic line rating systems:
The geographically disparate combined BESS-HVDC system will be controlled in a real-time,
coordinated fashion that provides real-time, dynamic maximization of transfer capability
and minimization of spinning reserves.
7. Congestion management techniques including energy storage and integrated controls: See
6 above.
8. Transmission-scale reactive power devices: The BESSs are four-quadrant devices providing
both real and reactive support, controlled and tuned to operate in dynamic synchronism
with the six existing static VAR compensators.
9. Power flow controllers for AC or High voltage Direct Current (HVDC) systems: See 6 above.
Project Grid Benefits
The RIR project will simultaneously increase transfer capability and resiliency between the
three Railbelt regions. Currently, transfers are vulnerable to interruption due to the lack of
resiliency and reliability that will be resolved via the RIR by second ties between the regions.
Increased transfer capability reduces security constrained economic dispatch (SCED)
constraints, resulting in more efficient generation dispatch. More efficient SCED will reduce
overall fuel burn and reduce carbon emissions, saving money and advancing climate goals.
Further, firm transmission capability and increased transfer capability will allow geographically
diverse utilities to participate economically in renewables, by increasing economies of scale and
reducing per-unit costs of renewables. Energy resiliency will be greatly improved by allowing
energy sources in all three regions to participate in electricity restoration as opposed to limiting
resiliency measures to three individual areas.
Ultimately the RIR project, as a component of the larger GMRP, will improve resiliency,
reliability, and efficiency, and facilitate the integration of additional renewables and variable
generation whether in the Southern, Central, or Northern regions. Improving transmission
security between the three areas will extend to all regions the benefits of geographically
diverse renewables. With completion of the RIR effort contemplated under this funding cycle,
the benefits noted above will extend in full to the Southern Region and in part to the Central
Region. Completion of the broader GMRP (which requires the RIR as an initial component) will
accrue the full value of these benefits to the entire Railbelt and Copper Valley.
19 An evaluation by CEA in the mid-1990s showed that of ten 138 kV AC oil-filled undersea cables installed between
1970 and 1990, the average cable life was approximately 15 years versus an industry expectation of 50 years.
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Project Risk Reduction
DOE investment in the RIR will provide valuable insights for contiguous lower forty-eight states’
grid planners and developers specifically with respect to long-distance, coordinated, real-time
control of BESS and HVDC systems from real and reactive power perspectives. Applications of
this technology will be particularly useful in isolated pockets of the larger contiguous lower
forty-eight states where transient or small-signal instability present a challenge. There are
several know project risks which we will address proactively; for example, the beluga whale
endangered species challenge will be mitigated by early engagement with stakeholders,
appropriate whale watch protocols, and bubble acoustic sound deadening construction
techniques. Early bathymetry development and engagement with pipeline owners and state
permitting will optimize circuit routing and minimize conflicts, e.g., cathodic protection. The
abrasive nature of Cook Inlet silt will be mitigated by double armoring the cable, a solution that
has proven effective on the most recently installed 138 kV submarine cable.
Project DOE Funding to Leverage Outcomes
DOE investment in the RIR will unlock state20 and local electric utility funding for this project
and subsequent GMRP components. AEA and the utilities also look forward to collaborating
with the national labs to integrate opportunities for additional innovation in the Railbelt effort.
By advancing the GMRP’s cumulative broader impact, this RIR investment will transform the
Railbelt transmission grid. This transformation will provide adequate transmission capability for
broad regional participation in renewable and low-carbon generation projects. Broad
participation will drive economies of scale and improve the cost profile of such projects,
effectively easing the rate burden of the Green Premium21 that falls disproportionately on low
income and underserved communities. Thus, the RIR and GMRP will facilitate the integration of
renewable and low-carbon generation technologies from Homer to Fairbanks through an
unrestricted electron freeway.
Project Readiness, Viability, and Expected Timing
As noted above, the RIR project can be accelerated through design, permitting, and
construction stages due to the maturity of the existing study work of the proposed RIR
segments.
20 See October 26, 2022, letter from the Railbelt electric utility managers to Alaska Governor Michael Dunleavy.
21 https://breakthroughenergy.org/our-approach/the-green-premium
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Community Benefits Plan
The Railbelt Innovation Resiliency project presents a unique opportunity to increase reliability,
provide clean energy options, and reduce electricity rates for a 700-mile-long stretch of Alaska
that serves as the state’s economic backbone and is home to approximately two-thirds of the
state’s population. The same Railbelt region includes multiple disadvantaged communities
(DACs), extensive veteran, Pacific Islander, and Alaska Native populations, and some of the
most diverse neighborhoods in the nation. Importantly, the benefits of federal investment in
the Railbelt are not limited to those directly connected to the Railbelt grid. The State of Alaska’s
Power Cost Equalization (PCE) program extends the financial benefits of lower Railbelt electric
rates to positively impact hundreds of remote communities statewide; even populations not
connected to the Railbelt’s electric network benefit from reduced Railbelt rates. Most of these
remote areas are DACs with extremely high power costs; PCE reduces costs in these
communities based on a formula tied to Railbelt rates. This innovative, built-in transfer
mechanism demonstrates Alaska’s prioritization of equitable benefits sharing and provides a
time-tested means to ensure benefits from federal investment in the Railbelt extend to
compounded communities targeted by Justice40.
Having missed out on the federal government’s transformational infrastructure investments
before Alaska statehood, residents of Alaska have long borne outsized infrastructure costs
spread across relatively few homes, businesses, and industries. Alaskans have experienced a
lack of redundancy and infrastructure that would be considered unacceptable in other parts of
the U.S. Alaska residents and businesses have been underserved in comparison to the federal
investment in electrical infrastructure and energy in the contiguous lower forty-eight states.
Federal support would be a step closer to providing parity to Alaskans, including numerous
DACs, tribal entities, and rural communities.
The project team intends to identify project benefits, the anticipated recipients, and metrics to
track and measure the benefits in its Community Benefits Plan (CBP) to meet the federal
government’s four target goals (outlined below). The project team’s approach to this plan will
be stakeholder driven, involving communities and entities anticipated to become partners
through the project planning, execution, and operations stages.
CBP development will benefit from early engagement with potential partners and stakeholders
in order to define measurable project benefits, set workforce goals, and advance formal
partnerships for inclusion in the CBP. Individuals in impacted communities and local institutions
can provide invaluable insight into potential project benefits and outcomes that will inform the
project development and execution. This stakeholder participation is critical up-front to ensure
the project delivers expected benefits that reach the intended communities, while reducing
possible adverse impacts.
Defining the affected stakeholders early, establishing clear, durable communication channels,
receiving concerns, and crafting measures to address those concerns are critical to managing
project risks and ensuring desired objectives. Clear communication and collaboration during
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development of the project application and the CBP will set a foundation for implementing the
CBP during project development, construction, and operations. This engagement should be a
continuous loop through the project design and execution.
Given that the project team is made up of cooperatives, a municipal utility, and the State of
Alaska, stakeholder engagement is central to the team’s regular businesses. The project team
believes this extensive experience will provide key support in CBP development and execution.
Early engagement with stakeholders is also expected to further the ability of communities,
individuals, local governments, and tribal entities to unlock additional funding opportunities
tied to the project. To that end, the project team will develop a robust CBP around the four FOA
elements as detailed below. Across all elements, the project approach is founded on the belief
that direct, early communication and meaningful exchange with other entities and communities
will inform CBP development.
Element 1: Community and labor engagement leading to negotiated agreements
The project team members have established, long-term, and mutually valued relationships with
the organized labor community in Alaska. The Railbelt utilities have used project labor
agreements in the past for projects of this scale, e.g., construction of the Alaska Intertie. Each
of the Railbelt utilities has collective bargaining agreements with the International Brotherhood
of Electrical Workers, among other unions. The project approach to the CBP will be to engage
its labor partners early to initiate discussions toward labor agreements. The CBP would
establish a timeline and milestones for negotiations with organized labor, including discussions
on local and targeted hiring goals, card-check neutrality, and possible provisions advancing
programs to attract, train, and retain new workers.
As the project applicant, the Alaska Energy Authority works with the Railbelt utilities as partners
in several transmission organizations. The utilities and AEA have a successful record partnering
both as owner/partners in shared capital projects and in advancing state energy goals and
priorities. With state support affirmed in this way, the CBP would prioritize establishing and
formalizing relationships with tribal entities, local governments, and other State of Alaska
departments with a focus on workforce and related issues. Early engagement with these core
stakeholders will also help ensure the project is cognizant of and in support of local energy
plans and goals.
The project team members individually are accustomed to engaging with local governments
and tribal entities through permitting and regulatory processes for capital projects. The CBP for
this project would establish milestones urging earlier dialogue with local governments and
tribal entities. These conversations should begin sufficiently early to inform project
development in response to local communities’ needs and concerns and to guide iterations of
the CBP. Local governments and tribal entities are uniquely situated to help identify the most
effective actions the project can take toward partnerships that advance workforce issues;
diversity, equity, inclusion, and accessibility; and the flow of project benefits to disadvantaged
communities.
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AEA and its partner utilities have extensive experience engaging with local residents and
businesses in town halls and similar formats; AEA is a state entity with obligations to the public
interest, and the electric utilities are member-owned cooperatives (one is municipal with direct
responsibilities to the city’s residents). The CBP will articulate a plan and schedule for these
engagements to ensure individuals and businesses are aware of the project, including potential
economic and clean energy opportunities the project could enable, and to receive and
incorporate concerns and input into project development plans.
Element 2: Investing in job quality and workforce continuity
Given Alaska’s relative isolation and general need for living wage jobs, the project team
members firmly support the development of workforce training institutions. The stakeholder
engagement articulated above is expected to further inform the project team of workforce
issues and opportunities, including opportunities to partner with existing programs and
institutions to ensure a skilled and inclusive local workforce. Such opportunities would be
evaluated for incorporation into the CBP.
Alaska is not a right-to-work state. The Railbelt utilities’ employees who are covered by
bargaining unit agreements are required to join unions consistent with the terms and
conditions of the various utility bargaining unit agreements. Further, the utilities maintain strict
policies fostering safe, healthy, inclusive workplaces free of discrimination and harassment. The
utilities currently support continual development of a skilled, inclusive local workforce,
specifically the IBEW-NECA Alaska Joint Electrical Apprenticeship and Training Trust, individual
utility training programs, the University of Alaska System and other technical training programs.
This track record of investment in the Alaskan and American workforce will be reflected in the
CBP.
The project team members will also continue support of STEM and energy literacy programs
throughout the state as an investment in the future pipeline of critical energy-related jobs.
Element 3: Advancing diversity, equity, inclusion, and accessibility
The CBP will identify and evaluate potential actions to advance diversity, equity, inclusion, and
accessibility in relation to the project. Alaska offers significant opportunities to engage
underserved populations, including Alaska Native, Pacific Islander, and veteran residents.
Stakeholder consultation, including with organized labor, is expected to identify potential
workforce partnerships to encourage participation of these and similar communities in the
project.
Element 4: Contributing to the Justice40 Initiative goal that 40% of the overall benefits of
certain climate and clean energy investments flow to disadvantaged communities
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As discussed in the beginning of this section, the team believes its project presents a unique
opportunity to extend benefits to much of Alaska, including DACs. The initial approach to this
CBP element would be identifying potential partners and establishing relationships to assist in
the plan development. Potential partners may include impacted DACs; state entities such as
Department of Environmental Conservation, Department of Commerce, and Department of
Labor and Workforce Development; academic or public policy/research institutions such as the
University of Alaska, Alaska Center for Energy and Power, and the Institute for Social and
Economic Research (ISER); and tribal and non-governmental entities, many of whom have
prioritized affordable, clean energy as strategic goals.
The project team intends to work with partners, stakeholders, and project technical teams to
identify measurable, trackable benefits and determine which benefits are most meaningful to
impacted communities. Engagement with institutional partners will help define disadvantaged
communities within and proximate to the project area, and within the projected reach of the
defined outcomes. Formulation of a stakeholder engagement plan and further consultation
with DACs and other partners could help establish mechanisms to measure and track the
investments and outcomes.
The project team believes significant benefits can be realized in energy resiliency, reduction of
energy and pollution poverty, and increased clean energy opportunities throughout the region
and state, and would coordinate with partners and stakeholders to quantify these broader
benefits within the CBP. Communities in the project region currently face potentially severe
health, safety, and economic consequences resulting from grid threats such as earthquakes,
severe cold weather events, and large-scale forest fires, often in remote areas. The project is
also anticipated to increase clean energy options throughout the region, including for DACs and
other rural communities, many of which are currently powered through coal or diesel-fired
generation.
The project is expected to reduce the potential consequences posed by these risks. The CBP
should also capture the potential benefits of increased opportunities for tying new, clean-
energy projects to the grid, especially smaller-scale projects. Project benefits are anticipated to
include improvements to air quality across the project regions, especially in the Northern
Region and other locations where particulate matter (PM2.5) pollution has risen to non-
attainment levels high enough to trigger remediation efforts through the EPA and is adversely
impacting the economy and health.
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Addendum A
The Railbelt utilities and AEA have worked together for over 30 years, from constructing the
Bradley Lake Hydroelectric Project (BLHP), which was commissioned in 1992 at a cost of
approximately $350M in 1990 dollars, to the most recent addition to the BLHP of the Sterling to
Quartz 115 kV line. The BLHP added the West Fork Upper Battle Creek Diversion in 2020, a
$45M diversion structure that increased the lake’s energy capacity water by approximately 10
percent. On December 1, 2022, AEA closed on a $166M bond package which will be used to
begin the RIR project by upgrading the Sterling to Quartz section of the 115 kV Southern Region
to Central Region transmission line (the Anchorage to Kenai 115kV line). Thirty-five percent of
the bond issue will be used to fund three regional grid stabilization batteries, one of which has
been constructed by HEA and is operational.
The AEA and Railbelt utilities’ stakeholder outreach, engineering, and project management
teams have many decades of stakeholder outreach, transmission, and generation engineering,
construction, and operations experience. Many of the engineers are registered professional
engineers (PE) and several are also registered project management professionals (PMP).
Combined this group has successfully constructed and commissioned billions of dollars of grid
infrastructure, as noted in their qualifications and expertise below.
Alaska Energy Authority (AEA)
AEA’s mission is to reduce the cost of energy in Alaska. As Alaska’s lead agency for statewide
energy policy and program development, AEA collaborates with utilities, private companies,
legislators, local governments, and Alaskan energy innovators to diversify the state’s energy
portfolio. On the Railbelt, AEA owns the 120-megawatt Bradley Lake Hydroelectric Project, the
largest in Alaska. AEA recently oversaw the West Fork Upper Battle Creek Diversion
construction, which diverts glacial water from West Fork Upper Battle Creek into Bradley Lake
increasing energy by 10%. In rural Alaska, AEA constructs bulk fuel tank farms, diesel
powerhouses, and electrical distribution grids, and provides technical/community assistance to
rural Alaskans. AEA’s dedicated team of engineers, economists, project managers, loan officers,
and planners help Alaska’s cities, boroughs, utilities, tribal entities, schools, and private
businesses move energy projects forward successfully.
Curtis Thayer, Executive Director, AEA
Since 2019, Curtis W. Thayer has served as executive director of AEA, the state's energy office
and lead agency for statewide energy policy and program development. Before joining AEA,
Thayer served as president and chief executive officer of the Alaska Chamber, the largest state
trade association.
Previously, he was the commissioner for the Department of Administration and cabinet
member for Governor Sean Parnell, responsible for 1,100 public employees and an annual
budget of $350 million. As part of his public service, he served as the deputy commissioner of
the Department of Commerce, Community, and Economic Development, and worked in
Washington, D.C., with Alaska’s Congressional Delegation.
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Formerly, he was on the management team of ENSTAR Natural Gas Company and the Alaska
Gas Producers Pipeline Team. Thayer has served on boards at Alaska Housing Finance
Corporation, Alaska Gasline Development Corporation, Alaska Retirement Management Board,
Alaska Royalty Oil and Gas Development Advisory Board, and United States Chambers’
Committee of 100, and currently chairs Alaska’s Board of Marine Pilots.
A graduate of the United States Department of Energy’s National Renewable Energy Laboratory
Executive Energy Leadership Institute program, Thayer has gained a comprehensive
understanding of advanced energy technologies that has helped him guide his organizations in
making energy-related decisions. He is also an alumnus of the United States Chamber of
Commerce Foundation's Institute for Organization Management, which recognizes graduates as
leaders in their industries and organizations. Thayer earned his bachelor’s degree from the
University of Alaska Fairbanks with a major in political science and a minor in business.
Bryan Carey, Director of Owned Assets, AEA
Bryan Carey has worked more than 20 years on energy projects for AEA. During that time, he
has been the project manager for the Bradley Lake Hydroelectric Project, Bradley Lake
transmission assets, project engineer for the Susitna-Watana Hydroelectric Project, Alaska
Industrial Development Export Authority’s (AIDEA) owned Snettisham Hydroelectric Project,
and substantially participated in Railbelt Integrated Resource Planning. In addition, he has been
the project manager for many rural Alaska energy projects including bulk fuel facilities, power
plants, and small hydroelectric/wind projects. Recently, he managed the studies, licensing, and
construction of the West Fork Upper Battle Creek Diversion Project ($47m) to increase energy
output of Bradley Lake by 37,000 MWh a year. Mr. Carey received a Bachelor of Science in
engineering from the University of Alaska Fairbanks and a Master of Business Administration
from University of Alaska Anchorage. He is a registered Professional Engineer in Alaska.
Railbelt Electric Utilities
Seward Electric Systems, Golden Valley Electric Association Inc., Matanuska Electric Association
Inc., and Homer Electric Association are all vertically integrated generation, transmission, and
distribution utilities with many decades of planning, design, construction, and operation of
power systems. The Railbelt is, and has been, an early adopter of technology over may decades;
for example, virtually all protective relays in the Railbelt grid were converted to
microprocessor-based technologies by the early 1990s, and currently most critical busses in the
Railbelt have real-time synchro phaser capability. In the last decade the combined utilities have
constructed nearly $1B dollars in generation22, a 46MW two-hour battery, and many miles of
transmission. The utility members of the project team are highly qualified in the execution of
projects proposed under the Grid Resiliency and Innovation Partnership funding opportunity.
Seward Electric System
22 Conversion to the new generation portfolio reduced carbon emissions by nearly 30% over the last decade.
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Rob Montgomery, General Manager, Seward Electric System
Rob Montgomery is the General Manager of Seward Electric System, a municipal electric
organization serving 3,000 meters in the City of Seward and surrounding communities. In this
role, he is responsible for overall operations of the city’s electric utility. Mr. Montgomery has
over 20 years of professional experience in the electric utility industry, including 15 years with
South Carolina Electric & Gas Company (SCE&G) and six years with Tennessee Valley Authority
(TVA). At SCE&G, Mr. Montgomery was responsible for all strategic communications and media
relations. In this position, he directed efforts to create a pipeline safety communications plan to
meet compliance requirements of the 2002 Pipeline Safety Improvement Act; led public
outreach related to the construction of a $275-million, federally mandated back-up dam on
Lake Murray in Columbia, S.C.; and managed communications and conducted public workshops
when communities were impacted by new federal laws for clearing and maintaining rights of
way near high-voltage transmission lines. At TVA, he was responsible for strategic
communications and served as a primary liaison with the Tennessee Valley Public Power
Association. Mr. Montgomery is a graduate of the University of South Carolina with a degree in
journalism and holds a certificate from Duke University’s Executive Leadership Program.
Golden Valley Electric Association (GVEA)
Dan Bishop, Director of Engineering Services, GVEA
Dan Bishop has been responsible for the design and construction of electric transmission lines
and substations throughout Alaska. His experience includes drafting, structural design,
electrical design, project management, quality control during construction, leading teams of
engineers and technicians, planning studies, budgeting, and executive management. He
received his Bachelor of Science and Master of Science in Electrical Engineering from the
University of Alaska Fairbanks and has been a registered professional engineer since 1993. Mr.
Bishop has been with GVEA since 1997.
Daniel Heckman, Regulatory Manager, GVEA
Daniel Heckman serves as the primary liaison between GVEA and federal and state regulatory
agencies, primarily the Regulatory Commission of Alaska (RCA), as well as regulatory
stakeholders statewide. In addition to his regulatory and compliance oversight responsibilities,
he serves as GVEA’s primary representative on the Railbelt Reliability Council and as GVEA’s
representative on the BPMC project team described in this application. He received bachelor’s
degrees in political science and history from Southern Methodist University in 2010 and his juris
doctor from the Gonzaga University School of Law in 2013. Combined with his prior experience
at an investor-owned utility, Mr. Heckman has 10 years of experience in regulatory affairs.
Chugach Electric Association, Inc. (CEA)
Bruce Aspray, Manager of Transmission & Substation Engineering & Planning, CEA
Bruce Aspray is a professional with experience in the industrial power and electrical utility
industries. Mr. Aspray has specified, built, commissioned, and operated a combined cycle
power plant as well as open air and GIS substations. He is a degreed and licensed Professional
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electrical engineer in the State of Alaska. He is experienced in project management and
construction of utility grade facilities including generation, transmission, substations,
distribution, and renewables.
Andrew Laughlin, Chief Operating Officer, CEA
Andrew Laughlin is a professional with a diverse background in the power industry, specifically,
power delivery project development, design, procurement, project management and
construction. He is a licensed Professional electrical engineer with experience that includes
construction of transmission and substation infrastructure as well as upgrading Static VAR
Compensation, boiler controls and steam turbine generation systems. Mr. Laughlin has
developed project teams for large and small complicated projects.
Dustin Highers, Vice President Corporate Programs, CEA
Dustin Highers is an electric utility professional with a background in power plant operations,
maintenance, construction, commissioning, and engineering support. Mr. Highers’ industry
experience includes 30 years in various industries including maritime, oil and gas, power plant
construction and commissioning, gas turbine field engineering, and electric utility engineering
and management. He is the leader of small and large teams in the execution of enterprise level
projects to achieve corporate goals and objectives. Mr. Highers has demonstrated skill in
complex program and project management for power generator maintenance and large
generation construction projects.
Matanuska Electric Association (MEA)
Ed Jenkin, Chief Operations Officer, MEA
Ed Jenkin is a licensed professional electrical engineer in the State of Alaska with more than 30
years of experience in the utility industry. He is presently the Chief Operations Officer for MEA.
In this role he has oversight of MEA’s system planning, engineering, operations, technical
services, and power system dispatch functions. Within the interconnected Alaska electric utility
system Mr. Jenkin has led or worked on multiple collaborative efforts, including Railbelt electric
reliability and cybersecurity standards development, joint asset management and operations,
power pool formation between MEA and CEA, electric reliability organization legislation, and
regulations on net-metering, regional planning, and standards enforcement. Mr. Jenkin
graduated with a Bachelor of Science in Electrical Engineering from the University of Alaska,
Fairbanks in 1984. He also has a Master of Arts in cross-cultural studies.
Julie Estey, Senior Director of External Affairs and Strategic Initiatives, MEA
Julie Estey is Senior Director at MEA, where she manages the cooperative’s public and member-
facing activities along with strategic plans and special projects. She serves as MEA’s
representative, past chair, and founding member of the Railbelt Reliability Council, the recently
certificated electric reliability organization for the interconnected Railbelt grid. Before joining
MEA, Ms. Estey was the Business Director for the Alaska Center for Energy and Power, an
energy research group at the University of Alaska Fairbanks focused on improving how Alaskans
generate and distribute power. She has experience managing public outreach and engagement
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for controversial transmission and generation capital projects as well as expertise bringing
diverse groups of stakeholders together to develop common solutions.
Brian Hickey, Executive Director, Railbelt Regional Coordination
Brian Hickey is the Executive Director of Railbelt Regional Coordination, working for the CEOs of
the five Railbelt electric utilities. He has more than 40 years of experience in electric power
systems and telecommunications. His experience includes executive leadership and
management, strategic business planning, economic alternative analysis, engineering, design,
project management, and maintenance process development and implementation. Mr. Hickey
has managed numerous generation, transmission, and process development and improvement
projects in his career. He holds a Bachelor of Science in Electrical Engineering from Montana
State University, a master’s certificate in Project Management from ESI/George Washington
University, and a master’s degree in Global Finance from Alaska Pacific University. He is a
licensed Professional Electrical Engineer and PMI Certified Project Management Professional.
Homer Electric Association, Inc. (HEA)
Keriann Baker, Director of Member Relations, HEA
Keriann Baker, Director of Member Relations, oversees the utility’s customer service programs,
public relations efforts, and legislative affairs. Ms. Baker practiced law with Reeves Amodio in
Anchorage and Lewis, Longman & Walker in Palm Beach County, Florida, prior to joining HEA.
She serves as vice chair of the South Peninsula Hospital, Inc., board and previously has served
on numerous boards including several local/state chambers of commerce as well as state and
national bar associations. Ms. Baker received a Bachelor of Science from Utah Valley University
in Orem, Utah, and her juris doctorate from Loyola Chicago School of Law, in Chicago, IL.
Larry Jorgensen, Director of Power, Fuels, & Dispatch, HEA
Larry Jorgensen, Director of Power, Fuels & Dispatch, manages the operation and maintenance
of HEA’s generation facilities, and generation dispatch. His skills include project design and
management, advanced control systems, simulation and modeling, plant commissioning and
startup, personnel training and advancement, and standards development. Mr. Jorgensen
received an Associate in Applied Science in Power Plant Technology and Bachelor of Science in
Energy Management, both from Bismarck State College in Bismarck, North Dakota. He has been
with HEA since 2011.
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Concept Paper: Cover Page
Project Title: Rural Alaska Microgrid Transformation
Topic Area: GRIP Topic #3 (40103(b))
Applicant: The Alaska Energy Authority (AEA) representing the State of Alaska
Business Point of Contact: Curtis Thayer, Executive Director, cthayer@akenergyauthority.org,
907-771-3009
Technical Point of Contact: Rebecca Garrett, Rural Programs Manager,
rgarrett@akenergyauthority.org, 907-771-3042
Project Location(s): Remote Alaska Native villages that are functioning as power production
microgrids. All projects that will ultimately be forwarded under this application will be islanded
from the Alaskan Railbelt, which is Alaska’s main power generation transmission system.
Project Confidentiality: None
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Concept Paper: Project Description
AEA Background:
Alaska Energy Authority (AEA) is the state’s energy office and lead agency for statewide energy
policy and program development. Power systems in Alaska are small and isolated. Alaskan
grids off the main Railbelt are linear (little to no redundancy), almost exclusively reliant on
diesel generation, and are micro in size compared with grids in the contiguous United States.
It is AEA’s mission to reduce the cost of energy in Alaska. In order to meet AEA’s mission, AEA
manages a broad portfolio of supply and demand side energy projects. AEA takes a whole-
community approach in addressing energy cost reduction issues. AEA provides technical
assistance, training, energy planning, project development/management , and emergency
maintenance services. AEA facilitates synergy between planning, projects, funding sources, and
assists communities in the move to project-ready status. AEA also supports the communities
once their power systems are up and running.
Collectively, AEA staff have worked with nearly every community in the state to deliver critical
supply and demand energy services. Likewise, AEA staff are networked to the vast array of
Alaska energy stakeholders such as small rural non-profits and utilities, large regional Alaska
Native Corporations and tribal organizations, conservation organizations, and technology- or
solution-oriented working groups. AEA has a strong capacity to conceptualize, implement, and
successfully complete supply and demand energy projects. This is accomplished through an
outcomes-focused process that leads to a coordinated, statewide approach to overcoming
barriers and building new energy infrastructure for rural Alaskan communities.
Project Background:
Most of the rural Alaska power islanded communities are powered solely by diesel generating
powerhouses. Many of these communities have aging and failing powerhouses and distribution
systems. These systems are fueled by large bulk fuel storage facilities, many of which have been
in service for upwards of sixty years without significant upgrades. AEA is constantly surveying
rural communities in an effort to determine what power island infrastructure is in most need of
upgrades and/or replacement.
As technology moves towards renewable integration in power systems, AEA is in the process of
identifying Alaskan microgrids that could replace their core fossil fuel power production with
renewables. In addition to creating renewable energy production for these communities, AEA
would aim to upgrade/build out the following for each community renewable microgrid:
Renewable power generation creation and system integration (hydro, wind, or solar)
Modern distribution systems and controls
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Battery Energy Storage Systems (BESS)
Modern and emission efficient diesel back-up powerhouse systems
SCADA controls between renewables and diesel back-ups
Due to community remoteness, most diesel powerhouses cannot be entirely removed from a
microgrid due to life-safety concerns. However, there are several communities that could
replace the baseload diesel power production with renewable energy. In order to properly
upgrade an Alaskan microgrid, the renewable power source would need to be built out and
then properly integrated to the back-up diesel power source.
By transforming the above-described communities, millions of gallons of diesel consumption in
Alaska could be displaced each year. This would greatly reduce diesel emissions, the need for
bulk storage, and possible spills in environmentally sensitive areas. See Figure 1 for a graphic
showing the remote, Alaskan communities. The graphic lends an understanding as to the
remoteness and scope of the over two-hundred micro-grid communities.
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Figure 1: Remote Alaska Communities
GRIP Teaming Application:
GRIP Topic #3 encourages interregional and interstate teaming arrangements. AEA initially
pursued teaming with several states on a microgrid application. However, due to the following
reasons, AEA was unable to team with other regions or states:
State procurement laws dictating how partnerships and competitive bids are arranged.
Project applicability.
Common vendor sources.
State procurement laws make teaming with other states in competitive projects a difficult
process that often introduces many areas of conflicting interest. Secondly, AEA found that
Alaska’s definition and application of microgrid was vastly different from that of other states.
Therefore, the similarities of like projects quickly fell apart. Thirdly, the consultants and
contractors that Alaska uses for microgrids are region specific. Essentially, there would be
limited to no applicable sharing of professional resources with other states or regions.
Due to the above stated reasons, Alaska is submitting a microgrid application as a sole state
along with the support of statewide organizations such as Alaska Federation of Natives (AFN)
and Alaska Municipal League (AML). In addition, due to the vastness and distances between the
remote communities, AEA is considering this an interregional project.
Project’s Eligible Uses and Technical Approaches:
AEA actively supports and stays in contact with nearly two-hundred rural communities that are
all islanded microgrids. Some of these communities have renewable resources identified and
available that could replace the baseload diesel powerhouse production.
AEA actively solicits and monitors community power generating status, current deficiencies,
inventory of equipment, and assesses possible future need. This information is stored and
maintained within an AEA database. This live and current information would be reviewed and
refined by AEA in order to select the best projects for community microgrid transformation.
This existing database tool allows AEA a refined method for determining the best projects for
DOE funding of microgrid transformation, and provides AEA a tool for ongoing support and
project success. See Figure 2 for a snapshot showing the community database.
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Figure 2: Community Inventory and Assessment Database
AEA would look for projects that would support baseload power generation replacement of
diesel with renewables. In addition, projects that already have funding in place for the purposes
of project cost matching would be noted and ranked. Finally, the amount of people affected,
the project viability, and the community need would all be factored into the project selection.
AEA has a long history with technical project partners and subject matter experts for rural
Alaskan microgrids. These industry experts would be solicited through a competitive bid
process, and then awarded accordingly. Their combined expertise and experience along with
that of AEA would ensure a successful project. A successful project is being defined as a
microgrid community that is transformed from diesel baseload dependent to renewable
baseload dependent. Additionally, a combination of successful projects would displace millions
of gallons of diesel fuel currently being burned in the communities for energy and heat.
Project Support of State, Local, Tribal, Community and Regional Resilience:
The microgrid transformation projects would first support local community resilience, but also
state resilience. The rural microgrid communities considered for this paper are Alaska native
villages, and are underserved communities in need of a resilient power system. By transforming
the community to clean and reliable energy, the community would be directly benefitted.
As the State Energy Office, AEA has been serving the rural communities for over thirty years.
This vast experience has positioned AEA as an integral energy planning partner with a large
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majority of the remote Alaskan communities. Through AEA’s unique Circuit Rider Program1,
AEA’s Circuit Riders provide eligible utilities with technical assistance to improve the efficiency,
safety, and reliability of their energy infrastructure. This program helps to reduce the risk and
severity of emergency conditions.
The Circuit Rider Program develops strong ties with the remote Alaskan communities. AEA also
responds to emergency calls when these rural communities experience power failures.
Unfortunately, many of these power failures are directly related to failing and aging power
infrastructure. By upgrading local communities to a reliable form of clean energy, this would
reduce the burden on the state to maintain energy production in these rural communities. In
addition, AEA provides the training necessary for the communities to operate their
powerhouses.
A certain amount of the microgrid communities are able to receive diesel fuel by barge, and can
only receive fuel at most twice a year (summer and fall). A large portion of the communities are
only accessible by air, therefore all fuel must be flown in. The flights into the communities is
often on a monthly basis, and at times can be less frequent. The villages frequently experience
missed delivery of fuel supply runs caused by severe weather, equipment problems, personnel
availability, along with a host of other causes. As such, there is a large risk, cost, time, and
staffing coordination required in order to ensure that the rural communities have the fuel
needed for energy production.
The majority of the planes used for these fuel deliveries are WWII era planes. They are aging
out, and those that remain are very difficult to maintain. Climate change has caused significant
river erosion and reduced river flow driving an increase in the number of villages required to
receive fuel by air.
Project’s Grid-Benefitting Outcomes:
The project’s grid benefitting outcomes are Alaska proven concepts of how to effectively
integrate renewables into microgrids. This would provide a robust and repeatable model that
other states and territories could duplicate (such as Hawaii, US Territories, and Indian Tribal
Communities).
Project’s Innovative Technology Risk Reduction and Scalable Development:
The innovative technology risk reduction would be accomplished by Alaska leveraging
renewable, microgrid integration expertise. There are cooperative utilities operating within the
state such as Alaska Village Electric Cooperative (AVEC) that already have experience with
integrating renewables into microgrids. These state resources pooled together with the
1 Circuit Rider Program (3 AAC 108.200-240)
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experience housed at AEA will reduce project risk, along with creating a vetted template that
can be scalable amongst other communities as funding allows.
Project’s Impaction from DOE Funding:
The incredible remoteness of rural Alaskan communities results in extremely high project costs.
This, along with the fact that the rural communities are paying very high energy costs, has made
project funding a difficult process. DOE funding would unlock several community projects that
have gathered enough funding for engineering and design, but are waiting for funding sources
to complete procurement and construction. DOE funding would push several viable projects
across the finish line, resulting in a cleaner and more reliable rural Alaska. See Figure 3 for a
listing of some existing and potentially viable projects with construction costs that are well
within the bounds of this funding opportunity. Since no formal solicitation has occurred,
community/utility names are not included.
Figure 3: Example Listing of Viable Projects
Project’s Readiness, Viability, and Expected Timing:
As discussed above, AEA is aware of several projects that have the engineering and planning
already in place. In addition, AEA is an active participate in many of the projects. The completed
studies have shown that many of the projects are viable and ready for implementation. As
funding is made available, project timing would be able to move forward as procurements are
made and local labor is hired. Specific project locations are not listed in the Concept Paper so as
to not taint the main purpose of paper. The full application to DOE would thoroughly describe
the project selection and vetting process so as to procure funding for successful projects. The
end goal will be to completely transform microgrid communities into self-sustaining and clean
energy power generating islands.
Type of Project
Cost of Energy
$/kWh
Anticipated Annual Gallons of Diesel Fuel
Offset by Proposed Project Project Status
Village Hydro 0.61$ 115,000 Ready for Construction
Village Hydro 0.61$ 20,000 Feasiblity Study Complete
Connects Multiple Villages Hydro 0.45$ 1,558,033 Concept Design, and FERC Permiting
Village Hydro 0.80$ 40,000 Partially Constructed
Village Hydro 0.68$ 130,000 Ready for Construction
Village Hydro 0.70$ 37,000 Ready for Construction
Village Wind/Solar/Battery 0.38$ 2,448,293 Concept
Multiple Individual Villages Solar/Battery 0.75$ 80,000 Concept on per village basis (10 total)
Multiple Individual Villages Wind/Battery 0.75$ 80,000 Concept on per village basis (10 total)
Connects 2 Villages Hydro 0.66$ 16,014 Concept
Village Wind Expansion Wind/Battery 0.37$ 400,000 Ready for Construction
Connects 2 Villages Wind & Electric Boiler 0.52$ 165,000 Design and Permitting
Connects 2 Villages Wind/Battery 0.60$ 270,000 Ready for Construction
6,799,340 Gallons of Diesel Fuel Offset
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GRIP Topic 3, Area of Interest 2:
The microgrid transformation address the GRIP Topic 3, Area of Interest 2 as follows:
DOE AREA OF INTEREST: Adaptive microgrid formation, reliable islanded operations, and
service provision during grid-tied operations:
PROJECT ANSWER: In light of the fact that the rural Alaskan communities are islanded,
they meet the above objective perfectly. Most all rural communities in Alaska are
microgrids, and must maintain reliable islanded operation and service. As of 2023, there
are approximately two-hundred rural microgrids in Alaska. Due to extreme winter
temperatures and other weather events in rural Alaska, all rural microgrids must be
reliable for the life, health and safety of the entire community.
DOE AREA OF INTEREST: Demonstration of reliable and resilient system operations
utilizing high level of distributed renewable generation and energy storage, or increased
levels of non-emitting, non-electric distributed energy resources (e.g., renewable
heating or cooling):
PROJECT ANSWER: The aim of these transformed microgrids is to replace the baseload
power production of diesel with renewable energy. In addition, many of the possible
hydro projects would produce more power than could be used by the typical community
power demand. This excess power would be used for community heat and would
increase storage capacity which is a critical resource in rural Alaska. As noted in Figure 3,
a short list of potential projects would displace nearly 6.8 M gallons of diesel fuel for
electricity generation. Additionally, such excess electricity for heat reduction would
displace heating oil and wood burning.
DOE AREA OF INTEREST: Black-start capable systems and control approaches to
minimize negative impacts during power grid disruption s:
PROJECT ANSWER: All rural Alaska microgrids must be capable of black-starts in light of
the islanded reality of these communities. Therefore, these projects would provide
valuable insight to other entities looking for black-start guidance for microgrids.
DOE AREA OF INTEREST: Provision of grid services from distributed, advanced grid-
forming inverter-based systems at sufficient scale and system complexity:
PROJECT ANSWER: If an inverter system is needed for a project, it would be necessarily
sized for the community’s power demand. This is due to the islanded nature of an
Alaskan microgrid. Therefore, these projects would provide valuable insight to other
entities looking for inverter design and sizing for microgrids.
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Rural Alaskan utilities are particularly challenging in regards to renewable integration.
This is due to the size of power generation being very low relative to the loads in the
community. Alaskan microgrids can be as small as 20 to 30 kW with 5 to 10 kW loads in
the community, which cycle on and off. This results in a very unstable frequency and
power factor. The small grids also suffer from very unbalanced distribution systems,
which artificially increase the amount of generation required and decrease overall
efficiency. This phenomenon is common in rural Alaska. Opposed to this, nearly all of
the hardware designed to support renewable generation is designed for a “Lower 48
Grid,” which operates off of a stable frequency, a stable power factor, and have
balanced distribution. By AEA pioneering the technology needed for stable microgrid
operations, future microgrids in other locations of the United States and territories
could be serviced accordingly.
DOE AREA OF INTEREST: Behind the meter asset operations, aggregation, and
coordination to provide demand response and grid services, including building systems,
distributed generation, energy storage:
PROJECT ANSWER: Since all of these projects will be islanded microgrids, it will
therefore be necessary to balance load with energy creation. All load demand and
power creation will be designed for a balanced operation, mitigating the event of a
microgrid failure. In addition, community building systems, distribution systems, and
energy storage will all be heavily involved with these community microgrid upgrades.
Specifically, excess energy production has great benefit for affected communities.
Excess energy can be used for heat recovery systems, electric boilers, electric heaters,
battery storage, and stored water. This holistic approach will ensure that projects are
carefully selected and designed such that they produce a reliable microgrid for the
affected community.
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Concept Paper: Community Benefits Plan (CBP)
Rural Alaska is primarily Alaska Native and has been underserved, overburdened,
disadvantaged and has environmental justice concerns. These smaller areas are often at a
disadvantage due to technological and funding shortfalls. In addition, these areas are often
plagued by air quality concerns. Rural Alaska also has electricity rates as high as $1.77/kWh,
which is much higher than that of the Lower 48.
The State of Alaska seeks to support the high cost of rural energy production through the AEA
lead Power Cost Equalization (PCE) Program. This program leverages the lower cost electricity
generation along the Railbelt, and helps to subsidize the high cost, rural energy production. By
causing the cost of rural power production to drop through low-cost renewable integration,
much of the funding in the PCE program could be us ed to develop state infrastructure, which
would benefit all Alaskans.
Multiple reports point to the needs and challenges in rural Alaska —see the following for
example reports:
1. Denali Commission’s 2021 Distressed Communities Report2
2. Council on Environmental Quality’s Climate and Economic Justice Screening Tool3
3. Denali Commission’s 2019 Statewide Threat Assessment4
Power generation in rural Alaska depends on diesel engines, often operating in the center of a
village, close to homes, workplaces, and the school. The proximity of the diesel power plant to
residences, schools and other community buildings means that the residents may be more
exposed to exhaust from the power plant than they would be in an urban city, posing increased
health risks. In addition, the constant need for importing fuel leaves the communities
vulnerable to fuel shortages, spills, environmental damage, and many other negative impacts.
Element 1: Community and labor engagement leading to negotiated agreements
Alaska’s utility partners have established, long-term, and mutually valued relationships with the
organized labor community in Alaska. Many of the utilities have collective bargaining
agreements with unions. The approach will be to competitively bid projects that meet the
requirement and intent of the DOE award. AEA would establish a timeline and milestones for
discussions with organized labor, including local and targeted hiring goals, card-check
neutrality, and possible provisions advancing programs to attract, train and retain new workers.
AEA will work to ensure that all Federal laws and requirements are adhered to, with the end
desire of best engaging the local community.
2 2021 Distressed Communities Report
3 Climate and Economic Justice Screening Tool
4 2019 Statewide Threat Assessment
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Rural Alaska Microgrid Transformation
10
The utilities, AML, and AEA have a successful record partnering both as owner/partners in
shared capital projects and in advancing State energy goals and priorities. The state also has
established relationships with tribal entities, local governments, and other State of Alaska
departments, with a focus on workforce and related issues. Early engagement with these core
stakeholders will also help to ensure that the project is cognizant of and in support of local
energy plans and goals.
The State and its utility members individually are accustomed to engaging with local
governments and tribal entities through permitting and regulatory processes for capital
projects. The applicable projects would establish milestones urging earlier dialogue with local
governments and tribal entities. These conversations should begin sufficiently early in order to
inform project development in response to local communities’ needs and concerns. Local
governments and tribal entities are uniquely situated to help identify the most effective actions
the projects can take toward partnerships that advance workforce issues; diversity, equity,
inclusion, and accessibility; and the flow of project benefits to disadvantaged communities.
AEA and partner utilities have extensive experience engaging with local residents and
businesses in town halls and similar formats. AEA is a State entity with obligations to the public
interest. In addition, AEA has the “Circuit Rider Program” referenced above. This program exists
for the purpose of providing skilled labor to address, diagnose, and repair rural powerhouses. In
addition, the Circuit Rider Program provides training for local communities in an effort to
created skilled plant labor. As many community rural microgrids seek to integrate renewable
generation within their existing grids, AEA’s Circuit Rider Program continues to adapt and
support the training of these rural communities in the use of their increasingly complex power
systems.
Element 2: Investing in job quality and workforce continuity
Given Alaska’s relative isolation and general need for living wage jobs, the State of Alaska firmly
supports the development of workforce training institutions. The stakeholder engagement
articulated above is expected to further inform the project team of workforce issues and
opportunities, including opportunities to partner with existing programs and institutions in
order to ensure a skilled and inclusive local workforce.
Alaska is not a Right to Work state. The utilities’ employees who are covered by bargaining unit
agreements are required to join unions consistent with the terms and conditions of the various
utility bargaining unit agreements. Further, the utilities maintain strict policies fostering safe,
healthy, inclusive workplaces free of discrimination and harassment. The utility’s members
support continual development of a skilled, inclusive local workforce, specifically the IBEW-
NECA Alaska Joint Electrical Apprenticeship and Training Trust, individual utility training
programs, the University of Alaska System and other technical training programs. This track
record of investment in the Alaskan and American workforce will be reflected in each of the
projects. AEA will work to ensure that all Federal laws and requirements are adhered to, with
the end desire of best engaging the local community.
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Rural Alaska Microgrid Transformation
11
Alaska will also continue support of STEM and energy literacy programs throughout the state as
an investment in the future pipeline of critical energy-related jobs.
Element 3: Advancing diversity, equity, inclusion, and accessibility
The state will identify and evaluate potential actions to advance diversity, equity, inclusion, and
accessibility in relation to the project. Alaska offers significant opportunities to engage
underserved populations, including Alaska Natives, Pacific Islanders, and veterans. Stakeholder
consultation, including with organized labor, is expected to identify potential workforce
partnerships to encourage participation of these and similar communities in the project.
Element 4: Contributing to the Justice40 Initiative goal that 40% of the overall benefits of
certain climate and clean energy investments flow to disadvantaged communities
As discussed in the beginning of this section, the State believes its projects present a unique
opportunity to extend those benefits resulting from such grid-transformation efforts across a
population of over 85,000 rural Alaskan residents. These benefits are anticipated be realized by
DACs with over 95% of the 200 rural communities which AEA serves being majority Alaska
Native and considered disadvantaged.
The initial approach to this would be identifying potential partners and establishing
relationships to assist in the plan development. Potential partners may include impacted DACs;
State entities such as Department of Environmental Conservation, Department of Commerce,
and Department of Labor and Workforce Development; academic or public policy/research
institutions such as the University of Alaska, Alaska Center for Energy and Power, a nd the
Institute for Social and Economic Research (ISER); as well as tribal and non-governmental
entities, many of whom have prioritized affordable, clean energy as strategic priorities. The AEA
power system database from surveyed communities is a database capturing community needs.
This is a powerful tool for helping the state to understand those communities that have the
most need and that have been underserved.
Alaska works with partners, stakeholders, and project technical teams, and has already
identified measurable, trackable benefits which are most meaningful to impacted communities.
Engagement with institutional partners will help define disadvantaged communities within and
proximate to the project area, and within the projected reach of the defined outcomes.
Formulation of a stakeholder engagement plan and further consultation with DACs and other
partners could help establish mechanisms to measure and track the investments and outcomes.
Communities in the project regions currently face severe health, safety, and economic
consequences resulting from microgrid threats such as infrastructure failure, flooding,
earthquakes, severe cold weather events, and large-scale forest fires remote areas. Projects are
also anticipated to increase clean energy options throughout the region, including DACs and
other rural communities, most of whom are currently powered via diesel-fired generation.
Below are Figures 4, 5, and 6 showing a sample of remote Alaskan communities that may
benefit from this potential funding.
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Rural Alaska Microgrid Transformation
12
Figure 4: Sand Point, Alaska
Figure 5: Tenakee Springs, Alaska. Receiving Cargo
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Rural Alaska Microgrid Transformation
13
Figure 6: Twin Hills, Alaska
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Rural Alaska Microgrid Transformation
14
Concept Paper: Addendum A
Alaska Energy Authority Qualifications, Experience, and Capabilities of the Team:
AEA is an independent and public corporation of the State of Alaska, est. 1976. AEA is governed
by a board of directors with the mission to “reduce the cost of energy in Alaska.” AEA is the
State Energy Office and lead agency for statewide energy policy and program develop ment.
Whether building modern and code-compliant bulk fuel tank farms, upgrading to high-
efficiency generators in rural powerhouse systems, or integrating renewable energy projects,
AEA emphasizes community-based project management. AEA’s core programs work to diversify
energy Alaska’s energy portfolio, lead energy planning and policy, invest in Alaska’s energy
infrastructure, and provide rural Alaska with technical and community assistance.
AEA has more than forty professionals on staff, including but not limited to engineers, planners,
project developers, project managers, accountants and finance officers, and policy analysts. As
the state’s designated energy office, AEA has managed hundreds of billions of dollars in federal,
state, and private funds to plan and build infrastructure in urban and rural Alaska. AEA’s
building is located conveniently in Anchorage with adequate technology, spacing, and
facilitation equipment. AEA has capabilities for video conferencing, hosting meetings, and a
team for procuring services and materials.
Collectively, AEA staff have worked with nearly every community in the state to deliver critical
supply and demand energy services. Likewise, AEA staff are networked to the vast array of
Alaska energy stakeholders from small rural non-profits and utilities, large regional Alaska
Native Corporations and tribal organizations, conservation organizations, and to technology- or
solution-oriented working groups. AEA has the capacity to conceptualize, implement, and
successfully complete supply and demand energy projects. This is accomplished through an
outcomes-focused process that positions the agency well to lead a coordinated joint team that
will overcome barriers to implement the Rural Alaska Microgrid Transformation project.
AEA has the experience, expertise, equipment, and staff ready to achieve the project objectives
set out in this opportunity. The Alaska Energy Authority has a team of staff specifically
designated for grants, compliance, procurement, contracting, and finance. Each of these teams
have adequate resources to ensure the project is on budget and on schedule.
AEA is engaged in all levels of consumer energy from project and resource identification ,
appropriate design, and to financing and maintenance. Over decades of experience developing
energy projects in Alaska, AEA has continuously improved on process, application of
technology, and delivery of service. AEA integrates energy technology and advances in grid
services into all program areas both on the supply- and demand-side.
AEA (as owner of the state’s largest hydro facility and select transmission assets in the Railbelt
region of Alaska, and in furtherance of its mission to reduce the cost of energy in the State )
plays an important role in ensuring that sound public policy and energy planning initiatives
within the region maximize the potential benefits to the broadest group of stakeholders.
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Rural Alaska Microgrid Transformation
15
Without a specific certificated area, and as owners of asset’s which cross multiple jurisdictional
boundaries, AEA is uniquely positioned to facilitate discussions amongst stakeholder groups
and find solutions for the region in its entirety.
AEA also manages the Renewable Energy Fund, the Power Project Loan Fund, the
Power Cost Equalization Program, and various Energy Efficiency and Conservation Programs.
AEA provides grants and loans for qualified energy infrastructure projects and owns energy
infrastructure for the benefit of Alaskans. AEA has the legal authority to enter into a financial
assistance relationship with U.S. Department of Energy as discussed in this application.
Additionally, as a state agency, AEA produces an annual report to the Governor, yearly federal
single audit, and financial statements.
The Alaska Energy Authority (AEA) has staff and management systems in place to administer
this potential microgrid transformation award. AEA has a full suite of highly qualified
individuals, and a system of checks and balances in place. AEA’s financial and project
management capabilities are demonstrated in the yearly audit and financial report, located on
AEA’s website5.
AEA has successfully managed and completed well over three-hundred grants in the last decade
from many different agencies as well as private funds from the Volkswagen Settlem ent and
Wells Fargo Foundation.
AEA was a successful applicant to the BUILD program in 2020 for the Alaska Cargo and Cold
Storage Project for $21 million. In 2022, the Department of Defense awarded AEA over $12
million to extend power to the Black Rapids training site near Delta Junction.
AEA has thirty active awards with the Denali Commission, AEA’s current federal cognizant
agency. These awards touch on every aspect of what the agency does. There are awards for
design and construction of Rural Power System Upgrades (RPSU) and Bulk Fuel Upgrades (BFU);
small renewable projects that will be integrated into a remote diesel power systems; energy
efficiency upgrades, Utility Clerk, Power House Operator, and Bulk Fuel Operator training; small
maintenance and improvements for both power systems and tank farms; as well as Circuit Rider
technical assistance and on-site training. See Figure 7 for a listing of some of the AEA active
funding projects.
5 AEA’s Website: https://www.akenergyauthority.org/Who-We-Are/Newsroom/Publications-
and-Resources
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Rural Alaska Microgrid Transformation
16
Figure 7: Example Listing of Active AEA Projects
Business Point of Contact: Curtis Thayer, Executive Director: Curtis W. Thayer has served as
executive director of the Alaska Energy Authority (AEA), the state's energy office and lead
agency for statewide energy policy and program development. Before joining AEA, Thayer
served as president and chief executive officer of the Alaska Chamber, the largest state trade
association.
Previously, he was the commissioner for the Department of Administration and cabinet
member for Governor Sean Parnell. As part of his public service, he served as the deputy
commissioner of the Department of Commerce, Community, and Economic Development, and
worked in Washington, D.C. with Alaska’s Congressional Delegation.
Formerly, he was on the management team of ENSTAR Natural Gas Company and the Alaska
Gas Producers Pipeline Team. Thayer has served on boards at Alaska Housing Finance
Corporation, Alaska Gasline Development Corporation, Alaska Retirement Management Board,
Alaska Royalty Oil and Gas Development Advisory Board, United States Chambers’ Committee
of 100, and currently chairs Alaska’s Board of Marine Pilots.
Award Year Agency Award Amount Project Description
Multiple Denali Commission 20,000,000$
Rural Infrastructure and
Training
AEA has partnered with Denali Commission from
it's inseption working on Bulk Fuel, Rural Power
System, Renewable Energy, Energy Efficiency and
Training Programs since 1999. Award amount
reflects 30 current active awards.
2022 Department of Defense 12,711,691$
Black Rapids Line
Extension
AEA along with Golden Valley Electric Association
(GVEA) will extend an electric power line
approximately thirty-four miles to the south,
making electrical power available to Black Rapids
Training Site.
2021 EPA 506,679$
Diesel Engine
Replacement
Replace Diesel Engines used for prime power in
rural Alaskan communities. Match required under
this program from AEA capital and VW Trust is
$506,679
2019/2020 EPA 964,479$
Diesel Engine
Replacement
Replace Diesel Engines used for prime power in
rural Alaskan communities. Match required under
this program from AEA capital and VW Trust is
$964,479
2020 US DOT 21,000,000$
Alaska Cargo and Cold
Storage Project
Highly efficiency climate controlled cargo facility
at the Ted Stevens Anchorage International Airport
2021 USDA High Energy Cost Award 2,974,420$
Napaskiak Rural Power
System Upgrade
New power house module and small distribution
upgrades. This project is currently estimated at
$4.8 million
2018 Volkswagen Settlement 8,125,000$ Multiple
AEA has a public Benificiary Mitigation Plan that
includes Electric Vehicle Charging Infrastructure,
School Bus Replacement, Public Transit Bus
Replacement, Replacement of Diesel Engines Used
for Prime Power
AEA Qualification and Funding Sources
Active Projects
Grid Resilience and Innovation Partnerships (GRIP)
U.S. Department of Energy
DE-FOA-0002740
Rural Alaska Microgrid Transformation
17
A graduate of the United States Department of Energy’s National Renewable Energy Laboratory
Executive Energy Leadership Institute program, Thayer has gained a comprehensive
understanding of advanced energy technologies that has helped him guide his organizations in
making energy-related decisions. He is also an alumnus of the United States Chamber of
Commerce Foundation's Institute for Organization Management, which recognizes graduates as
leaders in their industries and organizations.
Thayer earned his bachelor’s degree from the University of Alaska Fairbanks with a major in
political science and a minor in business.
Technical Point of Contact: Rebecca Garrett, Rural Programs Manager: Rebecca Garrett has
been with Alaska Energy Authority since 1997 and has managed projects and programs in
varying size and complexity since 1998. She earned her project management professional
(PMP) certification and keeps an active registration. She will take on the day to day
administration of this award starting by preparing the Project Management Plan. From there
she will assign individual projects to qualified project managers who will provide project
oversight, review and accept plans, procedures, deliverables and reports. Ms. Garrett will be
responsible for project communications between contractors, consultants and the AEA team.
She will track specific contractual deliverables against the schedule to ensure contractors are on
track to meet critical milestones. She will be the primary point of contact for the award.
AEA’s Controller will oversee the project financial progress. When the Project Management
Plan is accepted, a grant agreement will be issued to the individual project sites. Each Project
has a unique project code and grant number used for tracking each funding source and
required match. The finance team will certify financial reports for Department of Energy
reporting requirements.
AEA’s Grants Manager will oversee the award from Department of Energy and the grant
agreement documents with the remote Alaskan communities. AEA will ensure compliance with
the funding requirements and timely reporting.
813 W Northern Lights Blvd, Anchorage, AK 99503 Phone: (907) 771-3000 Fax: (907) 771-3044 Email: info@akenergyauthority.org
REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG
MEMORANDUM
TO: Curtis W. Thayer, Executive Director
FROM: Bryan Carey, P.E., Director of Owned Assets
DATE: December 23, 2022 RE: Bradley Lake Required Project Work Bradley Lake Hydroelectric Project (Project) output has been constrained by transmission constraints since the Project was constructed. Required Project Work will enable more energy to be transmitted with less energy losses and greater system stability. The Required Project Work will be paid for by utility contributions to Project. Projects that have been vetted and approved as Required Project Work are:
• Sterling - Quartz Transmission Upgrade
• Bradley - Sterling Transmission Upgrade
• Three Battery Storage Systems (South, Central, and North)
Project Updates: AEA closed December 2, 2022 on a $166 million dollar bond package for Required Project Work. The bond is paid for with utility funds for the Project. Transmission upgrades are to receive 65% and Battery Energy Storage Systems 35% of the bond proceeds. Sterling – Quartz Transmission Upgrade.
• Bid to remove the old 69 kVa line in this section was awarded to Lineworks, LLC. Bid was
within budget. Lineworks is planning to remove old line starting in January and finish in
the Spring.
• Chugach Electric Association, Inc. is proceeding with the design and permitting of the
transmission line rebuild to 230 kVA standards. Construction work would be broken up
between three phases (years) to not exceed a duration each year that would reduce
ability to export Bradley Lake energy. First construction period would be late 2024.
Construction completion 2028.
Battery Energy Storage Systems Homer Electric Association (HEA) battery is operating. AEA is performing due diligence on the battery prior to purchasing in whole or part for the Project. AEA is awaiting responses to information requested of HEA. Specifications are still being developed for the Central and Northern batteries.
813 W Northern Lights Blvd, Anchorage, AK 99503 Phone: (907) 771-3000 Fax: (907) 771-3044 Email: info@akenergyauthority.org
REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG
RGYAUTHORITY.ORG
MEMORANDUM
DATE: December 22, 2022
TO: Curtis Thayer, Executive Director
THROUGH: Audrey Alstrom, P.E., Director, Alternative Energy and Energy Efficiency
FROM: Taylor Asher, Project Manager
SUBJECT: State Energy Security Plan Update
Background
The Alaska Energy Authority (AEA) is working with statewide energy infrastructure stakeholders
to develop Alaska's State Energy Security Plan (SESP). The energy sector is uniquely critical as all
other infrastructure sectors depend on power and/or fuel to operate. A threat on energy
infrastructure can directly affect the security and resilience within and across other critical
infrastructure sectors — threatening public safety, the economy, and national security.
The Alaska Energy Authority (AEA) receives yearly formula funds from the State Energy Program
(SEP) administered by the U.S. Department of Energy. The Infrastructure Investment Jobs Act
(IIJA) changed the requirements of the SEP, specifically requiring states to develop an Energy
Assurance/Security plan. In order to meet these requirements and continue to be eligible for
federal SEP funds, AEA competitively procured a contract with ICF to develop the plan
Individual SESPs are an essential part of energy security planning. SESPs describe the state’s
energy landscape, people, processes, risks, and the state’s strategy to build energy resilience.
More specifically, the plans detail how a state, working with energy partners, can secure its
energy infrastructure against all physical and cybersecurity threats; mitigate the risk of energy
supply disruptions to the State; enhance the response to, and recovery from, energy disruptions;
and ensure that the state has secure, reliable, and resilient energy infrastructure.
The SESP will meet the requirements of the Department of Energy (DOE) as outlined in Section
40108 of the bipartisan Infrastructure Investment and Jobs Act. The IIJA requires participation
and input from various stakeholders across the state to ensure the plan is comprehensive and
has statewide participation and support. The team developed an advisory committee that meets
every six weeks to help inform the plan. The advisory group currently consists of representatives
from:
Alaska Center for Energy and Power (ACEP)
Alaska Village Electric Cooperative (AVEC)
Chugach Electric Association (CEA)
Department of Natural Resources (DNR)
Department of Environmental Conservation (DEC)
Alaska Energy Authority Page 2 of 3
Department of Military and Veterans Affairs (DMVA)
Enstar Natural Gas
Golden Valley Electric Association (GVEA)
Governor’s office
Homer Electric Association (HEA)
Matanuska Electric Association (MEA)
National Association of State Energy Officials (NASEO)
Regulatory Commission of Alaska (RCA)
Usibelli Coal Mine
Status
AEA and ICF developed an advisory group charter to direct the committee’s work and provide
stakeholders with a basic understanding of roles and responsibilities. ICF and AEA meet every
other week to ensure the project Is on track and will be complete for submission to DOE at the
end of June 2023. The advisory committee has met twice so far, with the next meeting
scheduled for February 10, 2023. The team has begun conducting interviews with stakeholders
to better understand the energy landscape, response to energy security and threats, and
processes and procedures. Interviews conducted so far include DMVA, DNR, and RCA. The team
hopes to interview others, including:
Department of Transportation and Public Facilities about road clearing, HOS waivers, and
airport runways
AVEC, about rural utility activities
Chugach Electric Association, about Railbelt utility activities
ENSTAR
Vitus Energy, about fuel delivery to western Alaska and interior river ports and Vitus
terminals
Everts Air, about delivery of fuel by air
We also propose emailing the following stakeholders:
Department of Environmental Conservation, about spill response and generation permits
Alaska Railroad freight services, about petroleum and coal movements
Due to the sensitivity of the information, some of the stakeholders have requested Non-
disclosure Agreements (NDAs). AEA is working with the State Attorney General to develop a
template that AEA, ICF, and the stakeholders can agree on. Currently, no NDAs are in place.
However, files for this program are considered confidential and not subject to Public Information
Requests. The team will utilize the Traffic Light Protocol (TLP), which outlines the necessary steps
for keeping files confidential between parties.
ICF has submitted the 1st draft of the Alaska Energy Landscape for review by AEA, and the team
has developed maps for the plan. The next deliverable will include the Risk Assessment/Profile,
followed by the full plan. The project is on schedule to be ready for submission to DOE in June
2023.
Alaska Energy Authority Page 3 of 3
Schedule
Budget
A. Personnel $ 43,181.82
B. Contract $ 150,000.00
C. Total Direct Charges $ 193,181.82
D. Indirect Costs $ 6,818.18
E. Total $ 200,000.00
Contract
awarded to ICF
October 6, 2022
Public Meeting
November 4,
2022
Energy
Landscpe/State
Profile DRAFT
November 11,
2022
Risk Assessment
Profile DRAFT
December 15,
2022
Energy
Landscape and
Risk Assessment
FINAL January
27, 2023
Public Meeting
Februrary 10,
2023 (est)
State Energy
Security Plan
(SESP) DRAFT
March 3, 2023
SESP Final May
31, 2023
Public Meeting
June 16, 2023
(est)
813 West Northern Lights Boulevard, Anchorage, Alaska 99503 T 907.771.3000 Toll Free 888.300.8534 F 907.771.3044
REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG
RGYAUTHORITY.ORG
TO: Curtis Thayer, Executive Director
FROM: Rebecca Garrett, Rural Programs Manager
DATE: December 27, 2022
SUBJECT: AEA Rural Programs & Projects Highlights
Training Highlight
AEA, with funding partner the Denali Commission, provided training at the Seward
AVTEC facility for 207 power plant, bulk fuel operators, and person in charge (PIC) over
the last five years. This training is fundamental to maximizing the useful life of rural
energy infrastructure. It also develops well-paying local jobs in rural communities.
Rural Power System Upgrades (RPSU)
The power system upgrade in Nikolai is expected to go on line in February, and Venetie
is expected to go on-line in September. Powerhouse modules for Rampart and
Napaskiak will be assembled in southcentral Alaska over the winter, with the goal of
installing Rampart in the fall of 2023. Extensive onsite training is conducted with the
local operators and utility managers before turning the project over to the community.
The estimated cost is $10 million for the Napaskiak and Rampart projects. This reflects a
price increase of approximately 43% over the course of design for these powerhouse
modules. The cost increase can be directly linked to inflation, logistics delays, and work
force shortages.
There are five RPSU projects in construction and three that are funded for
conceptual/design, and 20 maintenance and improvement/DERA projects.
Bulk Fuel Upgrades (BFU)
Alaska’s approximately 400 eligible bulk fuel facilities face mounting challenges from
aging infrastructure and increased ocean and river erosion. The inventory and
assessment program has an awarded contract and training sites to be kicked off this
winter in southeast Alaska. This will be a multi-year effort and provide accurate
information regarding the condition of bulk fuel facilities which will enable the same
benefits realized from the power systems inventory and assessment.
Alaska Energy Authority Page 2 of 2
New bulk fuel tank farms cost $5-8 million. With limited funding, the BFU program has
moved heavily to maintenance and improvement type projects that require local
matching funds to ensure a complete project. Under this program, each community has
a list of maintenance projects, approximate cost, and priority for each project. There are
currently 17 M&I projects in various stages.
There are five BFU projects in construction (Kasaan, Nondalton, Shungnak, Venetie, and
Nunapitchuk) and two shovel ready BFU projects waiting for funding, Scammon Bay and
Ekwok.
Program Highlights
•Jeff Williams, long time manager of the PCE program, retired in November 2022. At that
time there was a backlog of over 300 unprocessed payments. All payments will be current
by the end of January 2023
•Effective FY 2023 residential customers will be eligible for a PCE credit of up to 750 kWhs
an increase from 500 kWhs.
•It is anticipated that the new PCE Statistical Report will be complete in early February 2023
•The decrease in performance of the PCE endowment investments will impact funding that
previously came from excess earnings.
•The communities of Klukwon and Chilkat, which are served by the same utility, were
approved to combine their Utility Monthly Reports providing a potential savings of over
$12,000
Attached are the following items:
1.Department of Revenue PCE Endowment Fund Report
2.PCE Endowment Fund Net Asset Value as of November 30, 2022
3.PCE Schedule of Investment Income/Changes in Invested Assets as of November 30, 2022
4.Percentage of Communities Served by an Eligible Utility Receiving PCE Payments
5.Share of Eligible PCE Residential kWh's Reimbursed
AEA LOAN DASHBOARD REPORT
AEA POWER PROJECT LOAN FUND
YEAR TO DATE
07/01/2022 LOAN ACTIVITY EARNINGS
START DATE LOAN CATEGORY STARTING BALANCE FUNDS
DISBURSED
PAYMENTS
RECEIVED
ENDING
BALANCE
INTEREST
RECEIVED
LATE FEES
RECEIVED
INTEREST +
LATE FEES
19 AEA POWER PROJECT FUND LOANS 27,534,898 54,486 (244,076) 27,345,308 75,447 1,376 76,823
TOTAL # OF PPF
LOANS
0 LOAN PROGRAM SUMMARY
# OF DELINQUENT PPF
LOANS Outstanding Loans per Trial Balance 27,345,308.32$
-$ Uncommitted Cash Balance 11,794,563.60$
LOANS DELINQUENT
AMOUNT ($)Loan Commitments 597,982.76$
0.000%Total Loan Program 39,737,854.68$
% OF DELINQUENT
LOANS TO PORTFOLIO
BALANCE
11/30/2022
END DATE
FISCAL YEAR-TO-DATE LOAN PORTFOLIO ACTIVITY (07/01/2022 - 11/30/2022 )
Waterfall Creek Hydro - King Cove, Alaska
Print Date: 12/15/2022
Page 1 of 2
AEA POWER PROJECT FUND LOANS BY ENERGY REGION & PROJECT TYPE
OUTSTANDING BALANCES & NEW ACTIVITY
ENERGY REGION AEA PPF LOAN
BALANCE
REMAINING
LOAN
COMMITMENTS
NEW
APPLICATIONS
IN PROCESS
# OF AEA PPF
LOANS TOTAL
ALEUTIANS 2,468,749 - 65,000 4 2,533,749
BERING STRAITS - - - - -
BRISTOL BAY 437,676 - 514,500 2 952,176
COPPER RIVER/
CHUGACH - - - - -
FISCAL YEAR-TO-DATE LOAN PORTFOLIO ACTIVITY ( - )KODIAK - - - - -
LOWER YUKON-
KUSKOKWIM 184,028 - - 2 184,028
NORTH SLOPE - - - - -
NORTHWEST ARCTIC - - - - -
RAILBELT 3,598,738 (12,979) 4,994,500 4 8,580,259
SOUTHEAST 19,268,706 - - 2 19,268,706
27893070.2 YUKON-KOYUKUK/
UPPER TANANA 1,160,257 597,983 2,258,829 5 4,017,068 10422145.37
58569.36 27,118,154 585,004 7,832,829 19 35,535,987 TOTAL
BIOMASS
$89,458
DIESEL
$703,878
HYDRO
$22,979,335
SOLAR
$5,529,913
TRANSMISSION
$1,586,607
TANK FARM
$2,258,829
WIND
$2,387,967
AEA PPF LOANS BY PROJECT TYPE -NEW & OUTSTANDING BALANCE
BIOMASS
1
DIESEL
5
HYDRO
5
SOLAR
2
TRANSMISSION
1
TANK FARM
1
WIND
4
AEA PPF LOANS BY PROJECT TYPE
Print Date: 12/15/2022
Page 2 of 2
Award No Project Name DC Funding Perf. Period Beg Perf. Period Thru Actions Since Last Report
Estimated Jobs
Created
Permanent Jobs
Created
01432-11 BFU - Tatitlek 1,472,000 6/1/2013 3/31/2023 Extend Period of Performance 15 2
01474-08 BFU - Chalkytsik 517,500 6/16/2015 6/30/2023 Extend Period of Performance 15 2
01485-05 START Communities Tech Asst 375,000 11/1/2015 3/31/2023 None 2 0
01492-09 BFU - Beaver 608,000 7/6/2016 6/30/2023 Extend Period of Performance 5 2
01500-08 Bulk Fuel Operator Training 1,610,000 9/1/2016 6/30/2023 None 3 0
01515-08 Circuit Rider Program 1,200,000 1/1/2017 12/31/2023 Extend Period of Performance 3 0
01516-07 RPSU - Maintenance & Improvement 748,776 10/1/2016 12/31/2024 Extend Period of Performance 20 0
01523-07 Miscellaneious Small M&I Projects 1,220,000 6/1/2017 12/31/2024 Extend Period of Performance 20 0
01525-07 Power Plant Operator Training 872,514 8/15/2017 6/30/2023 None 3 0
01544-06 Itinerant Utility Training 500,000 3/1/2018 12/31/2023 None 3 0
01548-07 RPSU M&I - Statewide 3,090,000 5/1/2018 9/30/2023 None 20 0
01551-06 RPSU - Venetie 250,000 5/1/2018 12/31/2024 Extend Period of Performance 5 2
01557-03 Barge Headers and Fill Lines 3,976,820 10/1/2018 12/31/2024 None 60 0
01571-02 BFU - Nunapitchuk 3,522,546 8/15/2019 12/31/2023 None 30 2
01574-02 RPSU - Nikolai 1,733,740 8/1/2019 12/31/2023 Extend Period of Performance 5 2
01575-04 RPSU - Nelson Lagoon 135,455 8/1/2019 12/31/2025 Extend Period of Performance 5 2
01576-04 RPSU - Rampart 1,733,740 8/1/2019 12/31/2024 None 5 2
01577-05 RPSU - Napaskiak 335,455 8/1/2019 12/31/2024 None 26 2
01600-02 VEEP - Statewide 875,000 6/15/2020 12/31/2023 None 3 0
01610-03 BFU - Ekwok 100,000 9/1/2020 6/30/2022 Close out 0 2
01611-01 Engineering Library 100,000 9/1/2020 6/30/2023 Extend Period of Performance 1 0
01618-00 Fivemile Creek Hydroelectric Project 2,880,000 9/1/2020 6/30/2024 Extend Period of Performance 65 2
01628-01 Craig High School Biomass Project 440,417 11/1/2020 12/31/2022 Close out 0 2
01645-01 O&M Manual Conversion and Training 75,000 4/1/2021 9/30/2023 None 4 0
01646-00 Bulk Fuel Inventory and Assessment 480,000 4/1/2021 12/31/2023 None 20 0
01647-01 Port Heiden Electrical Distribution Upgrades 1,905,600 4/1/2021 12/31/2024 None 8 0
01666-01 DOE Littoral Power Systems Hydrokinetic Project 80,642 11/15/2021 3/31/2023 None 1 0
01704-00 RPSU - Chalkyitsik 200,000 10/1/2022 3/31/2024 None 5 2
01705-00 RPSU - Red Devil 200,000 10/1/2022 3/31/2024 None 5 2
Total Funding for Active DC Awards:31,238,205
Less Total Spending on Active DC Awards:(17,403,892)
Total Funding Remaining on Active DC Awards:13,834,313
Active Denali Commission Awards
As of 12/23/2022
DATE DESCRIPTION TOPIC AND AUDIENCE LOCATION TEAM MEMBER
December 13, 2022 Presentation Grid Resiliency Program Presentation Public Meeting #3 In-Person/Virtual Conner Erickson
December 12, 2022 Roundtable Northwest Arctic Leadership Team's Winter Summit In-Person Curtis W. Thayer
December 9, 2022 Presentation State Energy Security Plan Presentation to the Bradley Lake Project Management Committee In-Person Rebecca Garrett
December 8, 2022 Media Interview Alaska Electric Vehicle (EV) Infrastructure Plan, Jenny Willoughby, KTNA Virtual Curtis W. Thayer
December 8, 2022 Presentations Alaska EV Infrastructure Plan Presentation to the Alaska Municipal League Annual Local Government
Conference In-Person Josi Hartley
December 7, 2022 Presentation Alaska EV Infrastructure Plan Presentation to All Hazards Planning Committee Virtual Dan Aicher
December 7, 2022 Panelist AEA Update to Alaska Municipal League Annual Local Government Conference In-Person Curtis W. Thayer
December 7, 2022 Presentation AEA Update Presentation to Alaska Power Association Board of Directors Meeting In-Person Curtis W. Thayer
December 6, 2022 Presentation AEA Overview Presentation to the General Consulate of Canada In-Person Curtis W. Thayer
November 28, 2022 Presentation Alaska EV Infrastructure Plan Presentation to National Association of Women in Construction In-Person Josi Hartley
November 23, 2022 Media Interview Renewable Energy Fund Round 15, Matt Wilson, KSRM Radio Kenai Phone Curtis W. Thayer
November 17, 2022 Presentation Bradley Lake and Dixon Study Plan Presentation to Public Agencies In-Person/Virtual Bryan Carey, PE
November 15, 2022 Attendee/Presenter Financing Food Security in Alaska Presentation to Governor's Food Security Workshop In-Person Curtis W. Thayer
Tim Sandstrom
November 9, 2022 Presentation Alaska EV Infrastructure Plan Presentation to Alaska Municipal Climate Network Virtual Taylor Asher
November 3, 2022 Presentation Alaska EV Infrastructure Plan Presentation to Juneau Decision Makers In-Person Audrey Alstrom, PE
November 2, 2022 Meeting Alaska EV Infrastructure Plan Presentation Discussion with AELP & SE Conference In-Person Audrey Alstrom, PE
October 27, 2022 Media Interview Approved Bonding for Transmission Upgrades and Battery Storage, Sabine Poux, KDLL Phone Curtis W. Thayer
October 20-21, 2022 Table Alaska EV Infrastructure Plan Presentation to Alaska Federation of Natives Annual Convention In-Person Taylor Asher
October 24, 2022 Presentation Alaska EV Infrastructure Plan Presentation to Wasilla City Council In-Person Taylor Asher
October 20, 2022 Table Alaska EV Infrastructure Plan Presentation to Mat-Su Transportation Fair In-Person Dan Aicher
October 14, 2022 Media Interview Alaska’s EV Infrastructure Deployment Plan, Alex Bengel, KTVF 11 Phone Curtis W. Thayer
AEA COMMUNITY OUTREACH
Last Updated on January 4, 2023 (6-Month Look Back)
813 W Northern Lights Blvd, Anchorage, AK 99503 • Phone: (907) 771-3000 Fax: (907) 771-3044 • Email: info@akenergyauthority.org • Website: akenergyauthority.org
DATE DESCRIPTION TOPIC AND AUDIENCE LOCATION TEAM MEMBER
October 11-14, 2022 Attendee National Association of State Energy Officials Annual Meeting In-Person Curtis W. Thayer
October 13, 2022 Presentation Alaska EV Infrastructure Plan Presentation to The Alliance In Person Taylor Asher
October 10, 2022 Public Comment Alaska EV Infrastructure Plan Presentation to Fairbanks City Council Phone Taylor Asher
October 6, 2022 Presentation Energy and Infrastructure in Alaska Presentation to Seward Chamber of Commerce In Person Curtis W. Thayer
September 30, 2022 Press Conference Governor's Signs Administrative Order No. 340 Press Conference In Person Curtis W. Thayer
September 29, 2022 Media Interview Alaska’s EV Infrastructure Deployment Plan, Dan Bross, KUAC Radio Phone Curtis W. Thayer
September 28, 2022 Media Interview Alaska’s EV Infrastructure Deployment Plan, Anthony Moore, KSRM Radio Phone Curtis W. Thayer
September 27, 2022 Presentation Alaska EV Working Group Technical Session Virtual AEA EV Team
September 26, 2022 Presentation FY24 AEA Budget Development Presentation to Office of Management and Budget Virtual Curtis W. Thayer
September 26, 2022 Attendees 2022 Clean Transportation Leadership Roundtable In Person AEA EV Team
September 20, 2022 Presentation Alaska EV Infrastructure Deployment Plan Workshop Presentation to Fairbanks Stakeholders In Person Curtis W. Thayer
Audrey Alstrom
September 20, 2022 Presentation AEA Overview Presentation to Golden Valley Electric Association In Person Curtis W. Thayer
September 14-16, 2022 Participant National Renewable Energy Laboratory: Executive Energy Leadership Program In Person Curtis W. Thayer
September 14, 2022 Attendee Houston Solar Farm Groundbreaking Ceremony In Person Conner Erickson
Karen Bell
September 7, 2022 Presentation Grid Resiliency Program Presentation Public Meeting #2 In-Person/Virtual Conner Erickson
September 7, 2022 Presentation Grid Resiliency Program Presentation Public Meeting #1 In-Person/Virtual Conner Erickson
September 7, 2022 Attendees/Exhibitor Infrastructure Grant Symposium Hosted by Senator Lisa Murkowski In Person AEA Team
August 24, 2022 Presentation Transmission Upgrades Presentation to Greater Fairbanks Chamber of Commerce Energy, Environment &
Natural Resources Committee Virtual Curtis W. Thayer
August 24, 2022 Media Interview Hydropower in Alaska, Rachael Kvapil, Alaska Business Phone Curtis W. Thayer
August 23, 2022 Presentation Alaska EV Infrastructure Plan Presentation to FEDC Energy for All Alaska Task Force Virtual Curtis W. Thayer
August 19, 2022 Exhibitor 2022 Alaska State Fair Energy Day In Person AEA Team
August 15, 2022 Presentation Bradley Lake and Dixon Overview Presentation to National Hydropower Association In Person Audrey Alstrom, PE
August 12, 2022 Exhibitor Golden Valley Electric Association's EV Member Event & Car Display In Person Taylor Asher
August 10, 2022 Presentation AEA Overview Presentation for United States Department of Energy Office of Indian Energy Policy and
Programs In Person
Curtis W. Thayer, Audrey
Alstrom, PE
Brandy Dixon
AEA Community Outreach Page 2 of 3
DATE DESCRIPTION TOPIC AND AUDIENCE LOCATION TEAM MEMBER
August 10, 2022 Presentation AEA Overview Presentation to Ahtna Incorporated In Person Curtis W. Thayer
August 8, 2022 Presentation Energy and Infrastructure in Alaska Presentation to Juneau Chamber of Commerce In Person Curtis W. Thayer
August 8, 2022 Presentation Alaska EV Infrastructure Deployment Plan Presentation to AEA Board of Directors In Person Audrey Alstrom, PE
July 27, 2022 Presentation Energy and Infrastructure in Alaska Presentation to Anchorage Chamber of Commerce In Person Curtis W. Thayer
July 20-22, 2022 Participant National Renewable Energy Laboratory: Executive Energy Leadership Program In Person Curtis W. Thayer
July 20, 2022 Legislative Inquiry Representative Mike Cronk on EV Plan and Volkswagen Mitigation Plan Phone Curtis W. Thayer
July 18, 2022 Legislative Inquiry Senator Lyman Hoffman on Senate 243: Pwr Cost EQ: Raise, Endow Fund Investment Email Curtis W. Thayer
July 15, 2022 Provide Quote Arctic Road Rally for Fairbanks Daily News-Miner Email Curtis W. Thayer
July 15, 2022 Provide Quote Power Cost Equalization Kilowatt Increase for Office of Governor Mike Dunleavy Press Release Email Curtis W. Thayer
July 15, 2022 Media Interview Alaska’s EV Infrastructure Implementation Plan, Sabine Poux, KDLL Phone Curtis W. Thayer
July 14, 2022 Presentation Renewable Energy Presentation to Alaska Native Science and Engineering Program’s Science, Technology,
Engineering, and Math Career Exploration In Person Audrey Alstrom, PE
July 13, 2022 Presentation EV Plan Listening and Public Feedback Session #2 to Public In Person and Virtual
Audrey Alstrom, PE, Dan
Aicher, Taylor Asher,
Josi Hartley
July 13, 2022 Presentation EV Plan Listening and Public Feedback Session #1 to Alaska EV Working Group In Person and Virtual
Audrey Alstrom, PE, Dan
Aicher, Taylor Asher,
Josi Hartley
AEA Community Outreach Page 3 of 3
December 21, 2022 06:30 AM Eastern Standard Time
MILPITAS, Calif.--(BUSINESS WIRE)--Imperalis Holding Corp. (OTC: IMHC), to be renamed TurnOnGreen, Inc.
(“TurnOnGreen” or the “Company”), announced today the expansion of the Company’s electric vehicle (EV) charging
network through the addition of two AVIS Car Rental locations in Alaska. The Company has deployed and activated
multiple high-power networked EVP1100 Level 2 EV chargers at the AVIS licensee’s Anchorage and Juneau locations.
AVIS Alaska has operated locations in Alaska for 65 years, making it the State’s most experienced car rental company. As
an AVIS system licensee, the AVIS Alaska operates 12 locations throughout Alaska and maintains one of the largest
vehicle fleets in the State.
“We are proud to work with such a well-established, professional, and environmentally conscience organization,” said
TurnOnGreen President Marcus Charuvastra. “As the demand for EVs grows, TurnOnGreen is poised to provide fleet
operators with access to affordable, durable, and dependable EV charging hardware and network services.”
TurnOnGreen offers scalable EV charging solutions for all types of commercial fleets. The Company’s ultra-fast charging
station products, charging management software, and network services allow fleet operators to charge multiple vehicles
rapidly and track energy use by the vehicle. TurnOnGreen charging systems maintain high standards in the market, are
Energy Star Certified, and are backed by an internationally recognized certificate of safety and performance.
“Working with AVIS Alaska to provide affordable EV charging solutions will help ease their transition to an electric fleet in
the future,” said Amos Kohn, the Company’s Chief Executive Officer. “The EV revolution is well underway, and our mission
is to support widespread EV adoption and utilization.”
As part of the Infrastructure Investment and Jobs Act, Alaska Energy Authority (“AEA”) will receive $7.8 million in federal
fiscal year 2022 and $11.1 million in federal fiscal year 2023 from the United States Department of Transportation Federal
Highway Administration under the National Electric Vehicle Infrastructure Formula Program. AEA anticipates receiving
approximately $52 million over the next five years through this program to build a network of DC fast chargers throughout
Alaska.
For more information on TurnOnGreen’s product line, please visit www.TurnOnGreen.com.
About Imperalis Holding Corp.
TurnOnGreen Expands EV Charging Footprint with New AVIS Car
Rental Locations in Alaska
TurnOnGreen designs and manufactures innovative, feature-rich, and top-quality power products for mission-critical
applications, lifesaving and sustaining applications spanning multiple sectors in the harshest environments. The diverse
markets we serve include defense and aerospace, medical and healthcare, industrial, telecommunications, and e-Mobility.
The Company brings decades of experience to every project, working with its clients to develop leading-edge products to
meet a wide range of needs. The Company’s headquarters are located in Milpitas, CA; www.TurnOnGreen.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements
generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and
include words such as “believes,” “plans,” “anticipates,” “projects,” “estimates,” “expects,” “intends,” “strategy,” “future,”
“opportunity,” “may,” “will,” “should,” “could,” “potential,” or similar expressions. Statements that are not historical facts are
forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to
risks and uncertainties. Forward-looking statements speak only as of the date they are made, and the Company
undertakes no obligation to update any of them publicly in light of new information or future events. Actual results could
differ materially from those contained in any forward-looking statement as a result of various factors. More information,
including potential risk factors, that could affect the Company’s business and financial results are included in the
Company’s filings with the U.S. Securities and Exchange Commission, including, but not limited to, the Company’s Forms
10-K, 10-Q and 8-K. All filings are available at www.sec.gov and on the Company’s website at www.TurnOnGreen.com.
Contacts
TurnOnGreen Investor Contact:
IR@TurnOnGreen.com or (877) 634-0982
1/3/23, 9:07 AM Electric Vehicle Infrastructure Plans Moving Forward in Northern Susitna Valley - KTNA 88.9 FM
https://ktna.org/2022/12/electric-vehicle-infrastructure-plans-moving-forward-in-northern-susitna-valley/1/2
Donate Listen
Community Radio for the Susitna Valley
Electric Vehicle Infrastructure Plans Moving Forward in Northern
Susitna Valley
December 14, 2022 | KTNA Staff
Multiple funding sources have paved the way for electric vehicle charging stations to be
installed in the Mat-Su Borough over the next five years.
The Alaska Energy Authority, or AEA, began its work in electric vehicle charging
infrastructure with the Volkswagen settlement funding. Alaska received more than eight
million dollars as part of that settlement and AEA developed the Beneficiary Mitigation Plan to
allocate the funding for various projects. Fifteen percent of that funding was set aside for
electric vehicle infrastructure, with about one million dedicated to install stations at host sites
from Homer to Fairbanks.
That initial funding required a 20 percent match from the host partner, however, the private
sector partners went above that to provide half the funding. Many more applications were
received than could be funded, but the Three Bears in Trapper Creek is one that will get an
EV station.
Beyond the Volkswagen funding, the state also will receive about $52 million to further EV
infrastructure. The AEA had already developed an initial plan and that was used to submit the
application for National Electric Vehicle Infrastructure, or NEVI, funding. The Alaska
Department of Transportation will take on the reporting and fund management while AEA is
0:000:00 / 3:10/ 3:10
1/3/23, 9:07 AM Electric Vehicle Infrastructure Plans Moving Forward in Northern Susitna Valley - KTNA 88.9 FM
https://ktna.org/2022/12/electric-vehicle-infrastructure-plans-moving-forward-in-northern-susitna-valley/2/2
taking the lead in getting partner host sites and managing installation.
Though the funding is secured, AEA still has several major issues to resolve before the
funding can be used. According to Executive Director of the AEA, Curtis Thayer, the NEVI
program requires that charging stations be located every 50 miles along the alternative fuel
corridor, but that may not be practical in remote areas. For example, the area between Denali
State Park and Cantwell is farther than the 50-mile requirement.
In addition, the funds must be used for DC Fast chargers. Audrey Alstrom, Director of
Alternative Energy and Energy Efficiency of the AEA, says that the government’s funding
requires that the chargers be a minimum of 150 kilowatts. That may be difficult in some areas
since the electrical service required to install chargers with that amount of power is not
available. Alstrom indicates that they will need to discuss the issues with the Department of
Energy.
The NEVI funding also is focused on investing in disadvantaged communities, which
accounts for much of the northern section of the Parks Highway alternative fuel corridor.
Each charging site must be located within one mile of the corridor. NEVI funds will cover 80
percent of the costs, with a 20 percent match from partner host sites. The costs include
upgrading the service, wiring, and other infrastructure needs. The overall investment will be
approximately one million dollars per location.
Thayer indicates that supply logistics are the biggest hurdle of the project, with a nine-month
lead time for parts. Only several years ago, there were concerns about battery life in cold
climates, distance between charging stations, and types of vehicles offered. Thayer says
“People are disappointed that charging stations aren’t in certain areas rather than not
wanting them.” And now that trucks and SUVs are coming to the market, EVs are more
competitive.
The NEVI-funded stations are expected to be installed over the next five years. The
Volkswagen-funded stations, including the Trapper Creek site, are expected to be installed as
soon as the equipment supply and site logistics are ironed out, likely sometime in 2023.
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813 W Northern Lights Blvd, Anchorage, AK 99503 Phone: (907) 771-3000 Fax: (907) 771-3044 Email: info@akenergyauthority.org
REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG
RGYAUTHORITY.ORG
PRESS RELEASE
Brandy M. Dixon
Communications Director
(907) 771-3078
FOR IMMEDIATE RELEASE
November 30, 2022
AEA Closes on $166 Million in Bond Financing for Transmission Upgrades and Battery Storage
(Anchorage) – The Alaska Energy Authority (AEA), the state’s energy office, has closed today on
its previously announced $166 million in bond financing to improve the efficiency and
deliverable capacity of power from the Bradley Lake Hydroelectric Project. The bonding by AEA,
in partnership with the Railbelt utilities, will come at no additional cost to ratepayers or added
burden on the State treasury.
Proceeds from the bond issuance will pay for transmission line upgrades and battery energy
storage systems that will reduce existing constraints on the Railbelt grid by increasing
transmission capacity to export Bradley Lake hydropower, while also allowing for the integration
of future renewable energy generation.
Bradley Lake, owned by AEA, is the largest hydroelectric plant in Alaska and generates the
lowest cost power in the state. More than 550,000 Alaskans, from Homer to Fairbanks, benefit
from the 120-megawatt facility, which generates up to 10 percent of the total annual electrical
energy consumed by Railbelt residents and businesses alike.
Bradley Lake is managed by the Bradley Lake Project Management Committee, which is
comprised of a representative from each of the five Railbelt utilities and AEA. Since Bradley
Lake’s completion, each utility has paid a portion of the annual debt service on the original
bonds. In 2021, the bonds were paid off and under the Power Sales Agreement the Railbelt
utilities are obligated to make annual payments until 2050. Such funds are now available to be
used for upgrades related to Bradley Lake.
The Railbelt utilities are comprised of Chugach Electric Association, Golden Valley Electric
Association, Homer Electric Association, Matanuska Electric Association, and the City of Seward.
The Alaska Energy Authority is a public corporation of the state. Its mission is to reduce the cost
of energy in Alaska.
###
1/3/23, 9:05 AM Alaska Energy Authority invests $4.9M in state’s largest solar farm - Alaska Public Media
https://alaskapublic.org/2022/11/28/alaska-energy-authority-invests-4-9-million-in-states-largest-solar-farm/1/2
Alaska Energy Authority invests $4.9M in state’s
largest solar farm
The Houston solar project under construction. (Courtesy of Alaska Energy Authority)
Residents of the Matanuska-Susitna Borough will get a lot more power from the sun next
summer. That’s when construction is expected to finish in Houston on what will be the
state’s largest solar farm, projected to produce enough energy to power 1,400 homes.
The state-owned Alaska Energy Authority announced on Oct. 27 that it would loan $4.9
million to the project.
Curtis Thayer is Executive Director at AEA and says renewables like solar help offset Railbelt
communities’ reliance on natural gas. Thayer says the state and the governor want to
reduce carbon emissions, but that won’t happen overnight.
“You’re never going to be able to do everything on wind, everything on solar, or hydro.
There needs to be a balance,” Thayer said. “So that balance is, as technology advances,
hopefully we can wean ourselves off of the carbon, but that’s going to be a bridge.”
Thayer says the added renewable power will not raise costs for consumers and will even
stabilize rates, especially in the long term. That’s possible because the price of solar has
fallen rapidly in recent years – dropping 80-90% over the last decade, according to Jenn
Miller, CEO of Renewable IPP.
Three years ago, Renewable IPP built what is currently the biggest solar farm in Alaska, a
1.2 megawatt array next to the Parks Highway in Willow. Now, Miller’s company is
By Michael Fanelli, Alaska Public Media - Anchorage -November 28, 2022
1/3/23, 9:05 AM Alaska Energy Authority invests $4.9M in state’s largest solar farm - Alaska Public Media
https://alaskapublic.org/2022/11/28/alaska-energy-authority-invests-4-9-million-in-states-largest-solar-farm/2/2
developing the Houston project just down the highway, and it’s set to be more than six
times bigger at 8.5 megawatts.
“The perception is, ‘Solar in Alaska? You must be crazy!’ But given the dramatic price
decrease in the technology as it’s deployed more and more around the world, that’s what
now makes it a viable technology here in this northern state,” Miller said.
Miller says the Houston array is well suited to Alaska’s climate because the panels are two-
sided, optimizing their winter production.
“And so February, March – we have a lot of sunny nice days during that time as well. We’ll
be able to capture extra production as it bounces off the snow and hits the back side of the
panel,” Miller said.
Alaska currently gets less than 1% of its power from solar, but Miller says that as the
technology continues to improve, that number could grow to 25% or higher.
The Houston project is on track to be completed by August 2023.
Michael Fanelli, Alaska Public Media - Anchorage
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11/25/22, 1:43 PM Here are the next steps for Alaska to make the most of the federal infrastructure law, one year in | Opinions | frontiersman.com
https://www.frontiersman.com/opinions/here-are-the-next-steps-for-alaska-to-make-the-most-of-the-federal-infrastructure/article_9e109a76-6c5d-11ed-…1/3
https://www.frontiersman.com/opinions/here-are-the-next-steps-for-alaska-to-make-the-most-of-the-federal-
infrastructure/article_9e109a76-6c5d-11ed-a478-7f2d699e9b05.html
Here are the next steps for Alaska to make the most of the
federal infrastructure law, one year in
By Nils Andreassen Spectrum
Nov 24, 2022
A year ago, Alaska celebrated the passage of the Infrastructure Investment and Jobs Act (IIJA),
what became upon signing by the President the Bipartisan Infrastructure Law. No matter the
name, Alaska’s state and local o cials knew just how important this long-awaited
announcement was for agencies and communities with incredible infrastructure needs. The
Alaska Municipal League had estimated in the last few years an infrastructure de cit of about
$30 billion. It felt like a locked door had been opened.
Much of what was in IIJA is an increase of funding to previously established programs, but
there’s also a lot of new programs. Federal agencies rushed to gure out implementation,
including adding in the priorities of the current administration and the criteria for applications.
A lot of the e ort of the last year, for the state, AML and other organizations, has been to
understand these priorities and programs, initiate a series of planning e orts and identify
competitive projects and applications. It remains a work in progress.
IIJA funding falls into ve broad categories – broadband, energy and power, transportation,
water and sewer, and resilience. Alaska’s capacity to coordinate a year ago was at very di erent
stages of preparation to respond to each of these.
The state has stood up an entirely new o ce dedicated to broadband, and has digital equity and
broadband deployment planning to initiate, conduct and nalize before fully realizing the
bene ts of the program. It has been and will continue to be an intense e ort, even as federal
agencies like the National Telecommunications and Information Administration and U.S.
Department of Agriculture have hosted competitive application processes that Alaska has
bene ted from. AML is part of the planning processes the state has begun, including visiting
communities to conduct digital equity listening sessions. Separately, there will be a statewide
cybersecurity plan developed for local government projects to be funded through.
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11/25/22, 1:43 PM Here are the next steps for Alaska to make the most of the federal infrastructure law, one year in | Opinions | frontiersman.com
https://www.frontiersman.com/opinions/here-are-the-next-steps-for-alaska-to-make-the-most-of-the-federal-infrastructure/article_9e109a76-6c5d-11ed-…2/3
A lot of the energy or power funding is for very speci c purposes, and maybe not the panacea
that Alaskans would hope for. That said, an emphasis on grid resilience is promising, with
funding to the state, tribes, and Alaska Native corporations. The U.S. Department of Energy has
spent a lot of the last year collecting information in order to begin its more competitive grant
processes. An AML-funded grant application to examine community-level energy projects was
successful, bringing $3.5 million to the project that will take place in Northwest and Southeast
Alaska. At the same time, the Alaska Energy Authority will be undertaking a number of energy
and electric-vehicle planning activities in support of upcoming opportunities.
Transportation had the most amount of funding allocated to it, with formula funding bolstering
the Alaska Department of Transportation and Public Facilities (including for community
transportation projects). Competitive applications have almost overwhelmed the capacity to
respond. A new partnership between AML and DOT&PF has meant collaborative applications
submitted for a total of about $700 million, and $30 million already awarded. We can’t wait to see
the di erence these make in communities and how this partnership might lead to greater
regional collaboration and coordination between local governments and the state.
Between the Alaska Native Tribal Health Consortium and the state Department of Environmental
Conservation, we’re anticipating that Alaska may nally be able to address clean water and
sanitation in its unserved and underserved communities. That’s a $2 billion list that should have
funding available to work from. The state’s revolving loan funds, too, have been expanded and a
new one established, with many of the loans containing provisions to be forgiven. It remains to
be seen how the state will address things like a ordability or nancial management of those
systems, working with communities to bolster both.
Finally, resilience is a broad topic that covers climate change, hazard mitigation, community
relocation, and environmental remediation. The Environmental Protection Agency and the
Department of the Interior are actively implementing prior and new programs to support funding
for tribal and local governments on this front. A new report from the Alaska Division of
Community and Regional A airs and ANTHC about “Unmet Needs” may be a useful summary of
some of the issues involved, and the work le to do. A lot of the federal programs require
planning activities – wild re, coastal resilience, climate action and hazard mitigation plans,
among others – that result in projects identi ed for future implementation. There’s a lot of e ort
required to augment the capacity of communities to go through this process.
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11/25/22, 1:43 PM Here are the next steps for Alaska to make the most of the federal infrastructure law, one year in | Opinions | frontiersman.com
https://www.frontiersman.com/opinions/here-are-the-next-steps-for-alaska-to-make-the-most-of-the-federal-infrastructure/article_9e109a76-6c5d-11ed-…3/3
That all sounds like a lot, and it is. I fear we’ve only glimpsed a fraction of the work still to do
and the e ort to get this far has already stretched agencies and organizations thin. To be
successful in planning e orts and to respond e ectively to grant opportunities will require
increased capacity at the state and local level, greater coordination, and the ability to submit
competitive applications in response to opportunities. As a state – all the agencies, tribes,
organizations and others working on this – the scale of it all remains overwhelming and we’ll
still have work to do in the coming year to be strategic, coordinated and successful.
Nils Andreassen is the executive director of the Alaska Municipal League, which works to
strengthen Alaska’s local governments. He lives in Juneau.
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Editor’s note: In the Hilcorp anniver-
sary special, shortened versions of
Petroleum News’ stories will appear,
highlighting some of the independent’s
most memorable events.
By PETROLEUM NEWS
Jan. 8, 2012, issue
Some of Cook Inlet’s oldest oil and gas
facilities now have a new owner, with
Chevron subsidiary Union Oil Company
of California, or Unocal, giving way to
Houston-based independent Hilcorp,
whose Hilcorp Alaska LLC subsidiary
assumed operation of Union’s Cook Inlet
assets Jan. 1.
Hilcorp said it “welcomes over 230
new Alaskan employees to the company
and recognizes the
skills and experience
they bring.”
Hilcorp Energy
Co., founded in
1989, is one of the
largest privately
held independent oil
and natural gas
exploration and pro-
duction companies
in the United States,
with 700 employees in the Lower 48.
Hilcorp named John Barnes as senior
vice president for its Hilcorp Alaska sub-
sidiary. Hilcorp said Barnes, formerly
with Marathon in Alaska and most recent-
ly senior vice president of operations and
maintenance services for CH2MHill,
brings both producer and contractor expe-
rience to the position.
Plans for Cook Inlet
Assets that Hilcorp acquired include
Union Oil contracts and interests in the
Swanson River, Granite Point, Middle
Ground Shoals, Trading Bay and
MacArthur River fields; interests in 10
offshore platforms; interests in onshore
gas fields including the Ninilchik Unit
and the Beluga River Unit; and two gas
storage facilities.
When the sale was announced in July
production from the assets was listed as
some 3,900 barrels of oil and 85 million
cubic feet of natural gas per day.
As of November 2011, production data
from the Alaska Oil and Gas
Conservation Commission, Granite Point,
McArthur River and Middle Ground
Shoals — among the interests acquired by
Hilcorp Alaska — are the only fields in
Cook Inlet with average production of
more than 1,000 barrels per day.
The sale also includes interests in the
Cook Inlet Pipe Line Co. and Kenai
Kachemak Pipeline LLC.
While Hilcorp did not discuss specific
plans in a Jan. 4 statement, it made some
general information available in 2011
regulatory filings.
In a narrative statement about
Hilcorp’s proposed acquisition filed with
the Regulatory Commission of Alaska in
August as part of the application for
transfer of pipeline interests, Hilcorp said
it has identified the Cook Inlet basin as a
region holding significant potential for
continued oil and gas exploration and
development opportunities. Consistent
with its overall corporate mission, upon
completion of the acquisition Hilcorp
intends to pursue a maintenance and
development program at existing fields,
as well as a comprehensive exploration
program.” l
PETROLEUM NEWS • WEEK OF NOVEMBER 6, 2022 5
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l SNEAK PREVIEW
Sneak peek of Hilcorp
anniversary special
Inlet deal closes: Hilcorp Alaska takes over in Cook Inlet for
Chevron subsidiary Union Oil Company of California, or Unocal
CEO’s message
In a CEO message on Hilcorp
Energy’s website near the time of
Hilcorp Alaska’s takeover of
Chevron subsidiary Union Oil
Company of California’s Cook Inlet
assets, Jeff Hildebrand, the compa-
ny’s founder, president and CEO,
cites “world-class employees, lega-
cy assets and a strong balance sheet”
as the reasons for the company’s
success.
“We focus on what we do well,”
Hildebrand said, listing the compa-
ny’s core competencies as engineer-
ing and geological expertise and
operational excellence.
Hilcorp’s mission? “To efficient-
ly develop energy that would other-
wise be lost while providing an
enjoyable and challenging work
environment where long-term per-
sonal wealth can be created,”
Hildebrand said.
—PETROLEUM NEWS
JOHN BARNES
“Consistent with its overall
corporate mission, upon completion
of the acquisition Hilcorp intends
to pursue a maintenance and
development program at existing
fields, as well as a comprehensive
exploration program.”
—Hilcorp told RCA
GOVERNMENT
AOGCC reschedules Coyote EOR hearing
The Alaska Oil and Gas Conservation Commission has rescheduled a hearing
on a request from ConocoPhillips Alaska to approve a pilot enhanced oil recovery
project for the Coyote interval in the Kuparuk River unit.
Previously scheduled for Nov. 8, the public hearing is now scheduled for Nov.
29. It will be at 10 a.m. in the commission’s Anchorage offices with call-in avail-
able at 907-202-7104 conference ID no. 592 156 542#.
ConocoPhillips drilled the Coyote prospect as a sidetrack from an existing 3S
drill site well at Kuparuk at the end of 2021 after it was identified from a review
of 2015 3D seismic.
Two follow-up wells are planned in the fourth quarter of 2021 to “enable us to
gather other critical data to help us better plan for a future development of this
reservoir from the 3S pad,” the company said in an Aug. 11 application to
AOGCC.
Since the feasibility of injection into the reservoir has not been established this
is considered a pilot project to help determine the commercial viability of using
EOR to develop Coyote, ConocoPhillips said.
The Coyote development design is expected to be a line-drive water alternating
gas flood with horizontal producers and injectors.
The company said if it is established that Coyote is commercially viable, it
would then apply to AOGCC for pool rules and an area injection order.
—KRISTEN NELSON
AEA OKs loan for Houston solar project
The board of the Alaska Energy Authority has approved a $4.9 million loan to
Energy 49 LLC to assist with the funding of the construction of an 8.5-megawatt solar
farm at Houston. Power from the 45-acre facility, the largest solar farm in Alaska, will
be supplied to Matanuska Electric Association. Energy 49 is developing the project.
The facility will provide an amount of energy
equivalent to the energy needs of approximately
1,400 homes, AEA says.
Energy 49 had been owned by Renewable IPP
LLC, the owner and operator of an existing solar
farm in Willow. However, in July ownership of
Energy 49 was transferred to Glacier Bay Solar
LLC, a wholly owned subsidiary of clean energy
investment company CleanCapital. CleanCapital
has agreed to provide the balance of the funding for the $9.7 million project.
Renewable IPP is under contract with CleanCapital for construction, operation and
maintenance of the solar farm. Construction began in August 2022 and is expected to
be completed in the summer of 2023. The AEA loan comes from the agency’s Power
Project Fund, or PPF.
“AEA is excited to work with the Renewable IPP team again to provide them with
the additional capital needed to make this project a reality,” said AEA Executive
Director Curtis Thayer. “The PPF loan program is an attractive, patient capital funding
mechanism that can be leveraged to diversify Alaska’s energy sources and introduce
additional renewable energy on the Railbelt.”
“We’re thrilled by the state’s instrumental support to bring cost-competitive renew-
able energy to Alaskans,” said Renewable IPP CEO Jenn Miller. “With this announce-
ment, the state is taking real steps to diversify our energy supply and spur economic
growth.”
—ALAN BAILEY
ALTERNATIVE ENERGY
Power from the 45-acre
facility, the largest solar
farm in Alaska, will be
supplied to Matanuska
Electric Association.
Sneak peek of Hilcorp anniversary
special: celebrating 10 years in state
page
5
l FINANCE & ECONOMY
l GOVERNMENT
l EXPLORATION & PRODUCTION
see GAS NEEDS page 7
State’s winter Cook Inlet sale
online bidding to open Dec. 12
Bidding will open Dec. 12 for the state’s
winter Cook Inlet areawide sale, the Alaska
Department of Natural Resources said Oct.
28. Bid results will be published Dec. 30.
The Cook Inlet areawide is regularly
held in the spring, as it was this year, in
conjunction with the Alaska Peninsula
areawide.
“We are offering this special State Cook
Inlet lease sale at the end of the year to
coincide with the federal sale for the bene-
fit of potential bidders and in accordance with our constitutional
duties,” DNR Deputy Commission John Crowther said in DNR’s
see AEA BONDING page 9
AEA board approves $175M in
transmission upgrades bonding
The Alaska Energy Authority said that on Oct. 26 that its
board unanimously approved an estimated $175 million in bond
financing to improve efficiency and capacity of power from the
Bradley Lake Hydroelectric project. AEA said the bonding, in
partnership with the Railbelt utilities, will be at no additional cost
to ratepayers. It will also not be a burden on the state treasury. The
bond transaction is expected to close before Dec. 2.
Proceeds of the bonds will be used solely for transmission line
upgrades and battery energy storage systems. These projects will
reduce constraints on the Railbelt grid by improving transmission
capacity from Bradley Lake on the Kenai Peninsula. They will
also allow integration of additional sources of renewable energy.
AEA said funding for the projects comes from excess payments
Latest from Gil Mull group:
interpretive panels almost done
“We are very close to finishing up the
interpretive panels; they look awesome!”
Tom Homza wrote in an Oct. 31 email to a
loosely organized group of 80-some
friends, admirers and colleagues of the late
renowned Alaska geologist Gil Mull.
The group’s first accomplishment was
the June placement of a remembrance
plaque in front of the Arctic Interagency
Visitor Center in Coldfoot, on the southern
slopes of the Brooks Range.
The plaque, which contained a brief bio of Gil, was placed on
see MULL GROUP page 9
see INLET SALE page 8
CINGSA ready for Southcentral
winter gas needs; record storage
Cook Inlet Natural Gas Storage Alaska hit a significant
milestone this year, with a record high balance of stored gas of
10.7 billion cubic feet on Sept. 11, Matthew Federle, CINGSA
director of storage operations, told a public meeting of the
Regulatory Commission of Alaska on Oct. 26. The previous
record was 10.3 billion cubic feet, Federle said. Federle pri-
marily attributed the record balance to a relative high volume
of stored gas at the end of last winter. As is typical for
CINGSA, low utility gas demand in the summer relative to the
winter results in very little gas being drawn from storage dur-
ing the summer months, while customers store excess gas pro-
duced during the summer for winter use. The relatively high
inventory presumably means that CINGSA is well prepared
Vol. 27, No. 45 • www.PetroleumNews.com A weekly oil & gas newspaper based in Anchorage, Alaska Week of November 6, 2022 • $2.50
GIL MULL
OPEC: Demand to grow
Bullish OPEC; robust US crude draws; falling dollar quell demand fears
By STEVE SUTHERLIN
Petroleum News
Alaska North Slope crude leapt $1.77 higher Nov.
2 to close at $96.11 per barrel, while West Texas
Intermediate jumped $1.63 to close at $90 and Brent
picked up $1.51 to close at $96.16.
The price advances come in the wake of a revised
outlook by the Organization of the Petroleum
Exporting Countries released Oct. 31 that raised esti-
mates of global oil demand in the medium and long
term.
Prices were further supported by U.S. Energy
Information Administration data released Nov. 2
showing a significant drawdown of U.S. oil reserves.
ANS rose Nov. 1, adding $1.36 to close at $94.35.
WTI leapt $1.84 to close at $88.37 but Brent edged
18 cents lower to close at $94.65.
The U.S. dollar fell against other currencies Nov.
1, which added strength to oil prices.
Prices were also boosted by a Twitter entry late
Oct. 31 by noted Chinese economist Hao Hong that
said a “reopening committee” formed and led by
Armstrong weighs in
ConocoPhillips Alaska’s Bear 1 wildcat appears on trend with Stirrup discovery
By KAY CASHMAN
Petroleum News
In studying available maps and a G&G
team’s comments, ConocoPhillips
Alaska’s Bear 1 exploration well planned
for this winter appears to be on trend with
Oil Search (Alaska)’s 2020 Stirrup dis-
covery.
Bear 1 will be approximately 12 miles
south of Stirrup 1, which had one of the
highest flow rates of any Nanushuk single-stage stim-
ulation of a vertical well on the North Slope.
Stirrup 1 successfully penetrated the Nanushuk
reservoir and encountered an oil column with net pay
of 75 feet. The wellbore was cored, perforated
through a single-stage simulation and shut-
in for six days to enable pressure build-up
prior to testing in which Stirrup flowed at a
stabilized rate of 3,520 barrels of oil per
day,
As previously reported, ConocoPhillips
Alaska President Erec Isaacson described
the company’s Bear 1 well as a Brookian
Topset play.
“A Brookian Topset is exactly what we
drilled at Pikka, Horseshoe, Stirrup,
Mitquq and … CP drilled at Willow. CP knows what
they are doing. I give the Bear well a high chance of
success based on what we know,” Bill Armstrong
Test well flaring issue
Great Bear Pantheon has applied to flare long-term as part of production test
By KRISTEN NELSON
Petroleum News
Great Bear Pantheon needs permission for flar-
ing during a long-term test of its Alkaid 2
well to determine if the accumulation will be eco-
nomic to produce and what scale of production
facilities are needed.
The company has said the production test could
last up to nine months.
The Alaska Oil and Gas Conservation
Commission regulates flaring and it held a hearing
Oct. 27 on the request.
AOGCC can grant permission to flare during
production testing but said it had never been asked
to do so for more than a few weeks. On that basis
the commission scheduled the hearing and asked
for public comment.
Pat Galvin, GBP’s chief commercial officer and
general counsel, and Michael Duncan, chief oper-
ating officer, described the drilling operations at
Alkaid 2 and the reasons for the nine-month flaring
request.
see OIL PRICES page 10
see BEAR 1 page 11
see WELL FLARING page 12
JOHN CROWTHER
To meet future energy demand, the world
will need to annually add an average 2.7
million barrels of oil equivalent per day
in the period to 2045, OPEC said in its
2022 World Oil Outlook released Oct. 31.
BILL ARMSTRONG
He said an early assessment could miss
the difference between a well with an
estimated ultimate recovery of 1 million
barrels and a well with an EUR of 2
million barrels.
PETROLEUM NEWS • WEEK OF NOVEMBER 6, 2022 9
ADVERTISER PAGE AD APPEARS ADVERTISER PAGE AD APPEARS ADVERTISER PAGE AD APPEARS
Companies involved in Alaska’s oil and gas industry
Advertiser Index
A
ABR, Inc.
Acuren . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
AES Electric Supply, Inc.
Ahtna, Inc.
Airgas, an Air Liquide Company
Airport Equipment Rentals
Alaska Dreams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Alaska Frontier Constructors (AFC)
Alaska Fuel Services
Alaska Marine Lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Alaska Materials
Alaska Railroad
Alaska Rubber Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Alaska Steel Co.
Alaska Textiles
Alaska West Express . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Arctic Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
ARCTOS Alaska, Division of NORTECH
Armstrong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
ASTAC (Arctic Slope Telephone Assn. Coop, Inc)
AT&T
Automated Laundry Systems & Supply
B-F
Bombay Deluxe Restaurant . . . . . . . . . . . . . . . . . . . . . . . . .10
Brooks Range Supply
C&R Pipe & Steel, Inc.
Calista Corp.
ChampionX
Coffman Engineers
Colville Inc.
Computing Alternatives
CONAM Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Construction Machinery Industrial (CMI)
Cook Inlet Tug & Barge
Cruz Construction
Denali Industrial Supply, Inc.
Denali Universal Services (DUS) . . . . . . . . . . . . . . . . . . . . . .4
Doyon Anvil
Doyon Associated
Doyon Drilling, Inc.
Doyon, Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
EEIS Consulting Engineers, Inc.
EXP Energy Services
F. R. Bell & Associates, Inc.
Flowline Alaska
Frost Engineering, a division of PumpTech LLC
G-M
GCI
GeoLog
Greer Tank & Welding
Guess & Rudd, PC
Inspirations
Judy Patrick Photography . . . . . . . . . . . . . . . . . . . . . . . . . .11
Little Red Services, Inc. (LRS)
Lounsbury & Associates
Lynden Air Cargo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Lynden Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Lynden Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Lynden Oilfield Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Lynden Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Maritime Helicopters
Matson
N-P
Nabors Alaska Drilling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
NANA Worley
Nature Conservancy, The
NEI Fluid Technology
Nordic Calista
North Slope Borough
North Slope Telecom
Northern Air Cargo
Northern Solutions
Oil Search
Owl Ridge Natural Resource Consultants
Petroleum Equipment & Services, Inc.
PND Engineers, Inc.
PRA (Petrotechnical Resources of Alaska)
Price Gregory International Q-Z
Resource Development Council . . . . . . . . . . . . . . . . . . . . .12
SeaTac Marine Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Strategic Action Associates
Surepoint Technologies Group US
Tanks-A-Lot
TorcSill
Udelhoven Oilfield System Services Inc.
US Ecology Alaska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Weston Solutions
All of the companies listed above advertise on a regular basis
with Petroleum News
made by the five Railbelt utilities after the Bradley Lake
bonds were paid off.
Projects planned
AEA listed four projects:
•Upgrading the transmission line between Bradley Lake
and the Soldotna substation.
•Upgrading the transmission line between the Soldotna
substation and the Sterling substation.
•Upgrading the transmission line between the Sterling
substation and the Quartz Creek substation.
•Providing battery storage systems for stabilization of
the grid.
AEA said the Railbelt is the interconnected electric grid
stretching some 700 miles from Fairbanks through
Anchorage to the Kenai Peninsula, an area where some
70% of Alaska’s population is served by the electric system.
There are four member-owned electric cooperatives and
one city utility selling power to Railbelt consumers.
AEA said Railbelt energy systems went into service
more than 40 years ago and the systems have seen signifi-
cant change since then. Loads have increased, transmission
assets have aged and greenhouse gases have become an
increasingly important factor, AEA said.
Utilities have developed cost-saving power sales, which
demand more of the system. There will soon be regional
integrated resource planning which will increase benefits of
sharing power throughout the region.
Bradley Lake
AEA owns Bradley Lake, the largest hydroelectric plant
in Alaska and an important Railbelt generating plant.
Bradley Lake, a 120-megawatt facility, is some 27 miles
northeast of Homer. It generates 10% of the electrical ener-
gy used annually by Railbelt utilities, providing some of the
lowest cost power in the state to some 550,000 Alaskans
from Homer to Fairbanks, AEA said.
Bradley Lake is managed by the Bradley Lake Project
Management Committee, which has a representative from
each of the five Railbelt utilities and AEA.
Each of the five utilities has paid a portion of the annual
debt service on the original bond since Bradley Lake was
completed, bonds which were paid off in 2021. AEA said
that under the power sales agreement, Railbelt utilities con-
tinue to make annual payments until 2050, with the funds
now available for upgrades related to Bradley Lake. AEA
said the Alaska Department of Law determined that the pro-
posed transmission upgrades are required project work that
benefits Bradley Lake and Railbelt ratepayers.
Railbelt utilities are Chugach Electric Association,
Golden Valley Electric Association, Homer Electric
Association, Matanuska Electric Association and the City
of Seward.
Modernization
“Today’s announcement is a leap forward in the state’s
effort to modernize and diversity the Railbelt energy port-
folio,” said Alaska Gov. Mike Dunleavy. “For consumers
and businesses, the investment will lead to a more reliable
power grid, carrying more electricity from a wider variety
of sustainable energy sources like solar, wind, hydro, tidal,
and hydrogen power. A more reliable grid will power
growth in Alaska’s economy and make us more energy
independent.”
AEA Board Chair Dana Pruhs said AEA’s board “has
become increasingly focused on grid resiliency since the
Swan Like Fire damaged 39 miles of transmission lines
between Sterling and Cooper Land on the Kenai
Peninsula.” It took four months at an estimated cost of $12
million to Railbelt utility ratepayers to bring the line back
into service, he said. “Upgrading this line represents one of
the largest investments since Bradley Lake was constructed
and reinforces AEA’s commitment to ensuring access to
safe, reliable, and affordable energy for all Alaskans,” Pruhs
said.
AEA Executive Director Curtis Thayer said the gover-
nor “charged AEA and the utilities to develop a plan to
increase the reliability and resiliency of the Railbelt corri-
dor. With this bonding approval, these transmission
upgrades and battery storage can now be realized and ben-
efit consumers through cost sharing, better cost alignment,
increased reliability, and allow for additional new renew-
ables to come online.”
Chugach Electric CEO Arthur Miller said: “The projects
that this funding supports will provide decades of benefit to
Alaskans throughout the Railbelt. Improvements in trans-
mission and energy storage infrastructure increases reliabil-
ity and resiliency of the grid, creates operational efficien-
cies, supports the advancement of renewable generation,
and allows us to continue providing affordable, reliable
power to our members.”
Golden Valley Electric Association CEO John Burns
said: “The electricity produced from Bradley Lake is low
cost, carbon free energy that benefits all Railbelt members.
For Golden Valley Electric Association members, and all
Railbelt communities, access to reliable, affordable energy
is essential for economic viability.” He said the project
work “will assist in ensuring that the benefits of the Bradley
Lake Hydroelectric project continue to be received well
into the future.”
Homer Electric Association General Manager Brad
Janorschke said HEA “continues to work with the state and
the Railbelt utilities to secure funds necessary to modernize
Alaska’s aging transmission system and expand battery
storage. Without the incorporation of batteries into trans-
mission, we will quickly get to a point where we will not be
able to meet our clean energy generation goals without new
sources of system regulation. These upgrades are necessary
to diversity our generation assets.”
Matanuska Electric Association CEO Tony Izzo said,
“MEA joins the other Railbelt utilities in a shared vision to
transport our electric system into a robust and resilient grid
that fosters energy security and a diverse energy mix.” He
said MEA appreciates the leadership and commitment of
Gov. Dunleavy and AEA “in supporting these critical sys-
tem upgrades as an investment in Alaska’s future.”
—KRISTEN NELSON
continued from page 1
AEA BONDING
an existing wall in the rock garden that contained two siz-
able Kanayut formation boulders, a particularly beautiful
rose-colored chert pebble conglomerate that records the
erosion of an ancient mountain belt.
Another of the group’s projects was the Charles Gilbert
“Gil” Mull Field Camp Scholarship; a project spearheaded
by Geosciences Professor Michael Whalen of the
University of Alaska Fairbanks.
The group’s goal, which they exceeded, was to build a
minimum endowment of $25,000, that would provide a
UAF scholarship in perpetuity.
Another project was a series of interpretive panels to be
placed at key locations in the Brooks Range.
That effort morphed to include a broader “Pioneers of
AK geology” series (not just Gil) of interpretive panels —
the topic of Homza’s Oct. 31 email.
Homza also asked members to look at any of Gil’s
emails that they had kept, for a John McPhee quote that Gil
included at the end of all his emails.
The quote was: “Geologists inhabit scenes that no one
ever saw, scenes of global sweep, gone and gone again,
including seas, mountains, rivers, forests, and archipelagos
of aching beauty, rising in volcanic violence to settle down
quietly and forever disappear — almost disappear.”
If you’d like to receive the group’s monthly email con-
tact Homza at Thomas.Homza@shell.com.
—KAY CASHMAN
continued from page 1
MULL GROUP
Liquid Energy: Using Alaska’s waterways to provide power
https://digital.akbizmag.com/issue/november-2022/liquid-energy/ 1/7
Water lit the muddy streets of Juneau City, as the gold mining town was
known in 1893. That was the year Alaska Electric Light & Power (AEL&P)
started providing service from a simple water wheel. Two decades later, the
utility developed the Annex Creek, Salmon Creek, and Gold Creek hydropower
plants, and they remain in service, generating 3.6 MW, 6.7 MW, and 1.6 MW,
respectively.
Juneau is awash in hydropower, especially since the federal government build
the Snettisham project in 1973. Water tapped from two lakes 28 miles
southeast of Juneau drives 70 percent of Juneau’s electricity, with a peak
output of 78 MW. Another 20 percent comes from the Lake Dorothy facility on
the east bank of Taku Inlet, generating up to 14 MW from the flow of water
down a 5-foot diameter penstock. And that’s just Phase 1; AEL&P has plans to
double the output from Lake Dorothy, as demand warrants.
“Under the right circumstances, hydropower is a cost-effective and reliable
source of carbon-free electricity,” says Debbie Driscoll, AEL&P vice president
and director of consumer affairs.
Liquid Energy: Using Alaska’s waterways to provide power
https://digital.akbizmag.com/issue/november-2022/liquid-energy/ 2/7
AEL&P isn’t 100 percent carbon free; Driscoll notes that the utility burns diesel
for standby generators during planned maintenance and short outages.
However, AEL&P is unique in Alaska having such a large portion of its
generation portfolio come from hydropower. Most Alaska utilities rely on a
combination of natural gas, petroleum, and coal, plus a smattering of
renewables in addition to hydropower. Juneau stands as a benchmark for
others to measure up to.
Powering the Railbelt
A single powerhouse supplies 10 percent of the electricity for customers from
the Kenai Peninsula to Fairbanks. The Bradley Lake Hydroelectric Project north
of Homer, completed in 1991, is the largest hydroelectric facility in the state.
The five Railbelt electric utilities—Chugach Electric Association, Golden Valley
Electric Association, Homer Electric Association, Matanuska Electric
Association, and Seward Electric System—share its 120 MW output. From 1995
to 2020, the Bradley Lake facility averaged 392,000 MWh annually at $0.04 per
kWh, providing some of the lowest cost power to more than 550,000 Alaskans.
The Bradley Lake Hydroelectric Project took forty years of planning, fieldwork,
licensing, construction, and agreements before generating any power. The US
Army Corps of Engineers first studied Bradley Lake’s potential in 1955, but it
wasn’t until 1962 that Congress authorized the project. Another twenty years
passed before the Alaska Energy Authority (AEA) assumed responsibility for
the project and completed the final steps, including the Power Sales
Agreement between AEA and the Railbelt utilities and acquiring a mix of
legislative appropriations and AEA revenue bonds. In 2020, AEA completed an
expansion by diverting glacial water from West Fork Upper Battle Creek into
Bradley Lake Hydroelectric Project, increasing energy by 10 percent from its
initial numbers in 1991.
Now AEA, in partnership with the Railbelt utilities, is pursuing another
diversion project to further increase the power output at Bradley Lake by
almost 50 percent. The Dixon Diversion would divert water from the East Fork
of the Martin River into the Bradley Lake reservoir. According to a press
Liquid Energy: Using Alaska’s waterways to provide power
https://digital.akbizmag.com/issue/november-2022/liquid-energy/ 3/7
release from Governor Mike Dunleavy, the Dixon Diversion Project could
power an additional equivalent of up to 30,000 homes. At this time, AEA
estimates five years of studies and permitting followed by five years of
construction before the Dixon Diversion generates power.
Curtis Thayer, AEA executive director, says other factors affect the amount of
power the Bradley Lake facility can supply to the Railbelt. For example,
transmission lines from the plant into Anchorage need upgrades before they
can handle an additional load. AEA owns most of the transmission lines along
the Railbelt, with smaller sections owned by partnering utilities. Together
these utilities developed a plan to conduct needed upgrades using funds from
the Power Sales Agreement negotiated in 1982. That’s because AEA retired its
bonds early, but its utility partners have budgeted to finance them further into
the future. That leaves a surplus to pay for transmission upgrades.
Liquid Energy: Using Alaska’s waterways to provide power
https://digital.akbizmag.com/issue/november-2022/liquid-energy/ 4/7
“Even though the plant is paid off, there is still a commitment by the Railbelt
utilities to continue debt payments until 2050,” Thayer explains. “There is a
stipulation in the Power Sales Agreement that AEA doesn’t need legislative
approval to appropriate these funds as long as it goes to the betterment of
Bradley Lake and participating utilities.”
This provision means costs for upgrades won’t flow down to utility ratepayers
or place an additional burden on the state treasury. Upgrading transmission
lines from Fairbanks to Homer is estimated to cost around $200 million.
Microgrid Solutions
Upgrading the Railbelt grid to tap into Bradley Lake’s hydropower is fine for
urban areas, but remote communities are entirely disconnected from these
energy grids. According to the Alaska State Energy Profile and Energy
Estimates, many rural communities primarily rely on diesel electric generators
for power, which means higher costs to the ratepayer and increased
environmental concerns. Without access to expanded infrastructure, rural
Alaska is seeking alternative energy solutions on a much smaller scale.
For Igiugig, that solution came from a partnership with Ocean Renewable
Power Company (ORPC), a global renewable energy company with offices in
Anchorage. The village, situated where the Kvichak River enters Lake Iliamna,
had for a long time imported expensive diesel fuel for power generation. In
2014 when ORPC installed its first hydrokinetic project, known as the RivGen
Power System, Igiugig saw the possibility of expanding its energy options. As
ORPC further developed the technology, advanced versions of the power
system proved capable of providing one-third of the electricity needs for the
village’s seventy Yup’ik Eskimos, Aleuts, and Athabascans.
ORPC’s Alaska Director of Development Merrick Jackinsky says that the RivGen
Power System is unique because it doesn’t require large-scale construction or
permanent infrastructure to produce electricity. RivGen differs from traditional
hydropower plants, which rely on the elevation difference between the intake
and outlet. Hydrokinetic devices like RivGen are placed directly in a stream of
flowing water, extracting energy with turbines. The RivGen system looks like a
Liquid Energy: Using Alaska’s waterways to provide power
https://digital.akbizmag.com/issue/november-2022/liquid-energy/ 5/7
small watercraft with its generator, consisting of two turbines, connected
through a single driveline to an underwater generator in the center. The
generator sits on a pontoon that is self-deploying, easy to install, and easy to
retrieve for maintenance or seasonal removal.
Each device has a rated capacity of 25 kW. ORPC ships components to a
staging area near a project site for final assembly. Once assembled, the RivGen
device is towed to the project site and anchored there. The device is held in
the river or tidal current by the anchor lines and then ballasted into position
on the riverbed. An underwater power and data cable runs along the river
bottom to an onshore interconnection point.
“It’s a low vertical profile system,” says Jackinsky. “There aren’t any dams or
reservoirs creating free-flowing water. It’s a small system with flexible
applications.”
Liquid Energy: Using Alaska’s waterways to provide power
https://digital.akbizmag.com/issue/november-2022/liquid-energy/ 6/7
Lunar Power
Recently, ORPC received a grant to install a second unit in Igiugig, and
Jackinsky estimates the two units together will reduce the village’s diesel
usage anywhere from 60 percent to 90 percent. The success of this project has
led to further partnerships within the state. ORPC recently acquired a federal
permit to install a 5 MW tidal energy pilot project near Nikiski, with plans to
develop a 100 MW commercial-scale plant. Homer Electric Association, which
is partnering with ORPC for this project, is currently installing a storage battery
system to save surplus energy from renewables for later transmission to the
power grid. Jackinsky says ORPC is also conducting initial studies at False Pass
in the Aleutian Chain for a similar project to harness ocean currents.
ORPC also announced a tidal generation project in Port Mackenzie that will
produce the 80 kW of power needed for a cathodic protection system that
keeps the dock from corroding into Cook Inlet. Unlike the freshwater project
in Igiugig, the system will require further adaptation for operation in salt
water. If successful, it will be the first saltwater tidal generation system in
Alaska.
Liquid Energy: Using Alaska’s waterways to provide power
https://digital.akbizmag.com/issue/november-2022/liquid-energy/ 7/7
“Hydrokinetic power is considered a base load resource,” says Jackinsky. “All
you have to do is grab a tide book, and you will know the predicted time and
amplitude. With lunar power, you can set a watch.”
Though ORPC systems have a low vertical profile and removable
infrastructure, Jackinsky says the company is still required to conduct
environmental impact studies in areas where wildlife is prevalent. The most
extensive monitoring areas are where endangered beluga whales live and in
locations with salmon runs. To date, no significant impacts have been found.
Hydrokinetic technology opens new possibilities for Alaska to harness its
liquid energy, from free-flowing rivers to the wine-dark sea. They have the
advantage of being deployable in more locations than the very particular
topography that traditional hydropower requires. According to AEA, there are
fifty operating utility-scale hydroelectric projects in Alaska, supplying 27
percent of Alaska’s energy profile. Thayer notes that Alaska’s fraction of
electricity from hydro is 25 percent more than the national rate. The vastness
of Alaska’s coastal miles and waterways gives the state a significant renewable
energy advantage over the Lower 48, says Thayer, and communities will
benefit from continued investments in hydropower and related infrastructure.
813 West Northern Lights Boulevard, Anchorage, Alaska 99503 T 907.771.3000 Toll Free 888.300.8534 F 907.771.3044
REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG
RGYAUTHORITY.ORG
PRESS RELEASE
Brandy M. Dixon
Communications Director
(907) 771-3078
FOR IMMEDIATE RELEASE
October 27, 2022
AEA Board Approves $4.9 Million Loan for Alaska’s Largest Solar Project
(Anchorage) — The Alaska Energy Authority (AEA) Board of Directors has approved a $4.9
million Power Project Fund (PPF) loan to Energy 49 LLC to convert 45 acres in Houston, Alaska
into an 8.5 megawatt (MW)-rated photovoltaic (PV) solar array making it the largest utility-scale
PV solar installation in the state.
The project, developed by Energy 49 LLC, a former subsidiary of Renewable IPP, LLC, the owner
and operator of the Willow solar farm, will be an 8.5 MW ballasted bi-facial PV solar array
providing an amount of energy equivalent to that needed to power approximately 1,400 homes.
The purpose of the project is to expand renewable energy production and augment further
diversification of energy resources in Southcentral Alaska.
Alaska Energy Authority Page 2 of 2
The clean energy produced by the project will reduce air quality emissions related to power
generation while simultaneously conserving those natural gas reserves in the Cook Inlet.
“AEA is excited to work with the Renewable IPP team again to provide them with the additional
capital needed to make this project a reality,” said AEA Executive Director Curtis W. Thayer.
“The PPF loan program is an attractive, patient capital funding mechanism that can be leveraged
to diversify Alaska’s energy sources and introduce additional renewable energy on the Railbelt.”
“We’re thrilled by the State’s instrumental support to bring cost-competitive renewable energy
to Alaskans,” said Renewable IPP, LLC CEO Jenn Miller. “With this announcement, the State is
taking real steps to diversify our energy supply and spur economic growth.”
CleanCapital, a New York-based clean-energy investment platform will be the owner-operator of
the project, providing the balance of the equity financing needed for project construction.
Owing to Renewable IPP’s technical and operational prowess in Alaskan solar development, they
will be under contract with CleanCapital to perform all construction and continuing operations
and maintenance of the solar farm. In addition to its significant capital investment in this project,
CleanCapital’s investment will fund Renewable IPP’s operations to accelerate the development
of its future clean-energy project pipeline in Alaska. CleanCapital is a veteran in the distributed
solar and storage asset industry, owning more than 200 solar projects across the United States,
with a mission to accelerate the flow of institutional capital into clean energy.
Construction commenced in August 2022, with a groundbreaking ceremony held in mid-
September with attendance from Governor Mike Dunleavy, Matanuska Electric Association
(MEA), and AEA. The project is anticipated to be completed in late summer 2023. MEA has
committed to purchasing all energy generated at the solar farm once completed, under a Power
Purchase Agreement approved by the Regulatory Commission of Alaska in March 2022. Once
online, the project will supply power to ratepayers in Eagle River and the greater MEA area.
AEA’s PPF loan program provides loans to local utilities, local governments, or independent
power producers for the development, expansion, or upgrade of electric power facilities,
including distribution, transmission, efficiency and conservation, bulk fuel storage, and waste
energy. For more information on AEA’s PPF loan program, visit
https://www.akenergyauthority.org.
The Alaska Energy Authority is a public corporation of the state. Its mission is to reduce the cost
of energy in Alaska.
###
813 West Northern Lights Boulevard, Anchorage, Alaska 99503 T 907.771.3000 Toll Free 888.300.8534 F 907.771.3044
REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG
RGYAUTHORITY.ORG
PRESS RELEASE
Brandy M. Dixon
Communications Director
(907) 771-3078
FOR IMMEDIATE RELEASE
October 26, 2022
AEA Board Approves Bonding for Transmission Upgrades and Battery Storage
Projects represent the largest investment in Bradley Lake since its construction more than 30 years ago
(Anchorage) – Today, the Alaska Energy Authority (AEA) Board of Directors unanimously
approved an estimated $175 million in bond financing to improve the efficiency and capacity of
power from the Bradley Lake Hydroelectric Project. The bonding by AEA, in partnership with the
Railbelt utilities, will be at no additional cost to ratepayers and with no burden on the State
treasury. Closing of the bond transaction is expected to take place on or before December 2,
2022.
The bond proceeds will be used solely to pay for transmission line upgrades and battery energy
storage systems that will reduce the constraints on the Railbelt grid by improving the Kenai
Peninsula’s transmission capacity to export power from Bradley Lake, while also allowing for the
integration of additional renewable energy generation. Funding for the projects is coming from
the excess payments made by the five Railbelt utilities after the Bradley Lake bonds were paid
off. These projects include:
Upgrade Transmission Line between Bradley Lake and Soldotna Substation
Upgrade Transmission Line between Soldotna Substation and Sterling Substation
Upgrade Transmission Line between Sterling Substation and Quartz Creek Substation
Battery Energy Storage Systems for Grid Stabilization
The “Railbelt” refers to the interconnected electric grid that stretches approximately 700 miles
from Fairbanks through Anchorage to the Kenai Peninsula. About 70 percent of Alaska’s
population is served by the Railbelt electric system. Four member-owned electric cooperatives
and one city utility sell power to Railbelt customers. The Railbelt’s energy systems have
undergone significant change since they went into service more than 40 years ago. Over this
period, loads have increased, transmission assets have aged, and greenhouse gases have
become an increasingly important factor. In addition, cost-saving power sales between utilities
have increased, demanding more of the system, and soon, regional integrated resource
planning will increase the benefits of sharing power throughout the region.
Owned by AEA, Bradley Lake is an important generating plant on the Railbelt and the largest
hydroelectric plant in Alaska. Located approximately 27 miles northeast of Homer on the Kenai
Peninsula, the 120-megawatt facility generates 10 percent of the total annual electrical energy
Alaska Energy Authority Page 2 of 4
used by Railbelt electric utilities and provides some of the lowest-cost power in the state to
about 550,000 Alaskans from Homer to Fairbanks.
Bradley Lake is managed by the Bradley Lake Project Management Committee, which is
comprised of a representative from each of the five Railbelt utilities and AEA. Each utility has
paid a portion of the annual debt service on the original bonds since Bradley Lake was
completed. The bonds were paid off in 2021 and under the Power Sales Agreement; the Railbelt
utilities continue to make annual payments until 2050. These funds are now available to be used
for upgrades related to the Bradley Lake project. The Department of Law has determined that
the proposed transmission upgrades are required project work that benefits Bradley Lake and
Railbelt ratepayers.
The Railbelt utilities are Chugach Electric Association (Chugach), Golden Valley Electric
Association (GVEA), Homer Electric Association (HEA), Matanuska Electric Association (MEA), and
Seward Electric System.
The Alaska Energy Authority is a public corporation of the state. Its mission is to reduce the cost
of energy in Alaska.
###
Primary Contact:
Brandy Dixon, Alaska Energy Authority, (907) 764-3928 or bdixon@akenergyauthority.org
For quotes and contact information, see below.
Perspectives:
Office of Governor Mike Dunleavy (Contact: Jeff Turner, (907) 310-4961)
“Today’s announcement is a leap forward in the state’s effort to modernize and diversify the
Railbelt energy portfolio,” said Governor Mike Dunleavy. “For consumers and businesses, the
investment will lead to a more reliable power grid, carrying more electricity from a wider variety
of sustainable energy sources like solar, wind, hydro, tidal, and hydrogen power. A more reliable
grid will power growth in Alaska’s economy and make us more energy independent.”
Alaska Energy Authority (Contact: Brandy M. Dixon, (907) 771-3078)
“The AEA Board of Directors has become increasingly focused on grid resiliency since the Swan
Lake Fire damaged 39 miles of transmission lines between Sterling and Cooper Landing on the
Kenai Peninsula, which took four months to bring the line back into service costing an estimated
$12 million to Railbelt utility ratepayers,” said AEA Board Chair Dana Pruhs. “Upgrading this
line represents one of the largest investments since Bradley Lake was constructed and reinforces
AEA’s commitment to ensuring access to safe, reliable, and affordable energy for all Alaskans.”
Alaska Energy Authority Page 3 of 4
Alaska Energy Authority (Contact: Brandy M. Dixon, (907) 771 -3078)
“Governor Dunleavy charged AEA and the utilities to develop a plan to increase the reliability
and resiliency of the Railbelt corridor. With this bonding approval, these transmission upgrades
and battery storage can now be realized and benefit consumers through cost sharing, better
cost alignment, increased reliability, and allow for additional new renewable projects to come
online,” said AEA Executive Director Curtis W. Thayer.
Chugach Electric Association (Contact: Julie Hasquet, (907) 717-9619)
“We are pleased to see this important funding move forward,” said Chugach CEO Arthur
Miller. “The projects that this funding supports will provide decades of benefit to Alaskans
throughout the Railbelt. Improvements in transmission and energy storage infrastructure
increases reliability and resiliency of the grid, creates operational efficiencies, supports the
advancement of renewable generation, and allows us to continue providing affordable, reliable
power to our members.”
Golden Valley Electric Association (Contact: Meadow Bailey, (907) 451-5676)
“We thank AEA’s Board of Directors for approving the bond package to finance the Bradley Lake
Hydroelectric Required Project Work. The electricity produced from Bradley Lake is low cost,
carbon free energy that benefits all Railbelt members. For Golden Valley Electric Association
members, and all Railbelt communities, access to reliable, affordable energy is essential for
economic viability. The Required Project Work will assist in ensuring that the benefits of the
Bradley Lake Hydroelectric project continue to be received well into the future,” said GVEA CEO
John Burns.
Homer Electric Association (Contact: Keriann Baker, (907) 235-3302)
“Homer Electric Association (HEA) continues to work with the state and the Railbelt utilities to
secure funds necessary to modernize Alaska’s aging transmission system and expand battery
storage. Without the incorporation of batteries into transmission, we will quickly get to a point
where we will not be able to meet our clean energy generation goals without new sources of
system regulation. These upgrades are necessary to diversify our generation assets,” said HEA
General Manager Brad Janorschke.
Matanuska Electric Association (Contact: Julie Estey, (907) 355-4447)
"MEA joins the other Railbelt utilities in a shared vision to transform our electric system into a
robust and resilient grid that fosters energy security and a diverse energy mix," said MEA CEO,
Tony Izzo. "We appreciate the leadership and commitment of the Governor and the Alaska
Energy Authority in supporting these critical system upgrades as an investment in Alaska's
future."
Seward Electric System (Contact: Rob Montgomery, (907) 224-4071)
“The Railbelt utilities are united in their goal of providing power consumers with affordable and
reliable energy from a diverse mix of resources. In achieving this important objective, we must
continue our efforts to build a more robust and resilient grid, and expand energy storage
capabilities,” said Seward Electric System General Manager Rob Montgomery. “Clearly, these
Alaska Energy Authority Page 4 of 4
funds will help finance much of the critical work that must get done. And we, the Railbelt
utilities, appreciate the leadership and support we’ve received from the Alaska Energy Authority
and Governor Dunleavy through the process.”
813 W Northern Lights Blvd, Anchorage, AK 99503 Phone: (907) 771-3000 Fax: (907) 771-3044 Email: info@akenergyauthority.org
REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG
RGYAUTHORITY.ORG
October 28, 2022
Forbes Media
499 Washington Blvd
Jersey City, NJ 07310
RE: “Tax Dollars Are Wasted On Alaska’s EV Charging Stations” Article
Dear Forbes Team:
An article authored by Diana Furchtgott-Roth appeared on Forbes.com on October 25, 2022,
that singled out the proposed installation of electric vehicle (EV) charging stations from the
Bipartisan Infrastructure Law funding in Alaska as a waste of federal tax dollars. While there will
always be a debate on how federal money is allocated and spent, the article unfairly targets
Alaska and provides several misconceptions about EVs in our great state.
The summation of the article argues that this investment is a waste because it is going “where
EVs are generally impractical and unusable.” The top country in the world for EVs per capita is
Norway, which is in stark contrast to sunny California cited in the article as the panacea for EVs.
Norway’s weather is more similar to that of Alaska than it is to California, as both areas are
situated in similar latitudes and extend into the Arctic Circle, and Norwegians seem to not have
an issue adopting and operating EVs in their climate. Maybe it’s a coincidence or the latitude
proximity with Oslo, but Alaska’s capital, Juneau, has the third highest per capita EV ownership
in the United States, which is further complimented by being almost entirely powered by
hydroelectric power. Alaska has numerous other communities powered by renewables with
limited roads where EVs would make sense.
In the article, Ms. Furchtgott-Roth compares the funding allocated to each state to the number
of EVs in the state, creating a federal investment per EV metric. The formula funding isn’t based
on EV registrations, nor should it be, as the states with fewer EVs are more likely to need
additional support to deploy infrastructure. The funding enables the state to inspire confidence
in existing EV drivers and potential owners as charging infrastructure becomes a more common
sight. With all major vehicle manufacturers committing their long-term roadmap to EVs, having
a visible and reliable charging network supports a consumer in deciding to purchase an EV.
Further, as cited in the article, with a reduced range in the colder months, access to charging
becomes even more important as more EVs travel our roadways.
The funding also allows the state to support the Justice40 goals within the Bipartisan
Infrastructure Law where at least 40 percent of the benefits of the investment should go to
disadvantaged communities. Rural communities may be unable to provide the investment to
support charging infrastructure on their own without this funding. Still, they may see some of
the most significant benefits from its deployment.
Alaska Energy Authority Page 2 of 2
While the purchase price for EVs is still relatively high, the total cost of ownership for the vehicle
is typically lower than its gas counterpart, especially for those that travel long distances to
access goods and services. As other vehicle types are electrified, such as four-wheelers and snow
machines, Alaskans and visitors alike will continue to benefit from access to charging that
supports mobility, recreation, and the economy of Alaska.
We would like to invite Ms. Furchtgott-Roth to attend one of our Alaska Electric Vehicle Working
Group meetings or National Electric Vehicle Infrastructure workshops, as there is great
excitement for EVs in Alaska and lots of interest in how any challenges encountered can be
overcome. We appreciate and welcome the federal investment that prepares our state for the
future of vehicular mobility.
Sincerely,
Curtis W. Thayer
Executive Director
11/4/22, 11:21 AM Tax Dollars Are Wasted On Alaska’s EV Charging Stations
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I write on transportation and tech topics shaping tomorrow’s news.
TRANSPORTATION
Tax Dollars Are Wasted On
Alaska’s EV Charging Stations
Diana Furchtgo -Roth Contributor Follow
Oct 25, 2022, 04:53pm EDT 0
Listen to article 5 minutes
Relying only on battery-powered electric vehicles in a cold climate takes
courage. That’s one reason why, at the end of 2021, Alaska had 1,290
registered electric vehicles (EVs), compared to 563,070 in California and
95,640 in Florida, according to the Energy Department.
The new Infrastructure Investment and Jobs Act allocates $7.5 billion over
five years to states for electric charging stations. Alaska will get $52 million
of that money, which works out to more than $40,000 per electric vehicle.
Four states with even fewer electric vehicles than Alaska will get even larger
per-vehicle subsidies, according to the Department of Transportation.
North Dakota has the fewest electric vehicle registrations in the United
States: 380. It will receive $26 million for charging stations, or $68,000 per
registered EV.
Wyoming, with $27 million and 510 EVs, gets $53,000 per EV.
South Dakota, with $29 million, has 680 vehicles, and will collect $43,000
per vehicle.
11/4/22, 11:21 AM Tax Dollars Are Wasted On Alaska’s EV Charging Stations
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Those three states, like Alaska, are cold-weather states. The outlier is West
Virginia, which has 1,010 EVs and will get $46 million, or $46,000 each.
California is getting a much larger allocation, $384 million over 5 years, but
drivers in the Golden State use EVs, so the stations will at least get some
use. On a per vehicle basis, this works out to $682 per registered EV. With
California drivers piloting expensive Teslas and Hummers down sunny
freeways, reasonable people might ask why electric charging stations need to
be provided by the taxpayer.
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President Biden believes that the provision of these public charging stations
will encourage Americans to buy more electric vehicles. On June 9, 2022,
the White House announced, “President Biden’s leadership is mobilizing
public and private charging investment to accelerate the adoption of EVs
and create good-paying jobs across manufacturing, installation, and
operation.”
11/4/22, 11:21 AM Tax Dollars Are Wasted On Alaska’s EV Charging Stations
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Some states may see more EVs due to charging stations, but EVs cannot
defeat the laws of physics, and are unlikely to be popular in cold climates.
Americans know that car batteries are susceptible to cold. Many of us have
awakened on a cold winter morning to find our car batteries dead, and in
need of a jump start or a replacement. The American Automobile
Association has a fleet of small vehicles whose sole purpose is to rescue
troubled motorists in chilly situations.
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11/4/22, 11:21 AM Tax Dollars Are Wasted On Alaska’s EV Charging Stations
https://www.forbes.com/sites/dianafurchtgott-roth/2022/10/25/tax-dollars-are-wasted-on-alaskas-ev-charging-stations/?sh=7dcec07233a1 4/6
A study by Autocar shows that electric vehicles lose, on average, a third of
their range in the winter, which reduces the typical 240-mile range to 160
miles. If a heat pump is added to the car, the loss is less, but still the 240-
mile range would shrink to 180.
Car results varied. The Fiat 500 42kWh Icon lost 40 percent of its range in
the winter. The Ford Mustang Mach-E Extended Range RWD lost 35
percent, and the Porsche Taycan 4S Performance Battery Plus, with heat
pump, lost 22 percent. (The Taycan retails for between $83,000 and
$166,000.
Gasoline-powered engines also work less efficiently in extreme cold, but the
damage is not as great as with EVs. Winter temperatures in Anchorage,
Alaska, are so low that the city encourages residents to use engine block
heaters to make it easier to start their internal combustion engine cars on
cold mornings. The city gives out free timers so car engines can be warmed
for two hours prior to a cold morning start.
Unless and until battery technology changes, electric vehicles are not year-
round vehicles in cold climate states.
In such states, only high-income individuals can afford the luxury of owning
a vehicle that cannot be used efficiently for much of the year.
Even elsewhere, most electric vehicles are expensive, and largely owned by
upper-income people. There is no need for average earners in Alaska or
elsewhere to subsidize higher- earners’ electric charging stations with their
tax dollars.
It is wasteful for Congress to build charging stations in states where electric
vehicles cannot be used in many months of the year. Indeed, it’s foolish to
spend money on “infrastructure” that benefits only wealthy people who do
not need government support.
11/4/22, 11:21 AM Tax Dollars Are Wasted On Alaska’s EV Charging Stations
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If tens of millions of dollars magically appeared with no strings attached in
Alaska or other cold-weather states, the money would almost certainly be
put to a better use than electric charging stations. Individual states might
build roads suitable for all vehicles, or reduce taxes for residents and
businesses.
Just as the federal government did not provide gas stations and Tesla
charging stations, it should not be funding charging stations for EVs. It’s
obvious that one of the worst possible uses of the funds is in Alaska and
other cold-weather states where EVs are generally impractical and unusable.
.
Follow me on Twitter or LinkedIn. Check out some of my other work here.
Diana Furchtgo -Roth
I'm Director of Energy, Climate, and Environment at the Heritage Foundation, and I
teach Transportation Economics at George Washington University. From 2019 to 2021 I...
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11/4/22, 11:21 AM Tax Dollars Are Wasted On Alaska’s EV Charging Stations
https://www.forbes.com/sites/dianafurchtgott-roth/2022/10/25/tax-dollars-are-wasted-on-alaskas-ev-charging-stations/?sh=7dcec07233a1 6/6