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ANGDA commissions Cook Inlet energy study
What could annual household energy costs in the Cook Inlet area be in 2025 based on where and how the area gets its energy?
The Alaska Natural Gas Development Authority has contracted with Ecology and Environment to develop and analyze at least five energy scenarios combining gas and electric alternatives for Cook Inlet. The alternatives will be compared based on average annual household energy costs. Natural gas and energy alternatives in the study could include imported liquefied natural gas, coal power and energy efficiency, ANGDA said in its request for proposals.
Harold Heinze, ANGDA chief executive officer, said June 20 at a board meeting in Fairbanks that Ecology and Environment has been selected as the contractor for the study.
It’s a continuation of the work ANGDA did in 2006 with Dunmire Consulting, Heinze said, “but this will be more focused and it will include different mixes of ingredients and … it will give you a fairly good feel for what things are really helping lower the cost to the consumer and what things are not.”
The Dunmire study documented the Cook Inlet energy situation, identified energy supply alternatives and evaluated alternatives to determine the options with the cost possibility of meeting future energy needs cost effectively.
Heinze said he expects that by focusing on the cost of energy to consumers “you’re going to see pretty clearly that the cost of not having a spur line is very high. That in the longer term, bigger picture, having the spur line will lower the bill for you and me; and not having it will allow the bill — in any other case we can think of — to be much higher.”
The report will provide the basis for utilities to go to the regulators, he said, and will also help utilities understand “their individual dilemmas better.”
Heinze has talked in the past about the financial commitment utilities will have to make to commit to purchase North Slope gas (see, for example, “The $5.5B hurdle” in the July 2, 2006, issue of Petroleum News and “A 6-month window” in the Dec. 17, 2006, issue).
Scenarios from coal to renewable energy Heinze said study will compare scenarios such as coal-fired energy with natural gas and what that does to the cost structure. “It has implications: I can’t heat my house efficiently with a big coal plant because all it can give me is electrons and … I lose all that efficiency.”
In addition to a scenario heavy on coal-fired power, there will probably be a scenario heavy on renewable energy. The idea will be to “emphasize certain types of energy sources or combinations of energy sources,” he said.
The other issue is deliverability, a big issue with differences between summer and winter heating needs. “Some technologies are going to be better at that than others,” Heinze said.
He said ANGDA would work with Ecology and Environment on what the scenarios are, “but basically we want them to feel very comfortable that they have picked a realistic spread of scenarios.”
As for the numbers that come out of the study, Heinze said they’ve considered hiring another contractor just to check the numbers.
The result will be “crucial … not only in a regulatory-political sense but also it becomes critical to financial people.”
“Because I don’t have an energy plan for Cook Inlet I can hold up and say, ‘see right here it says build a spur line.’ … The best we can do right now is to get something that is fairly convincing of what at least the right mix of technologies are,” he said.
—Kristen Nelson
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