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Court rules on Bradley Lake connection
Supreme Court upholds view that RCA does not have jurisdiction over shipment of power from hydro facility through transmission line
Alan Bailey Petroleum News
In a Feb. 22 opinion, the Alaska Supreme Court upheld a Superior Court decision, ruling that the Regulatory Commission of Alaska does not have jurisdiction over tariffs for the carriage of power from the Bradley Lake hydropower facility on a transmission line between Soldotna and Quartz Creek on the Kenai Peninsula. The court ruling impacts the cost of Bradley Lake power, which is used by the Alaska Railbelt electricity utilities as part of their power supply mix.
Homer Electric Association, owner of the line, had filed a tariff for the shipment of Bradley Lake power on the line. The RCA had accepted the tariff filing but had suspended the tariff, pending an investigation into the rates that HEA wanted to charge. But other Railbelt electric utilities, the Alaska Energy Authority and the state of Alaska Attorney General’s Office had appealed the RCA’s right to adjudicate the tariff, saying that the tariffs for Bradley Lake power transmission should be set by the committee that oversees the operation of the Bradley Lake system. The courts have now upheld that appeal.
The Bradley Lake facility, in the southern Kenai Peninsula, is a reliable source of relatively cheap electricity for the utilities that use the Alaska Railbelt electricity grid. The Alaska Energy Authority, a state agency, owns the facility, which is operated under contract by Homer Electric Association and managed by a committee, the Bradley Project Management Committee, or BPMC, consisting of representatives of the Railbelt electricity utilities and AEA.
HEA transmission system HEA owns the transmission system that transports power from Bradley Lake across the western part of the Kenai Peninsula. In particular, an HEA line connects Bradley Lake to an HEA-owned substation at Soldotna, in the interior of the peninsula. Another line, referred to as the S/Q Line connects the Soldotna substation to a substation owned by Chugach Electric Association at Quartz Creek. Chugach Electric handles the shipment of Bradley Lake power from HEA’s transmission system, through Chugach Electric’s transmission system, for use by Chugach Electric and on behalf of other utilities that purchase Bradley Lake power.
Until relatively recently Chugach Electric leased the Soldotna substation from HEA, with Chugach Electric metering the Bradley Lake power throughput at Soldotna, for acceptance into the Chugach Electric network. But, following the expiration of the Soldotna lease in January 2014, HEA took over operation of the substation, removing Chugach Electric’s metering system and, in effect, moving Chugach Electric’s acceptance point for Bradley Lake power to Quartz Creek.
Under a series of agreements for the operation of Bradley Lake, HEA undertakes to ship Bradley Lake power to Soldotna, while Chugach Electric ships the power from Soldotna to Quartz Creek, and hence into its own transmission network. The BPMC sets rates for the transmission of Bradley Lake power through HEA’s system, to compensate HEA for the use of its system.
Tariff filings In November 2013, in anticipation of the expiration of the lease on the Soldotna substation, HEA filed two tariff letters with the RCA, one for the claiming of line loss costs associated with the transmission of Bradley Lake power, and the other for setting a tariff for the shipment of power on the S/Q line between Soldotna and Quartz Creek. The commission rejected the line loss filing but agreed to review the tariff filing, saying that the Bradley Lake agreements did not appear to address what would happen when the lease on the Soldotna substation expires.
Several of the utilities protested the RCA decision. And the BPMC took a position that the Bradley Lake agreements were not impacted by the expiration of the Soldotna lease, that Chugach Electric has the right to ship Bradley Lake power over the S/Q line and that HEA is adequately compensated for the use of the line under the terms of the agreements.
The utilities protesting the RCA position appealed the commission’s decision in Superior Court. Observing that the Bradley Lake agreements were signed after the Soldotna substation lease had already gone into effect, the Superior Court ruled, and the Supreme Court had now agreed, that the RCA does not have the authority to review or determine the rates for shipping Bradley Lake power between Soldotna and Quartz Creek. Nor does the commission have the authority to adjudicate over line losses associated with the shipment of the power on HEA’s system, the courts have now ruled.
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