|
Reflections on Railbelt grid issues RCA commissioners comment on some of the issues relating to the potential for unified operation of the power transmission system Alan Bailey Petroleum News
As part of a continuing investigation into the pros and cons of reforming the way in which the Alaska Railbelt power transmission grid is managed, during a May 27 meeting of the Regulatory Commission of Alaska the commissioners reflected on the various arguments for and against reform. The state Legislature has mandated that the commission investigate whether there would be benefit in transferring the management of the grid to some form of independent operator.
As part of its investigation, the commissioners heard testimony from Antony Scott from the Alaska Center for Energy and Power. As previously reported by Petroleum News, during a series of weekly presentations Scott overviewed the complex issues relating to grid management reform. The commission has also received written comments on the grid management question.
Currently, ownership and operation of the grid by five independent utilities leads to inefficiencies in the use of power generation facilities on the grid. And, while the grid infrastructure is aging and susceptible to single points of failure, the utilities say that they lack the financial resources to undertake major grid upgrades.
Complex issues But, unifying the management of the grid would raise some complex management and commercial issues. So, would the end result of unification justify the pain involved in the transition from the current management structure?
Commission Chairman Robert Pickett commented that he would need to be convinced that there would be tangible benefits that would exceed the costs of reform before he would support a reform proposal. And although the grid as a whole may be operating on a less than optimal basis, the utilities have done a good job of “keeping the lights on,” doing the best they can within their own territories and using bilateral agreements between utilities where necessary, Pickett said.
However, although there is much uncertainty over the scale of the benefits to be gained from grid management reform, there is a powerful argument in support of a new management structure for the grid, Pickett said. Pickett also made a comparison between the fragmentary nature of the transmission grid operation and what used to be the fragmented ownership of the Cook Inlet gas pipeline infrastructure - the pipeline system, which used to be characterized by expensive and time-consuming contention over tariff issues, has been unified recently as a result of an ownership change. The unification of the pipeline system will prove beneficial for gas producers, Pickett said.
Lack of consensus Both Pickett and Commissioner T.W. Patch commented on what they perceive as a lack of consensus among the utilities over what needs to be done. Patch added that he did not see much willingness by individual utilities to make sacrifices for the common good. Moreover, since there are unresolved issues regarding the allocation among the utilities of savings gained from grid unification, the value of unification remains uncertain, he said. That raises questions over whether creating some form of independent operator for the grid would be the most effective option for efficient electrical transmission, Patch said.
On the other hand, the commission needs tools such as the ability to oversee an integrated energy resource plan and the siting of new power generation facilities, to avoid some recent issues, such as the construction of excess power generation capacity, he said.
Commissioner Stephen McAlpine expressed regret that some of the money that had been invested recently in new power generation capacity had not, instead, been put into transmission upgrades. In the current political climate, the likelihood of the state Legislature granting additional funds for transmission upgrades “is almost nonexistent,” he said. Given that situation, the three utilities at the center of the grid - Chugach Electric Association, Municipal Light & Power and Matanuska Electric Association - may have to work more cooperatively, with the more peripheral utilities - Homer Electric and Golden Valley Electric Association - operating more independently, he commented.
However, several commissioners expressed concern about the concept of either the Legislature or the commission trying to enforce reform against the utilities’ wishes.
Commissioner Janice Wilson commented on the many studies that have been conducted over the years into transmission grid reform, with none of those studies ultimately resulting in grid unification.
Both Wilson and Pickett commented on the importance of the reliability of power supplies, especially given questions over the fragility of the grid and the lack of redundancy in the current transmission infrastructure. It would be useful to have clarity over the commission’s authority to regulate reliability issues across multiple utilities, Wilson said.
The commissioners anticipate making their determination on the transmission grid management question after they finish accepting comments on the issue on June 17.
| 