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Providing coverage of Alaska and northern Canada's oil and gas industry
March 2019

Vol. 24, No.10 Week of March 10, 2019

MEA worried about transmission company

Izzo writes to RCA saying that ART’s certificate application is premature and that a due diligence review needs to be done first

Alan Bailey

Petroleum News

Tony Izzo, CEO of Matanuska Electric Association, has filed a letter with the Regulatory Commission of Alaska, expressing MEA’s concerns about a new Railbelt electricity transmission company, Alaska Railbelt Transmission LLC, or ART, that has recently filed with the commission for a certificate of public convenience and necessity. As previously reported in Petroleum News, ART wants to take over the planning, operation, maintenance, upgrading and financing of the electricity transmission network that spans the Railbelt region. The idea is to gain efficiencies from unified operation of the system and to facilitate the financing of future grid upgrades.

Izzo said that, while MEA remains committed to the concept of having a single transmission company to operate the grid, the ART concept is deficient and premature. The company’s certificate request should be rejected, Izzo wrote.

MEA has been working cooperatively with the other Railbelt electric utilities on the transmission company concept, Izzo wrote. However, after an initial presentation of the certificate application and other ART documentation on Dec. 7, MEA had proposed a due diligence review of the ART plan. And, when none of the other utilities expressed interest in participating in this study, MEA embarked on the study by itself, indicating that the due diligence review should be complete by April.

Certificate application filed

Nevertheless, Homer Electric Association, Municipal Light & Power, Golden Valley Electric Association, the City of Seward and American Transmission Co. have formed ART and have filed the certificate application. American Transmission Co., or ATC, a Wisconsin transmission company, has been assisting the Railbelt utilities in figuring out how a transmission company could be implemented in the Railbelt. ART is a for-profit company, with ATC as its largest shareholder. Revenues would come from fees charged for use of the transmission system.

Chugach Electric Association, the other Railbelt electric utility, has also not yet signed up for ART involvement - it is still conducting its own due diligence prior to seeking board approval for its participation in the new company.

MEA has several concerns about ART, including its funding mechanism, and its status with regard to the operation of some transmission assets such as the assets used for the transmission of power from the Bradley Lake hydropower facility on the Kenai Peninsula. In addition, Chugach Electric is in the process of purchasing ML&P: Currently ML&P is a partner in ART, while Chugach Electric is not. Izzo also said that MEA believes that there are better business models for the transmission company than the model advanced by ART.






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