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Energy and Power: Good news in the face of adversity


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Alaska Energy Infrastructure Map: Alaska Energy Authority, “Renewable Energy Atlas of Alaska”

Alaska is uniquely and acutely aware of the necessity of understanding and balancing the business needs and environmental values implicit in the energy and environmental sectors of the economy. The state is facing a great deal of adversity in these areas. In August, Alaska Business Monthly presents two special sections: Energy & Power and Environmental Services. These naturally fit together; the responsible development of energy and power in Alaska is heavily reliant on environmental services.

In Alaska, energy is power.

In the Energy & Power special section, we bring readers an update about the six utility companies along the Railbelt and their efforts so far in establishing a regional transmission company, an update on the natural gas conversion related to the Interior Energy Project, and the growth in renewable energy infrastructure throughout the state, including the many projects under construction or soon to be.

In the Environmental Services special section, we take a look at that industry in three articles: Recycling Options for Industry, Natural Resource Development Litigation, the BLM Report on ANCSA Land Contamination—plus the annual Environmental Services Firms & Recycling Services Directory. Work in this sector continues to decline due to the price of oil.

Not a surprise then, that as the price of oil has come down so has the cost of energy, though not necessarily the cost of power. In the July 2016 issue of “Alaska Economic Trends” published by the Alaska Department of Labor & Workforce Development Research and Analysis Section in “The Cost of Living: Prices didn’t rise as fast in 2015, mostly due to falling energy costs” by Neil Fried, he points out that, “In Anchorage, which is the only place in the state where inflation is measured, energy prices fell by 10.3 percent in 2015, the single largest annual decline since 2009. Gasoline prices alone fell nearly 25 percent.”

He continues by explaining how energy prices have a “powerful effect on the overall inflation rate,” including “transportation, which fell by nearly 7 percent.” Transportation is heavily weighted in the Consumer Price Index, which is what is used to measure inflation. In 2015, “Anchorage’s inflation came out to just half a percent—the lowest in twenty-seven years.” Remember Anchorage in 1989?

However, in Anchorage, power prices did not go down in 2015. Why? Fried points out that “the drop in energy prices had little effect on the cost of heating most homes in Anchorage because most of them are heated by natural gas, for which prices are regulated by the Alaska Regulatory Commission. Piped gas prices for homes in Anchorage increased by 7 percent in 2015.”

Fuel prices in rural Alaska did go down in 2015. Fried reports that the Alaska Department of Commerce, Community, and Economic Development surveyed one hundred communities as they do each year and found that “overall heating fuel and gasoline prices fell 18 percent and 13 percent respectively between January 2015 and January 2016.” Arctic Village, where fuel is flown in, had the highest fuel costs: $12 per gallon for heating fuel #1 residential and $10 per gallon for regular gasoline.

So there is good news in the face of adversity. And there is good news in the August issue of Alaska Business Monthly magazine. The team has put together another really great issue—enjoy!

 

 

This article first appeared in the August 2016 print edition of Alaska Business Monthly.

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