Matanuska Electric Association General Manager Discusses Rates, Fuel Importation
Palmer, AK – Joe Griffith, General manager of Matanuska Electric Association, spoke with the Anchorage Chamber of Commerce on Monday in concert with representatives of Chugach Electric Association and Municipal Light and Power, to discuss the future of the Railbelt energy supply.
“Fuel supply availability from the Cook Inlet is diminishing,” Mr. Griffith told the crowd. “Cook Inlet natural gas provides the fuel for the majority of our Railbelt electrical generation, and a new solution is needed. We predict a Cook Inlet fuel supply shortfall by 2014, and as a result I see no viable alternative but importation of natural gas in the form of LNG or CNG (liquefied natural gas or compressed natural gas). It is going to take leadership from our Administration and Legislature, along with all of the utilities working together, to put in place long-term solutions to this problem.”
Under an importation scenario in the winter of 2014, fuel costs can be expected to rise significantly. Preliminary estimates show a potential for a substantial increase in fuel costs for imported natural gas, primarily because of support infrastructure needs. It is important to remember, however, that this higher-cost fuel would only be used to meet the gap between Railbelt consumption and Cook Inlet production. As Cook Inlet gas production continues to decline, the proportion of imported fuel, and thus overall costs, can be expected to rise.
MEA anticipated this problem during the planning phases of its new Eklutna Generation Station (EGS). The Wärtsilä dual fuel engines driving the new facility are designed to operate on natural gas and fuel oil (diesel), and plans for integration of a propane burning option are in the works. The engines will operate primarily on natural gas, and are expected to be 25-30% more efficient than anything currently operating on the Railbelt.
In case of interruption to the gas supply, the advanced Wärtsilä dual-fuel technology enables the engines at EGS to switch smoothly while operating to fuel oil. “In the event of a natural disaster such as an earthquake, these engines can switch fuels without a hiccup” states Griffith “and that was a major factor in our decision to go with Wärtsilä.” Long-term operation on fuel oil would be an expensive proposition, with fuel costs potentially tripling.
“While MEA has worked hard to position itself to deal effectively with a changing fuel supply landscape, it is vital that utilities work together with our elected leadership to devise and implement long-term solutions to this fuel crisis. In the coming weeks, ARCTEC (the Alaska Railbelt Cooperative Transmission and Electric Company – a cooperative effort among the Railbelt electrical utilities) will present a 10-year plan of needed electric transmission and gas-supply infrastructure improvements to our Governor and Legislature for funding support. We appreciate the strong support of our elected officials in meeting these difficult challenges, and we look forward to working together to craft a long-term solution. Affordable electrical power is essential for economic growth and diversification in the state of Alaska.”
Matanuska Electric Association, Inc., Alaska’s oldest and second-largest electric cooperative, is owned and operated by its members. Covering more than 4,000 miles of power lines, MEA’s service area extends north past Talkeetna, over to the mighty Matanuska Glacier, and south to Eagle River. MEA was founded in 1941 by 201 colonist families, and celebrated 71 years of service in 2012 with nearly 56,000 points of service