I call the House Energy Committee, meaning to order.
Today is February 5th, thanks to the slides up there,
and it is 1.10 PM.
Members present are Representative Cop,
Representative Castello, Representative Edgman,
Co-Chair Hahn, and myself, Co Chair Donna Meers.
We have a quorum to conduct business,
but today we have presentations.
I'd like to remind members and staff to-
Please turn off your phones.
If you need to pass a note to anyone,
please see my aid, Griffin Plush.
I'd also like to thank Representative Holland's aid
Tim Truer for being here today.
Before we get started, I would like
to think our recording secretary, Cheryl Cole,
and Doug Bridges from the Juneau ILO for technical support.
So today's agenda.
We will be hearing presentations
from four rural electric utility CEOs
Challenges and opportunities they face in providing power to communities after everyone's given their presentations will have everyone join us at the table for a panel discussion. So
be mindful when you're considering your questions
so that we've got time for four of them and a discussion.
I am grateful that were taking advantage
of the Alaska Power Association Conference in Juneau this week.
And these are folks that don't necessarily fly down
to Juneo quite so often.
So I'm very grateful
that you are taking the time to be here with us today
and share in person.
your systems and the work that you're doing.
So we have Bill Stamm from the Alaska Village Electric
Cooperative.
Thanks for joining us again.
Tom Atkinson from Cotsiebule Electric Association,
who has previously joined us on the phone in person here
today.
Clay Coplin from Cordova Electric Cooperative,
and Will Cheney from New Chicago Cooperative
So first up, we'll start with Bill Stan.
Bill is the CEO of the Alaskan Village
put yourself on the record and begin your presentation.
Thank you. I'm Bill Stan, president and CEO of Alaska Village Electric
Octave, I'd like to thank Co-Chair Mears and Co Chair Holland,
rest of the committee members for having us come down,
give our perspective on providing power and rural Alaska.
Alaska village electric cooperative is a member owned cooperative,
much like my compatriots here. We're owned by the members we serve.
cooperatives. We serve 58 rural communities around Alaska, mostly in Western Alaska. But
we also do serve Yakutat in Southeast, Old Harbor down in Kodiak Island, and Minto, which
is about a three-hour drive north of Fairbanks. Mito is the only system that we serve that's
on the road system. Everything else that
we served, materials, people, everything that
These next few slides are just visual entertainment.
When a person from AVAC is dispatched to go to one of our communities,
they usually are flying out of Anchorage and they take a jet
and land in a hub community, a contribute, gnome,
bethole, those sorts of places.
Then they get on a smaller plane, they transport all their gear,
and then they fly for another hour or so over the wilds of Alaska where it is.
beautiful and sometimes frightening. The things you see out there, but I just provided those slides
to impress upon folks that there's not a whole lot of infrastructure between point A and point B.
When you get to a community, looking out the window, this is looking at the community of
And you can see below the plain, the Bering Sea is just about frozen,
there's some open water there, there is some land fast ice against the coast
and the community is right on the edge of the island.
If we zoom into that community, it is a typical rural community
very compact in the area that they're at.
The communities themselves are spread out, but once you get to where the resources are,
world community. Some of the things that you can see in this drawing are in
this picture. The airstrip, that is the lifeblood or
connection to the outside world, there is
I don't know if I can actually use my mouse
if that shows up probably not. Okay. In the lower left
there's a power plant and tank farm, water plant,
There's houses spread out the community. There is a clinic, there's a store,
there is the city office. The large building in the upper right is
the K through 12 school and if you look a little farther
right you'll see two wind turbines. So we installed
wind generation in Savonga somewhere around 2010 I believe
and it's been providing some diesel displacement in that community since
then. But that's it. Not a lot of industrial
Typically, Savunga is a community of about 800 people, I believe, and if you are looking
at them on this graphic, they're about three-quarters of the way up the page, so they've got kilowatt-hour
annual power sales from our 46 power plants, so we only have 46
powerplants serving the 58 communities, some of our communities are tied together
with distribution lines. Those lines are at a distribution voltage, not
the large infrastructure towers that you might see in transmission, just
very similar to what you may see outside your bedroom window
power poles with power lines on them. Some of those power
poles are mounted onto driven steel piles
But I've got two communities highlighted here, Wales and St. Mary's.
I got some anecdotal stories to share with those, and that's a reminder to myself.
But also to provide some perspective on the size of the communities that we serve.
You can see that there is a large bar to the very right side of that graphic,
and it is the community of Bethel.
The Bethel utility in 2014 it is head and shoulders larger than all of the other communities
We serve and it accounts for about one-third of our total kilowatt hour sales
We have a lot of capital projects that are ongoing we've been very fortunate although we don't have
Resources that others might talk about
As far as hydropower or anything like that. We certainly don t have gas availability like they do on the rail belt
but we have been very fortunate in receiving funding from federal and state government
in order to do capital projects that allow us to integrate renewables, both wind and
solar.
We've been adding energy storage, we've looking at marine feasibility studies,
we been developing our interconnection with broadband internet and upgrading our cybersecurity
equipment through the internet to our home office.
We're in negotiations with the federal government for a substantial grant in order to help boost our cyber security with all those communities,
and we hope to deploy SCADA over the next few years.
Presently, our power plan operators who are our front line
Operate and maintain our power plants on a day-to-day basis and they still fill out their plant logs and fax them in once a week
That's how we keep track of how things are going
Mobilization freight costs are high. I know most of you folks
have had some
Exposure to rural Alaska when you get when your landing a plane out there with all of your gear
There's now terminal building typically not a place to get warm. There is a snow removal equipment building where they store the loader or the
greater that clears the runway and people are usually either huddled on the sunny side or on
the non-windy side of the SREB waiting for the plane. You offload and gear gets dispersed by
four wheelers and pickup trucks. If it's wintertime it snow machines and trailers and in the summertime
we have the ability to move larger amounts of freight and fuel by barge. When a bage comes to
a community there's not a large port facility they're usually just pulling up to a sandbar or a muddy
freight. We've been at this for a while, EVEC was originated back in 1968 and the
tanks you see in the front center of that picture were probably sent to the
community of New Stoyahawk in early 70s.
We received funding to replace the tanks in New
Stuyahawks and these tanks were in better shape than the ones that were
in Equok, so they got moved to Equak. They're repainted, they've got the
So that we could attach new valves, but it's making do with the materials you have because
of the extreme cost of actually getting new products out into the communities.
The picture of diesel engine in the lower left is just a typical 500KW unit.
We usually have three to four diesel generators in each community of various sizes to meet
various loads.
Our peak loads are typically in the winter time. We do have one community yaketat that
still has a fish processing plant and their peak load is in summer. Because of poor fish returns,
poor economics, offshore processors, those sorts of things, we used to have, I think,
five different processing facilities within our system. The one in
I'm forgetting the name of the one in the upper eukon, but it's close many years ago,
the 1 in a monic at the mouth of eukeon close probably five years
ago. Togiak closed like three years
ago and Bethel used to have fish processing back in
the 70s. That's a long gone thing. Quinahawk closed probably 10 years
ago it moved off to platinum and then closed a few years later.
So there is not a lot of industrial or commercial, large commercial sources
revenue for ABEC or load growth in our community.
Our linemen are typically climbing the poles.
We do have bucket trucks in Bethel and Yakutet,
but for the most part, they're digging holes by hand,
climbing poles with belts and hooks
and lifting transformers with blocks and tackle.
We have about 90 full-time employees.
The front line of our power plant operations.
or with our local power plant operators, it's a part-time job that they can
maintain the power plants, review what's going on, make sure that the day tank is full, that there's
no leaks or spills, and they're running the proper size engine for the load. We have about 40 traveling
technicians, linemen, mechanics, welders, carpenters those sorts of folks that go out and build our
and those are all primarily stationed out of anchorage.
Fuel supply is critical for all of our communities, although we've been integrating renewables
for the last 25 years, still 95% of the generation comes from diesel fuel.
Not only does that provide for electricity, but it also provides for heat in all those communities
The way fuel supply in western Alaska works is the vendors typically hire a tanker.
They fill it with fuel and then they have light ridged barges that go up to that tanker
the tanker comes in and moves up the coast as the snow and ice melts and those light
ridges go back and forth from the tanker to the communities up
the rivers deliver fuel, and go all summer long ferrying back
and fourth as to
tanker moves north and then they turn around and start heading south and
hopefully they can top off those places that need a little lecture fuel before
winter. Looking at the equivalent cost of energy, I've converted some of this
information from the cost diesel fuel into BTUs. So a million BTU's is a standard
way of looking at energy. It's about a million cubic feet of natural gas.
When you look at the cost of our barge delivered fuel, which is between three and five dollars a gallon,
you're looking anywhere between $20 and $40 per million BTU.
We have fly-in communities, no attack. We always have to fly in fuel.
There's a few places in the upper Cobuck where we periodically have
to try and fuel and then we're talking over $10 per gallon for the costs of fuel
and that's no markup. That's what it costs us to get into our tanks.
and then you're talking closer to 90 dollars per million BTU. Comparing that to the rail belt
where they get gas from the cook inlet, they're about seven and a half dollars, per
million cubic feet or million Btu, and there's a lot of whaling and consternation about the cost of
gas going up, probably going to double in price, depending on what solutions come,
And again, just mentioning that it's not just electricity.
It's also heating people's homes.
So people are on the edge of being
able to afford heating their homes, buying electricity,
and sometimes it is a decision between food and heat
and lights.
So it can be difficult out there.
Power cost equalization is tremendous benefit
could not stress enough the continuation of power cost
equalization and the protection of the PCE fund.
But it is not a, doesn't solve all the problems.
Only a portion of electricity is eligible for Pce.
So schools and commercial accounts are not eligible
for PCE, it's really just residential
and community facilities.
Only portion that is paid for through PcE.
So in the end, 80% of cost of
energy that AVEC supplies is paid for by the folks in those communities, the
businesses, and 20% is roughly reimbursed by PCE. Where does AVEX spend its money?
On the left you see a multicolored part of the pie chart and those are broken
out into the systems of standard accounts with the rural utility service.
Cost of generation expense distribution expense interest expense those sorts of things and the big blue part of that pie chart
It's just the cost of fuel. So everything that we do is
very
Dependent on the costs to fuel it accounts
for more than 50% of all of our costs of electricity I
mentioned that. We do
Have been using renewable energy
It is a great benefit for the communities that
get it but not all the communities have it and it's still not a 100% solution or displacement of
diesel fuel. I wanted to share a little bit in particular a host of projects that we did in
St. Mary's over the last 10 years. St Marys and Mountain Village are along the Yukon River.
operated with two separate power plants. Over the last 10 years we were able to build a power line
between the two. There is a gravel road so it made it a little bit easier for access.
We put in a 900kW wind turbine. We built a larger power plant in St. Mary's that feeds both of them
so we've improved energy efficiency both in our diesel generation but we have also been consistently
those communities include Mountain Village, St. Mary's, Pickett's Point, and Andreski.
I want to compare that to another place folks might be familiar with. So 18 miles from St
Marys to Mountain village. It's also 18 Miles from Thane Road up to Okbe in Juneau.
A little bit different scenario as far as the amount of power use that goes on between those things.
If we zoom in to downtown Juneau, you can see familiar neighborhoods here.
You'll see that I've circled the Capitol building, the Dixon Courthouse Assembly building and the
state office building across the street. And if I put those buildings and their power use throughout
the year on the graph that i showed earlier of the communities of Avesque,
you will see the buildings themselves consume more energy than most of
The state office building that's across the street is equivalent to the amount of power in the facilities that I just showed you
For Mountain Village in St. Mary's. So in Mountain village in st. Marry's we have two airports
We have 2k through 12 schools. We had two stores.
We Have a subregional clinic.
We a clinic we
Have housing for I think 1,200 people and they use about the same amount
Of energy as the building across this street
So the power cross-equals ocean program is
for folks. And I think people get a little antsy when you say, well, now people are just
using too much power. I don't think the realities in rural Alaska, the economics, allow people
to use too many power, and it is a great benefit and should be protected at all costs.
Thank you, Mr. Stan. It's appropriate to note as we think about efficiently using funds,
than in those communities, so although the usage is much higher, the dollars are a lot less.
Thank you for that. So just in summary, why is electricity expensive in rural Alaska?
I can let you read through that, but it really is the distances that we have to cover,
the small economies of scale, all of our costs have
to be spread out over a very low amount of kilowatt hour sales.
remote and difficult to access.
I think I talked to some of my friends,
they're gonna probably talk a little bit more
about workforce and being able to maintain qualified folks
to do this kind of work.
It's a challenge.
So some our strategies to reduce costs,
the power is to improve generation efficiency,
minimize distribution losses,
interconnect our villages when we can
to create a greater economy of scale.
add renewables when we can capture and sell recovered heat.
I didn't speak too much about that, but there is a lot of heat that's given off in diesel
generation, and we have been successful in being able to port that out to other community
buildings and schools in order to displace some of the diesel fuel that they need for
heating buildings.
Promoting energy education and workforce development for our communities and supporting
economic growth are all critical to maintaining and sustaining reliable power in rural Alaska.
And I don't know if we're doing questions now or later.
We can do a couple clarifying questions
then before we get to the panel.
Is that a nodding?
I have a question.
Representative Edison.
You can think about it too.
I'll defer to Representative Holland.
Coach, you're Holland?
Oh, OK.
Great.
Thank you through the chair.
Just a high-level clarifing question
on the experience you see looking across all the villages
and projects, what role are renewable projects
supply power and the cost of power.
I noticed in that last slide we just looked at,
I don't recall seeing renewable projects
being a key part of that.
What is the current penetration of renewables
across the whole AVEC family?
And is that now to a point where it's stabilized
or is there still a growth opportunity?
And, is it contributing to managing the costs of the power
or, or does it now just diversifying it
so there's a little more liability?
I'm just wondering how renewables fits into the picture.
I think we're still just scratching the surface and the amount of renewable
penetration that could be built. It is very cost-intensive. We rely heavily on
grant funding to make those projects go forward.
We still have a number of projects that are in the pipeline.
We've seen a change in events over the last year, so there's not a whole lot of
Money is still coming out of the federal government as far as building out wind solar battery projects
Those sorts of things, but we have a number of projects. We were working with the tribes and I think
20 different communities to become independent power producers. They've received funding to build solar
energy storage systems. So as they build those out over the next five to six years,
we'll be buying power from the tribe at a cost less than what it costs us to buy diesel fuel.
So that creates a little bit of workforce development, keeps money in the community
and provides a lower cost of energy. The amount of penetration right now that we have
Coach, your hand.
Thank you for that.
Just curious at a high level, again, if 5% is current penetration,
if you look out 10 years, are we going to double at the 10%?
Does it become someday 40% this curious
in order of magnitude of what that opportunity or renewables
looks like down the road?
I think a key component there is going
to be what energy storage looks
like that seems to a burgeoning, you know,
seems they can store more energy for less.
being able to utilize solar for longer durations or being
able bridge the gaps between high winds and low winds.
We don't have a lot of hydro resources.
We have been looking into hydrokinetics,
a run of river sorts of things.
Any of those items that could provide base load,
like a diesel, would be beneficial.
Hydro can fill those voids.
But for wind and solar, it really becomes a challenge
to figure out how to fill in those gaps
when the resource isn't available.
And energy storage would be a big component of that.
So if I had to guess, certainly 10% is doable.
Beyond that, I think it would really depend
on what sort of energy, storage we would have to give up.
Thank you.
Thank You.
And I Think we can get more into this one.
We've got everybody up there too and get a variety of answers
on some of those system things.
Thank you very much, Mr. Sam.
So as we're changing out presentations here in the room,
I'd also like to remind folks that might not be in
the Room, that presentations are available uploaded to basis.
You can see some of those beautiful shots of rural Alaska
that not everyone gets to see.
So with no further questions, we will move on to Tom Atkinson, CEO of the Cotsabue Electric Association.
There you guys can do each other.
That looked pretty tropical for COTSabew.
Thank you. Just get our presentations up there.
might be following along at home.
My name is, first of all, I'd like to thank Co-Chair Mears
and Holland and the members of the committee
for inviting rural cooperatives here today
to share our story.
And we all know that a lot of the energy in the legislature is going to be tied up in
the natural gas pipeline and I really want to thank you for giving us the voice to share
our stories about rural communities that largely will not receive benefit from that natural
gas pipe line, which should be not opposed to it, but we want
benefit for all the laskets of these energy resources.
Having said that, yes, this is a picture that is less tropical than Cordova, and this
is springtime in Cotsabue, so it gets much worse than that.
As I said, I am the general manager of the COTSabew Electric Association.
COTABEW is the community of about 3,000 people.
We are a generation in distribution cooperative.
choice but to do both because we're a micro grid, we are not getting our power from any
other place.
I'm sure you guys are fully aware of that but I just wanted to go ahead and point it
out.
We're 31 miles above the Arctic Circle which you can only get in and out by air so that's
where we re at.
We have been in existence about 73 years.
Willie Hensley in his book, 50 Years to Tomorrow,
noted that it was a great innovation when the electricity came to
Kotsamew because they no longer had to light coffee cans full of
diesel to like the runway so the planes could come in.
Ever since then we have been largely dependent on diesel generation until the late 90s in the
late nineties. KEA began to develop wind energy first with 60 and 100 watt wind turbines and in
2012 we made a huge leap to a 2 900 kilowatt wind turbine and you see one of them in
One of the things that we needed to do since these were installed in 2012,
they're getting to be middle-aged. The average life expectancy of a wind turbine is 20 to 25 years.
One the main components in a Wind Turbine is a converter which converts the raw electricity into usable electricity for the grid.
It needed be replaced.
that came at a very high cost of about $300,000.
Fortunately, our partnership with the academic community,
the Alaska Center for Energy and Power,
allowed us to partner with them to receive a grant.
They obtained grant funding for us for the converters,
which we had installed.
So that's one of our strategies to continue to move forward
is to work with the academic community.
We continue do that on a number of different projects.
Of course, nothing is easy given the time of year
that we tried to do that.
And we did have some issues in terms of the wiring
on those, causing some overheating
and a couple of months down with our wind turbines
when we needed them to be functioning,
so we didn't need to burn as much fuel.
But as I point out on this slide,
producing electricity in rural communities is not easy. Anything that you
do in the rural community is twice as hard because of the distance, the work
force that we have. Some of people that
you see in this picture were technicians from our winter brine
manufacturer whose home base is in The Netherlands. So these people are coming
And again, that highlights the need that Bill mentioned earlier about developing a workforce
within Alaska that can respond to these types of needs.
opportunities that the legislature has to push money forward to
vortex or other institutions that can develop these types of
skills for fixing diesel generators or renewable energy
assets that would pay great dividends to reducing the cost
of producing energy in rural communities.
So with our wind turbines and also the solar farm, which I'll talk about later, and our battery storage,
we have the capacity to do about 30% of our electricity generation through renewable energy,
and I will put a caveat to that. That's when everything is working.
And in rural communities and milk can probably testify to that.
Not everything is always working all at the same time.
You're always facing some challenge to keep things going.
This is a picture of one of our three megawatt generators.
diesel generation costs are high due to costly repairs on a fleet of aging
diesel generations generators and I know this is not only true for a KEA but
many of the rural communities have aging or aged out diesel
generation which they are
basically hemorrhaging a dollars to try to keep in operation every year that's one of the key
things that we need to focus on. We cooperate together as cooperatives that is one our cooperative
cooperatives helped cooperatives.
We were in Cordova as co-chair mirrors was in October.
Clay was gracious to make his staff available to us.
We looked at their operations there.
They've been able to replace most of their diesel generation
with newer, less expensive diesel generators
and they've kept their fuel costs in half.
I'm sure I am probably stealing Clay's thunder here.
We thought, well, that's great.
So we have been working with them,
and we've been getting information about that,
how we can begin to do that.
So, we're very encouraged by that
and these generators are 22% more fuel efficient.
So that is the direction that we need to head.
And we been fortunate in that
we had grip grant funding and also other funding
from the Department of Energy
that has gonna help us do
years. One of the things that that real cooperatives deal with is aging
infrastructure.
The project that you're looking at here, which was completed in May of 2025, was replacing the
heat exchangers which were almost 40 years old that were on the outside of our diesel generation
plant that provide the cooling for all of the generators. This is something that we needed to
get done because if they failed during the middle of winter we would no longer be able to meet the
taking, but it was made easier by the fact that we have diversified generation assets
and we could keep the renewables running to at least power part of the town while we did
this project.
So I think that's one of great things besides the fuel savings for diesel generation of
renewables is that you don't have all your eggs in one basket.
to do our core generation, we're still 70 percent diesel generation. You have to go ahead and
bring in a lot of fuel. Last year we bought in 1.1 million gallons of diesel to apply that need.
And you never know what the pricing is going to be from year to year.
You've got one shot to bring the fuel up once a year, as Bill described.
And it is what, the cost is gonna be at that point in time.
We do lock in prices throughout about a five month period.
prior to receiving the fuel, so we try to see when the best opportunities are to lock
in pricing for the Fuel, and we tried to get the
best average price for our customers, for
our members.
We have been able to help the community in other ways with this fuel storage.
Because of our renewables, we've been able to go ahead
and rent or lease out a part of one of
our 1 million gallon tanks to a local fuel supplier
who is new to the market, who
is trying to compete against a more established fuel
provider that's been in the marketplace a longer
period of time.
They had no fuel storage.
So to create a work competitive market
arrangement with this fuel supplier and it is helping stabilize fuel prices in the community,
not just for electric generation, but as Bill mentioned earlier, people use the diesel to heat
their home as well. So Ms. Drack, we can take maybe 10 more minutes. Sure. Thank you.
Getting back to infrastructure projects we have aging transformers we only have
one substation we had one that was ready to fail so we replace that but all of
our transformrs are going to need to be replaced within the next three to five
This is a picture of our solar panels and they are providing a lot of good electricity
for us, beginning and about in this time of year through October as when we're going
to get the best production out of those and then it drops off during the winter months.
We did replace the inverters on there because the ones that we had on
there required too many software updates, too much downtime.
So we replaced those, we have more uptime on our solar now.
Of course, Bill also alluded to the need in all the communities for some type of storage as well.
We went ahead and purchased our first battery in 2015. It's a one megawatt battery,
and it has done well for us, but it's near the end of its life now,
and we have received funding through Senator Murkowski's office
and also through the Renewable Energy Fund to go ahead
battery and we're very fortunate that we can get a four megawatt battery in
there it will allow us to go a full two hours without any generation from the
diesel plant or the renewables to power the whole town so we are very excited
about that and feel very fortunately that were going to be having a larger
We also have another project that is in the planning stages now with the U.S. Air Force
and also a KEA. We're going to be working together on a dual use project for a battery
that will support a long-range radar site and community communication assets like cell phone towers
and radio towers and things like that.
It will be the first new use project of its kind.
We're very excited and hopefully we'll get this off the ground.
It'll also create another isolated grid for our community,
which is very important.
As I'll show you later, we have a lot of problems due
to fall storms and rising water.
We'll be also replacing an aged out transmission line
that the airport with our grip grant funding.
project is very important because this line supports five state and federal entities in
Kotzebue and we're very fortunate that we can finally do this. This has been an issue that
we have been chasing for close to 20 years to get this lines replaced. And here is a picture
I think that the picture says it all there.
That has been our community for the past two years.
We certainly have not suffered the problems
that communities in the Yukon Cuts Coordinator area did,
but we do have water in and dating homes.
making us question the sustainability on of our future on our current footprint.
So, one of ours asks from the legislature is also to continue as a long-term project
to look at how these communities can continue to be sustainable with these issues.
So Mr. Atkinson, you mentioned that there was a when we met earlier, a sea wall or a
topping and not only topping from the front side but water rising is coming
around on the back end so which leads me to believe that things are becoming
more extreme. That it was designed for historic and were regularly
surpassing historic levels.
Yeah, the native name for our community is Kikik de Gug,
and that means almost an island.
We're surrounded on side by three waters.
I've surrounded it on three sides by water,
and during the flood, actually, all of the exit routes
out of community were blocked and flooded.
Water coming over the runway, which is our lifeline.
So, yes, this is a problem that may trump all
of that. I'm explaining to you today, but it does not have a short term solution.
Some of our energy problems definitely are more short-term and can be addressed and we can make
progress. Thank you.
As I alluded to earlier, this is a picture of the proposed pipeline path, and I just point out to people that's not anywhere near where we live.
And if you look at the P and pipeline there, that little espits of land that goes out into the sound right there. That's us.
So we need to make sure that we're building a mechanism that makes this project benefit all communities in Alaska.
And just to takeaways from this, we want to make sure we focus on workforce development
as I talked about earlier.
We at KEA have come to realize that we need to have a balanced approach to generation
development.
When we first started developing wind and then solar and battery,
we thought, man,
we're going to
and over time we found that it's probably feasible to get to 50 percent, but 100 percent is hard
with intermittent sources like wind and solar. When other resources come online like a micronuclear
hydrogen, there is a good chance that we can get closer to that. But until then we have to make
sure that were balanced and taken care of our diesel generation assets as well as our renewable
The future low growth, the community of Kotzebue is seeing, building growth that it has not
seen in a long time, we're looking at a possible 10% increase in our demand and we are looking
at how are we going to meet that demand in the next three to five years.
The local native corporation is also building more housing in town.
New AC store was built in-town within the past two years.
It's using more electricity than it did before.
And we're just seeing that in a number of different places.
resilience. We need to make sure we develop infrastructure outside of the
areas that are being flooded annually. Affordability, we just need
to ensure that we continue to, make that were providing affordable energy for our
members and part of that involves, you know, helping us by doing things like
protecting the PCE and also making sure that the renewable energy fund is funded
annually.
and support. We need all the support that we can from the legislature.
We've been very creative in how we get our funding. About 75% of our
funding is federal. The next after that would probably be the state,
the academic community, the local native corporations.
has other local entities and KEA's even taking money out of their own pocket.
So we're not looking for the state to solve all of our problems but to continue to support
us in what we are trying to do.
I'm just trying provide electricity or support the people that do in a very small community.
I am not supporting almost 60 communities like Bill is with AVIC, but it's still a tremendous
we can get in doing that is important.
We are a hub community, we're the gateway
to the NANA region, which is rich in resources
that may be developed in the near future here.
And it's important to our state
that we continue to invest in
the infrastructure in these rural communities.
So that's all I've got.
Thank you for allowing me to speak.
Thank you, Mr. Atkinson. Yeah, just a reminder that there are a lot of programs
out there that have got benefits in different ways out
there. And I know it's a
lot to work to try and put all those pieces together to make things happen.
Yeah. One of those programs is through the
Alaska Energy Authority. They do have programs to help replace generators,
but it is for communities with a population of less than 2,000 people.
So we're kind of a little bit over that line with 3, 000 people
So, yes, there are some resources out there, some we can take advantage of,
some, we, can't.
Thank you very much.
Any questions before we move to Cordova?
Representative Costello.
Thank, thank you for being here.
You had mentioned in one of your slides that complying with state regulations can be challenging.
If there were any that you think would help and
if we need to look at some of those in order to make things easier for you just I think we'd be
open to that discussion. I'm glad you asked that yes we do do a lot of work with the Department of
closely monitor our emissions. In fact, they send us a bill at the end of the year for
the amount of emissions that we've put out into the air. And it is also very costly to
comply with the testing and sampling. I understand it's all for very good reasons, but it
is a very large part of expenses that have to deal with in diesel generation. So there
hopefully we can do we could lessen the the burden of the compliance. I don't
have any specifics for you right now but that is definitely an opportunity to
help save our own communities some money.
much for joining us here today. Thank you. So we will move down to our more tropical photo and
downto Cordova for Mr. Clay Copeland, CEO of the Cordoba Electric Association.
Thank You for hosting the APA conference this past fall and joining
us today in Juneau.
Thank you, co-chairs, mayors in Holland, and committee for the invitation.
My name is Clay Copeland, CEO of Cordova Electric Cooperative,
and also currently serving as the chair of the Alaska Energy Authority Board.
So I might sprinkle in just a couple AEA pieces.
So Cordova is a rural remote isolated micro grid,
but there are ways that it kind of differs from Cotsabews and Alaska Village Electric.
systems, and there's some similarities that we actually share with larger kind of rail
belt utilities.
So I kind wanted to touch on those because I think it kind
of speaks to some of the current challenges and opportunities in focus that
us legislators have on energy right now.
So this is just the Cordova waterfront and Cordovid does have a large industrial base.
And investments in energy by the community and the cooperative and by
the state and federal government have helped us build our energy
infrastructure and reduce our
energy prices. And that has supported our seafood industry and really
grown that industrial base in a beneficial way.
And it's also reduced pressure
on the power cost equalization program
because Cordova at one time was the largest recipient
from that program, but have been able to reduce our rates
and keep them somewhat flat, a lot flatter than inflation.
We have closed the gap between our rights
and the rail belt rates that they have risen,
so we've just been eligible for less and less credit
over time, and that's a great path
to kind of wean ourselves off that Program
and take pressure off
maybe a little more.
So I just, again, want to talk to maybe some side elements.
So Cordova is kind of a leading and innovating utility
because we have that industrial base and resources.
And I do want acknowledge we
have some of our professional staff and board in the room.
Emma Merritt is our finance manager
and Lafe Stavik is executive assistant.
And then Joe Cook has been our longtime board chairman,
but he's passed the baton to others on our board.
And Joe still serves on her CEC board
And I wanted to call them out because it's an ecosystem.
We have board support who are willing to take risks
and engage with the community and with staff,
and then staff that we all have our own strengths
and skill sets, but collectively,
that's given us a capacity to, you know,
innovate with better energy storage
and kind of next generation applications
to work with a Department of Energy
and our University of Alaska
to bring forward new technologies
usually try to be on the cutting edge of technology, the leading edge, but not
the bleeding edge. But we've had a lot of challenges and a
lot changes just in the global environment around us the last few years.
that we're still adapting to but you know the advent of social media, the pandemic,
and before and kind of after. And now the Advent of big data and artificial intelligence
is not only putting pressure on our infrastructure but just the social equation has changed a little
bit. But we've been kind adapting that through putting more focus on engagement with our customers
especially and businesses to better understand their needs through surveys and really amplifying
Our customer appreciation and annual meeting events where we can have attendance of up
to 20 to 25% of our entire membership engaged.
And that's really helped us to really focus and make sure that we're moving in the direction
that our community and businesses need us too.
And I'm highly collaborative with you as a state and the programs for the Alaska Energy
Authority, our own businesses and community, and also as I mentioned, the federal government
and their funding programs.
and really focusing on our strategies.
And so our strategy is to reduce energy costs
mostly through growing our sales.
And I'll talk to that on another slide.
But I'm also looking at the whole picture for the community.
How can we...
As Tom mentioned, having dual purpose facilities that can meet maybe an energy and a community
water need or an educational and recreational and energy need in the community and trying
to make sure we get them the best and broadest use out of these big capital investments
for the Community.
Got it.
What is it that we're looking at in this slide?
Okay, thank you.
Yeah, I have not talked a lot about the Cordova electric system,
but this is one of our two run-of-the-river hydroelectric projects.
It provides about 10% of communities energy,
but we are in the process of making some equipment upgrades in there
that, we think,
we can expand that output 40% with the same amount of water.
And that's really been our story over the last three or four years,
mentioned, we're breaking records for our fuel efficiency.
There are smaller units that the parts are more available and cheaper.
Our own staff are installing them and doing the maintenance, even the rebuilds on them.
So that helps internalize and help us manage costs, but also understand our equipment and
system really well and be able to manage it.
And so, these are on salmon creeks, so they're very low impact in kind of a model.
And as Tom mentioned, it got to be, we share very broadly across our industry.
So, I was talking to Lasco Village Electric Cooperative Engineers two weeks ago
about the data platform that we use that gives us 20 years of history,
right at our fingers, tips, and so forth.
So I don't want to over answer, but I'm trying to touch on some different themes.
run of the river project and we approach 70% of our community's power needs with that.
Really, just with some simple valve changes and efficiency upgrades, we're getting 15% more power
out of that project in the summer during our peak demands of seafood and as much as twice as
much energy out in winter just by putting more efficient valves in. So sometimes there's low
But what we don't have, and Tom alluded to this in contribute, is energy storage.
We don t have a dam storage element in our system.
And that means that we sometimes, you can kind of see a little bit of water spilling
over here and going downstream, at our other project, there s often a lot of
water.
So we have sometimes megawatts of excess energy capacity and nowhere to sell it until
data came along with an opportunity and I ll talk about that on another slide.
So this is just a top view of that small project.
So as I mentioned, our primary goal is to reduce energy costs
and the way that we can keep pressure off of rates is by increasing our economy of scale.
Now is Bill mentioned with AVEC that trying to spread the high cost of our infrastructure across
a small amount of kilowatt hours really puts pressure on your rates, especially when you have
excess renewable energy available. So some of the new technologies, this is one of
our facilities that we're heating with new air to hot water heat pumps. We have a test site
And I can't say their name because we're also under a non-disclosure, but we are testing
these on our facility and hope to roll those out sometime this summer when they become
commercially available and can help our customers offset their heating costs, which saves them
with their overall energy cost, that it also takes pressure off the electric rates by selling
more kilowatt hours.
So we also are looking at some electric vehicles of the data industry, of course growing opportunities
in our own seafood industry.
A lot of work, Emma has done some really innovative work
in structuring our electric rates to better grow sales,
still recover the revenue that we need to,
that give our customers opportunities
to maybe utilize air source heat pumps
more cost effectively, both our residences
and our businesses.
So try to help find that sweet spot
of growing economic opportunities,
in diversifying our sales and growing our
sales without increasing the cost.
So I want to talk a little bit about data and especially we've had a lot of these conversations now and are starting to understand some of the new opportunities.
This isn't the Bitcoin from several years ago where they're looking for five cent power.
This is a energy is in a scarce market right now. It's a commodity.
as we talked about this morning, so higher energy rates
aren't going to scare off the data industry, especially
in Alaska, where very often the cooling
is a bigger energy cost than the
data processing equipment itself.
And we have a very cool environment.
So if they're only using enough a third as much energy overall
to produce the same amount of data,
that means our rates can be higher.
And they are still very competitive in
Alaska.
high reliability on the grid.
That's something that Cordova with our underground power lines just has in our native power delivery.
So we were really good space to start the data industry.
And this speaks to it would represent about 20% of our power demands in the winter
in terms of the peak load and it will also represent
about twenty percent of annual sales.
So it kind of is somewhere in that neighborhood of like House Bill 529, for example,
is a significant load.
our board and an attorney to have special service agreement to make sure that
we are not putting new cost on the other customers that this and ultimately we want
data to be a benefit to all the customers in the community and to have a new industry to
diversify our economy as well. A fairly small data footprint would use about the same amount
of energy as our entire seafood industry. So that means we don't have to just hit our one industry
if we need to raise more revenues and seafood, industry has been struggling a little bit recently
So I think this is a good example of like a practical example in Alaska of how a potential
new large load user can come in and provides opportunities for the community.
And it seems like the relationship that you've had with Greenspark has been very collaborative,
not just to work with the energy, I mean, mostly to
work your energy utility and its systems to utilize extra power that
you have got at a time.
very collaborative in that process as well.
Yeah, they're in a slightly different space
and they are looking for renewable energy.
They want to...
they like to see social benefits to the community with their business in the
community. So they've been good partners. But also, we've, you know,
we're really collaborative as a cooperative.
So we know that the city has a fairly taxed water infrastructure.
So as we move through design,
we want to say, okay,
you have closed loop cooling and ambient cooling that won't put demands on our
existing infrastructure there.
Housing is very challenging. I'll finish up with workforce development here,
the challenges for us to get professional employees
from outside the community.
So.
On the one hand, you'd say, well, the data industry doesn't bring new jobs to your community,
but the other side of that coin is that they're also not putting pressure on housing
or other existing infrastructure. So we are very carefully trying to right size it because
if we tried to integrate enough data, ultimately, we're going to start burning more diesel fuel and
actually putting upward pressure rates. But we were trying find that sweet spot where by selling a
lot of our hydro that doesn t have a market now that puts downward pressure in everybody's rates
So, yeah, you do have to be kind of intentional there.
So workforce development and I appreciate it in the panel that we had
with the Alaska Power Association yesterday,
representative Holland brought us up that.
You know workforce development is our is as a manager of the cooperative. It's our number one challenge in the Alaska Energy Authority
We had our strategic planning last Friday
They're about 70 percent staffed for the projects and programs that they have right now
So and we look through that organizational chart and can see right to the positions that
Um, some of those large capital projects are going to create as many as 1500 jobs.
Uh, someone has to fill those positions and we would like to have that be
Alaskans and to, have their income and their financial activities stay in the
state.
So, you know, we're wrestling with new opportunities for employees to work
remotely or how, or commute or have flexible jobs,
So we do have some opportunities though, I think,
through our university program and our trade schools
to focus on the new infrastructure,
economic development, the energy that we're doing.
So maybe a little more focus
on engineering curriculums through the university,
through out primary education, our local schools,
clear down to fourth grade.
The employees that were born and raised in Cordova
that work there now, Latham and Emma both included.
When I talked to them about what brought you back to Cordova Electric, it was those fourth-grade
safety-city programs.
It was the field trips that we do with the grade schools and the high school, the lectures
that sometimes are asked to do in their classrooms, these summer work programs where we have
them work in our power plant or with our line crew or in the customer service office.
working there. So we as utilities can be doing a better job and I think you as legislators can
be signaling our universities and stuff that let's really be emphasizing the skill sets and the
jobs we need to fill going forward. And that's
really what I had me glad to answer any questions now or as a group.
Thank you. I thank you for the moment. Thank
audience as well. Okay, the other thing I forgot to mention on Workforce
Development is one really bright glamour is a hundred million dollars
Denali Commission funding for Bolt Fuel Tank Farm Upgrades in rural Alaska.
There are huge risks and liabilities out there.
The Alaska Energy Authority did a good job of doing drone coverage
and identifying and prioritizing, which are literally,
in some cases, feet from eroding river banks
and 30 or 40 years old.
So, but again, we're going to need the people and the tanks
and they contractors available to go implement that.
50 million of that is going
to be proctored by Alaska Village Electric Cooperative
and other 50-million by the Alaska energy authorities.
Thank you.
And then we've got our last presenter.
Thank you for coming, Mr. Chaney,
from the CEO of the New Chicago Cooperative.
We'll get your slides up and thank you
for sharing.
Please put yourself on the record
and proceed with your presentation.
to and through the chairs, to co-chairs Mears in Holland,
Will Cheney, CEO, GM, Nuschiat Cooperative,
and Dilling, M. Alaska.
Let's start by thanking the committee
for spending some very valuable time,
of your very, valuable, time with the rural cooperatives.
It is, we've been to Juneau a number of times,
as I can attest the rail belt usually gets a lot of the attention so this is this very valuable
time I'll try to make it make. So I'd also like to take a moment to thank Michael Riveto and Chris
Okay, I don't relish self-introductions, but in this case,
I think it's important because I consider myself a product of my community and my cooperative.
I was born and raised in Dillingham,
my wife was raised and Dilledham adopted into the community.
We've raised five children, all are presently short of the one who is starting college this year,
are residing in Dillingham. We put two through college and they've returned. That to me is
incredibly important and we've got two in in high school and middle school.
I've been at the Cooperative for 25 years, you can see the path there.
I started at Cooperative with some line experience and my goal was to obtain my certificate of fitness as a journeyman lineman.
I was able to do that and progress through the cooperative.
It's a path that cooperatives can claim a lot of success, not just with myself but with others.
Very important in the smaller communities.
Some more of the background, growing up in Bristol Bay,
of course, I participated in the salmon fisheries,
both set net and drift growing
up, it did get to participate in a togia carrying fishery,
which no longer exists.
That is one of those things that has effects
on our communities, for sure.
So, worked construction in Dillingham, both dirt work,
and general construction. I've seen a slowdown in those industries in our community as well.
Those opportunities don't exist to the extent that they did.
And then, of course, sport fishing owned and co-end and operated a sport fish camp that was
unguided and was guiding for others while that's occurring. So, more importantly,
cooperative and who we are and what we do. You can see on the left there the
thumbnails of our current board members and their times in service. I'll talk
about that a little bit in a minute but the cooperative itself we've got 20 full
time employees with nine vacancies. That number fluctuates a
providing electric telephone and internet.
We carried cable television as long as the internet allowed it to exist and as it has pretty much
around the globe, cable TV is struggling and we let that option go.
994 members right at 1500 meters over 97 miles of distribution,
we presently do not have any transmission like was previously mentioned.
11.2 megawatts diesel generation we are 100% diesel and that's we'll talk about that of course
as well in a bit but 2.7 million gallons of storage which holds our energy for the year we convert
energy and in electricity and supplemental heat. We've got a supplemental
heat system that one of my predecessors from years ago, Dave Bauker, implemented a
supplemental heating system, that provides that energy to both our city schools and elementary
and high school, as well as the Southwest Region School District office and a state maintenance shop.
And then, of course, we provide about $1.8 million in wages into our community annually, which is incredible.
Leadership and Cooperative History in our Community.
We began as a private company years and years ago, transitioned to a PUD, a public utility district,
and it was in 1964 that we became a member-owned cooperative.
That's a 62-year history in Dillingham.
very few businesses that can claim that in in a rural especially and in
dealing him. We have the fishery 125 plus years but we're we were governed by a
nine-member volunteer board. I thought I would have my longest serving board
member and Henry Stroob here. Henry has has dedicated 42 years of of his life
to our community and our cooperative as a volunteer.
Incredibly valuable, Henry is a true champion
for cooperatives and for our communities.
I wanted to recognize him for that.
Very important, member-owned, not-for-profit.
Community success is cooperative success.
That's another aspect that's hard to find
in the smaller communities,
a lot of business, of course, profit is the motive,
not the case with cooperatives,
ours is to recover enough to continue
to provide services to our community.
So I talked about it a little bit earlier,
but over time, as the cooperative,
we assumed the telephone provision in Dillingham.
I think it was 1974.
It was a member-driven initiative.
The service that we were enjoying was from an outside company and it was lacking so we
had some members get together in those early 70s and put forth an initiative to the cooperative.
They were convinced that the co-operative could provide better telephone service.
We bit took on the telephone and today we're still providing telephone.
We went through, I mentioned earlier, the cable TV provision and then have moved into
internet provision as well. I talked about the heat recovery and sharing with
surrounding businesses that's been incredibly important and in fact
important enough that I
received a text about it while we were waiting for this meeting out in the hall to get together
with one of the end users about to talk about that heat recovery system that they're using.
And on a much smaller scale, the used oil from our generators, we've been sharing that with a
few of our members that are using used-oil burners to avoid the cost of heating oil.
So I'll go over some of the regional challenges and then cooperative challenges, and we'll move into the successes. I tried to end on an end-on-a-high note
Some of that the Regional challenges things that affect Bristol Bay
credentials employees at the co-op and in the community
It's not just the Co-Op and finding linemen and Finding accountants and and
Finding administrators
It it is across the board whether it as the hospital or Bristol bay native association the the state DOT office
that that challenge has an effect on us on the on
the amount of services that our community can provide to the to
the other associated businesses.
Remote work changed many of the core businesses in dealing
him. What were some of
the higher paying jobs more stable positions in
dealing him have transitioned out of dealing
him and in some cases.
The the people that perform those jobs either.
take that job to another community and continue doing it or they move out right
and pursue that work somewhere else for someone else and in either case it has an
effect on our communities and and out migration to talent.
That's that's where it just goes implies it's trade elsewhere right.
Housing issues and the cost of construction in our small communities
managers accept positions at the co-op and initially turn us down because they
could not secure housing for their families. The bigger the family, the bigger
the challenge, of course. But that that is a reality that I think affects all of
us, all the rural communities, for sure. It has really shown up in Dillingham. I
heard we heard it mentioned earlier by one of the others as well. Here's here's
we would love to have our entire staff living in in our community to play their
trade and and we've we we succeeded in not outsourcing any of the jobs any the
permanent jobs thus far but it's becoming more challenging to attract and retain
talent at the higher levels the administrators the managers the the
Getting getting people to to
Pick up and move to rural Alaska is is a challenge that I have seen grow in my 25 years to co-op
So that's that certainly worth mentioning
The cost of doing business as we lose these people
That are that are out migrating or choosing to work elsewhere
It has a direct effect on the
on the services that are available in our community.
And that drives the cost of doing business up.
If we need snow removed, if we needed fuel delivered,
if our vehicles worked on,
if need carpenters to build something or plumbers
to fix something, the costs have risen dramatically
in the last few years.
Industry and flux.
Industry in Bristol Bay, certainly in Dillingham is salmon.
It's commercial fishing.
Happy to report, our two older sons are both permit holders
and the oldest is bought a boat.
And our third son fishes with them,
they're all on the same boat,
which is cause for concern at times,
but it's that industry.
I say that to, you know, we monitor that industry as closely as we can.
Things are changing. We just had a processor in Dillingham.
It was one of, if not the oldest processing facility in the state.
I think it opened in 1898. It hasn't gone away, but it changed names.
And just that shift after 125 plus year history to change owners is...
is a sign of the times, I guess, that insecurity.
So, but in that industry,
that that, industry and the load it provides
has shifted from canning salmon,
which was steam, diesel powered steam to fresh frozen,
which is market driven product
that's not what the market wants,
is to see the filet and in its pristine condition,
flash frozen has, has driven electric demand.
through the roof. Climate change, this one is, boy, you could spend a lot of time on this
one. What we found is the many, many facets of how it affects us. It affects
us locally in the heating and cooling of our homes. Fish returns the biology of
a region. The fire hazards, the fire risks in our region if we don't get a
cover over the winter, we dry out faster and now we're now
we are dealing with fire concerns. Water levels in the in
the river we actually had a year, a few years back where one of
the rivers was shallow enough that the sun heated it to the
point where the salmon could not transition into the lake that
fed that river and that has a very direct effect on the on
the runs and returns but the construction season of course
In the material availability, that's what we found is we're starting to hear
when we go looking for some of our products, whether they're wood poles or transformers,
how climate change is affecting the vendors and providers that deliver those materials.
The mining industry, the effects that climate
change has on that drives their price up, which trickles down to us out as an end user.
So, cooperative challenge, some of these are very hand-in-glove with what we've already
mentioned, but the effects they have at the cooperative level, the, I think, top of the
order, this single thread.
source of energy. Us being 100% diesel reliant is a threat today. It is more so a
threat than it has been in years past.
It's been our friend and ally for a lot of years but the way things are changing
that single threat is much more of a
threat that it's being. Global energy and
securities and again directly related to
global politics or conflict, shipping issues.
We have seen things on that global scale affect our access to energy.
And again, speaking specifically to diesel, it is a threat.
Fuel source and delivery.
We are part of a Western Alaska fuel group.
It's a contingent of five, if not six.
cooperatives that pool our resource our our quantity of fuel
On the market and and shop that around collectively it has paid off
Over the years it allowing us to shop a larger quantity gets us a better price for sure
Just one of the ways we try to try and hedge our bets there
Natural gas has been mentioned already, but the insecurities there
what happens to and on the rail belt has effects out in the bush.
So that is something we don't have access to natural gas.
But access too natural, gas has a direct effect on our cooperative over time.
So very much worth mentioning and in
the environmental aspect, Tom, Mr. Edkins
mentioned, you know, how that affects
the emissions, the testing,
Tremendous cost to the cooperative we spend at times depending on the on
the inspection schedules well over a hundred thousand dollars a year to to
satisfy our environmental concerns the testing and and the fees associated
with that strong job market in the utility sector when we years passed we
journeymen from across the country submitting applications, and this Alaska
is a destination for that for the individual. They want to come up, they
want a hunt and fish. As the market, the job market and the utility sector has
continued to grow, it's there are less journeyman-line men available, so the
jobs are paying more in the lower 48. The people that used to
to look for a job so they could hunt fish are now working in their home
states and vacationing in our state to hunt
fish and that has an effect on who we have
available to us. That that rise of material and
goods, the cost of materials and goods is increasing.
We're seeing 10 to 25 depending on the material.
Wood goods and some of the smaller stuff is on the lower end.
When you get into the copper and aluminum and steels,
we're seeing right at a 25% increase in cost to operate.
I spoke a bit about the cost of services,
contractors, insurances and regulatory.
That's something.
with the inability to attract journeymen.
Now we're looking for contractors
to come in and fill those slots.
And just as an example, I was looking
for I'm presently our journeyman lineman at home.
It was a year and a half ago I
was lookin' for a break and started calling contractors
in state to see if I could get a journey man on site
for week.
The number I got returned was $12,000
for weeks worth of coverage.
and I can't do that.
We're not going to do
that, so, but that's the reality.
That's some of the things we're dealing with.
Again, climate change, with the regulatory costs,
it's driving, we are literally,
our sole source of fuel is driving
a climate-change conversation.
That's, and I'll, when we start to talk about successes
and opportunities, we'll get into that a bit,
but that is one of the things that we need another answer.
So, Coach Earholland, I think I had a question.
Thanks, through the chair, you actually,
I thing started to answer the question
that I've been pondering since one
of your early slides when you had mentioned
you have nine positions open and you started,
I need to address that just a moment ago
in terms of you know, your,
Use of perhaps contract, but I just was curious given nine of
Nine positions out of what I assume would be 29 if you had everybody filled up. That's a lot of people that are in vacant position
I'm just wondering how that's affecting the operations the expenses of the utility
I mean it just that a lotta folks for you to be somehow what works not getting done or how are you getting it?
That that is
it it
it generates a
very many interesting conversations.
We have a lot of folks wearing a lotta hats
and it is an additional stressor.
On top of everything else we've discussed,
that is one of the things when I go into work in the morning,
that's a conversation I have with myself.
Who is going to be doing what today, to what degree?
And it...
It doesn't allow you to plan your days or even projects in some cases very efficiently and it definitely has an effect.
And I've tried to kind of speak to you because that is one of the challenges that rural Alaska I think is on the, as Clay used the term, bleeding edge of.
If it was a money issue and you guys are dealing with the same,
but if money wasn't an issue for us and we could pay more and attract those people and fill those positions,
that's one thing, but all the costs we see show up at the meter for
us. The question is, what can our community support?
That is a question that I am seeing changing over time.
the 80s and the 90s we
Were able to answer those questions much more easily. There was much there was more industry
I'll say the fishery was was a bit more solid there. Was construction happening there were jobs there
Opportunities and things are certainly changing
Thank you
Okay, so to speak some of the successes
Right out of a gate world's the largest wild sockeye salmon fisherry
We're right at $2 billion annually, providing 15,000 jobs seasonally, that 100-year-plus
history.
It's an amazing resource that the cooperative has supported since before it became a cooperative.
We want to continue to support that.
That right there is Bristol Bay in a nutshell.
We are very fortunate to be supported by a strong contingent of what we call the BBs, Bristol Bays,
Bristol Bay Native Corporation, the Bristol bay Native Association,
Bristol
all of the issues I just mentioned and and I'd like to say collectively we're
working on solutions we've we come together and form partnerships I'll talk
of some here in a minute but there has been workforce development issues grant
grant opportunities that may not be available to the cooperative but are
available for these other organizations that we we have seen work together to
strong trend towards workforce development, the BBN-C,
BBEDC provide interns, programs that with providing
employees that they have access to that we can use.
We've begun creating partnerships in those areas.
It is a regional success.
not ours yet. Battery and solar projects going in around the region. We're glad to see it.
All of these microgrids, you know, I think there are a lot of similarities in the conversations
that my cohorts brought to the table and everybody's looking for an answer.
In River Runner River, renewable energy investments that are paying off.
our neighbor that they've implemented and I believe it was 98 it's been online
since and doing amazing things for those three small communities. Iggy
Auggick has the in-river rib-gen project that's doing similar. On an
associated note the the Community Wildfire Protection Plan was just recently
developed through a partnership with BBNA and the Alaska Venture Fund and
Wildfires are becoming more and more prevalent.
If I remember the number correctly,
I think it was a 7,500% increase in acres burned
in Bristol Bay due to lightning caused fires
after a low snow year.
It was, it, was tremendous uptick.
And there's, there is a link there to the CWPP.
The cooperative was the partner in developing that stakeholder.
really good work, and again, an example of our region trying to find answers, collectively.
of the nine vacancies at the co-op.
We are growing the workforce through training
across the disciplines that we have.
I've got a fourth year apprentice at The Co-Op
that is doing a wonderful job.
He's also born and raised in Dillingham
and my all accounts look like he is one that will stay
once he gets a certificate fitness.
Happy there, we train our power plant operators
as well as our accountants and administrators
place that people want to come to work. Strong history of providing much needed energy and
communication needs of our connected communities. I talked about that earlier.
I have seen since before my involvement with a cooperative, it step up to the plate.
in about any instance where there was a need in our community,
whether it's taking on the telephone, taking
on a cable TV, we've, I'll talk about a broadband project
here coming up, but our member owned not for profit
is anchored to the community.
to the broadband through a partnership with with our Village Corporation Sugaring Limited successfully completed $29 million
middle mile fiber project, extended the fiber from leave lock over through
Echoock on the new Shigak River into into Electnigik and then on to Dillingham about 80 miles of of open
Thundertrain very challenging project. We didn't get the winter we needed. So
As things happened in rural Alaska, it took longer than it needed to.
It drove the costs a little out of out-of-kilter, but we managed to complete that.
That project has already been shared with our neighboring region on the YK.
Through a partnership with Bethel and Native Corporation and GCI,
they extended that fiber from Dillingham, sub-C up into 13 communities in the
That is a foundation for our future communication networks
in those two regions.
Incredibly important resource that will allow for some
of the growth, it's an answer to some of our needs
and questions and needs that we're seeing.
And very recently, as recently as last week,
we've also received a provisional word for bead funding
to connect the communities of Clark's Point in Manicotic
to that very same fiber network.
The money that is out there is very important
to get ahold of now.
We are trying to anchor as much of these resources
we can into our region so that in the future
they will be available to not just the cooperative
but other communities as well.
And we're going to switch gears and talk about energy.
The cooperative since 2017 has been looking into New York Ochudro.
Very interesting project.
It was one that I approached as a manager initially with skepticism, having been born
It got my attention as it has many others, but the cooperative has since
invested six point two million dollars member capital and another two and a half million in grant funding in in pursuing
New York, okay, drill thanks to a a our F 13 and 14 very important resources for that feasibility assessment
That's one of the things the co-operative realized it is challenging to get
study funding
for these projects. People want shovel ready, and I understand that, but for rural Alaska
in a case like this where it's salmon and or renewable, there is a level of work that
has to go into it that removes as much doubt as is possible, or it will not fly. It will
AEA and Denali Commission came through and we are.
at the stage where we are ready to submit a draft license application to FERC.
We've completed the two-year study season once the draft
license applications is submitted and that is waiting on my review.
Once that's submitted to fERC, that kicks off a 90-day comment period
and review for FERSC, at which point after that eclipse we will then file a
So some of the numbers, some some
of their reasons I'll say we're looking into hydro and and other other forms
are renewable hydro in this we've looked into two other hydro resources in our
region in Grant Lakes and Elva both in the Woodtick state park both smaller
resources than New York and the the
Cost benefit just wasn't there smaller small enough resources with a high enough price tag that
The the recovery wouldn't just wouldn't pan out new cuck is is a bit different
But we've also looked into wind with reap we scored a three on their scale of one to seven in in wind quality
but it's just
That math doesn't doesn' t work either, but
to look at our future on diesel generation.
You can see the up in the top left there.
It's extrapolated out over 10, 25, and 55 years,
and then directly below that.
And we spent, we got our 1.3 million gallons this past summer, spring summer.
And it came at a cost of 3.5 million.
The industry wants a check for that.
What used to be a line of credit, and then how now is turned into get a loan and write
us a cheque.
That's, that's.
one of those hurdles with fossil fuels that has shown up recently.
But you can see how it plays out over the years and those numbers do not include
the maintenance emissions and the bulk storage costs.
I think I mentioned earlier the cost of our fuel tank inspection was right at $500,000
this last summer for two tanks, two of the four.
So, Mr. Chaney, I'm looking at the clock
so if we can get through our project quickly
and then we could,
I can see some.
nods in behind you, folks that have some similar issues that we can all talk about.
I think I'm on my last slide, I believe, but just to give an overview of a region,
bottom left corner, you can see a Lechnigik there with a yellow line coming to it.
Dillingham is basically right off the bottom of the screen there. I apologize for that.
The horizontal green line from Leichnagik to Equaak to the white dot in the
bottom right corner. That...
that tracks with our fiber line that I mentioned earlier,
that about 80 miles from Leavlock, Equoc,
Electnigic to Dillingham.
And this green line is the proposed transmission line.
We're right at about 50 miles when you're heading north
and west, and then straight north up to the top.
The gold stars where the new cook falls is.
One of the key aspects of a transmission line like this,
first of all, transmission lines are cheaper than bulk fuel
storage across the board.
Every time one of our bulk, bulk-fuel plants in pick the place
has an issue, it falls to the state often to recover
from the emergency, whether it's a leak, a spill,
or emergency repairs.
Those are tremendous costs that a
system in in region could could help alleviate. But we picked this route for a
couple reasons. One following that fiber route, it's been permitted. It's
been studied. We've already received easements for that route.
But also it gets us over to the Nushigak River. You can see by by this map we
around or near the waters, whether it's river or lakes.
All of these communities like New York, New studio,
Caligonic, and Livelock are all on rivers or Lakes and or
Lakes.
So getting a transmission line that a project like NUCA
could create near or the river speaks to future developments.
Also, the vast expanses of land that that transmission
line crosses opens up possibilities for supplemental
renewables.
keymuck mountain there where the line goes from north and west to north. That rock promenatory
possibly windmills, possibly south facing solar panels. Here's a here's
a depiction and I believe this is the last slide of the the site at New Yorkuck Falls.
These are, this concept, these are the parts it would take to create a hydro site.
So airstrip for for operation and construction the powerhouse tail race intakes and so on
We're dealing with a low-head resource at about 24 foot ahead and require about 1,800 foot pen stock
Right at 6,000 cubic feet per second flow capacity
170 foot wide intake and that's important because
The dynamics of the river at 170 feet
across, we could control the intake velocity to
adhere that one foot per second, which would allow
us mold to swim away and not become entrained.
We were looking at two five megawatt
Kaplan turbines, fish friendly turbines.
And it could generate up to 34,000 megawatts
hours annually,
which covers our region, our Dillingham's 19, 000,
and our regions, the other connected communities,
energy needs as well.
That's what I've got.
Excellent.
Thanks so much.
Let's take a brief video so I'll return,
pull some chairs up.
We are back on the record with house energy and we have a full panel in front of us
so do we Have any members of the many of
the committee that want to
Kick off a question. I got some queued up, but I'm leave that to the Committee first representative Costello
Thank you very much. It's been very interesting
To have you here. Want to thank the co-chairs for having this opportunity today
So, as we know, there's just one division that's necessitated in our constitution or
named in the constitution, and it's the Division of Community and Regional Affairs.
And we've had a department named that, but it is a division now.
And I was just curious, do you ever work through the division or does the
communication or are they just solely looking at local government relationships?
Through the chair. Thank you. Through
the Chair, Representative Costello, no, we haven't engaged, but if there was an opportunity,
it'd be very interesting.
Yes, as a former city manager for the City of Kotzebue, I can testify that the DCRA does work
more through the municipalities than co-ops. I don't know that that's a relationship
that has been built, but it might be something that we could explore.
And just one other question. Do you want to keep going down, Mr. Copeland?
It looks like they all shook their head now.
Mr. Cham as well.
Yeah.
Not much.
Thank you Representative Costana.
Thank You.
I was curious and I'd asked this before.
Are there regulations that we could be looking at that would.
Make some of your challenges easier without.
You know, watering down the intention of the regulation.
Mr Copeland.
Actually, I think there's some paths for state regulation instead of federal
The state departments tend to understand our regions and challenges and opportunities a lot better, a
lot more streamlined. And I think there are some regional opportunities for the state to make land
selections, especially for a service in BLM, because their permitting processes are much more
friendly. I don't think that there's any compromise of the environmental requirements. In fact, it may
Really get it the the key stakeholders and so forth
Mr. Chaney. Thank you through the chair representative Costello. Oh, sorry. Yeah
Absolutely, and thank you for asking that question
through our fiber project the
the route that was depicted on the map that 80 miles roughly 80 Miles from Lee block to Dillingham
We are paying the Department of Natural Resources roughly $24,000 in an easement fee for developing a communication network that is very much needed a resource to our state.
That cost ends up squarely with all of every one of our members.
It does have an effect on the way we conduct business and the rates that we can recover to pay for those.
But if anything, the support from the state in developing these projects and alleviating
any of the costs that possible would certainly help immensely in the planning and execution
of those projects.
Thank you, Representative Costello.
You have any follow-ups on that?
Thank You very much.
Representative Edgman.
Yeah.
Welcome, gentlemen.
Good to see you again.
So PCE, a couple of years ago, we passed legislation to increase the usage rate per residential consumer from 500 to 750 kilowatt-hours.
And thank you, Mr. Leesack, for letting me know yesterday that the annual cost of PC has sort of ballooned $48 million if I remember the right number of being.
And some of that has attributed to that increase on KWH rate from $550.
But I was wondering, Mr. Copeland, you're the chairman of the
Lasque Energy Authority Board, is that attributed to more widespread use?
Is it like 84 communities or something like that that benefit from the PC program?
Or is it just the larger communities?
You know there's a lot of spark means that don't even get to 500 kilowatt hours, right?
They don t have a washing machine or a dryer, maybe they got a small freezer,
a lotta communities that have, you know, more appliances, bigger
stuff. But it's just interesting to get your perspective
on it if Mr. Copeland, if you
have any insight into that. Mr Copelan. Yes, thank you.
Representative Edgman, out through the chair.
And I'll be careful how I answer this because there's some AEA answer and there is CEC answer.
So I would say as a CAC as user of the PCE program, I don't think we've seen an increase
in our average residential use, Emma, we're holding pretty steady there, so I
don t think people are using more and that average use is about 500 kilowatt hours,
so many of our customers don' t reach that threshold.
I will say from the Cordova electric perspective, so I'm not just wearing my AEA hat,
the AIA has been significantly improving that program.
Frankly, it's being administered a lot more carefully now,
and that means that they're approving community facility use applications
that some were submitted three and four years ago.
Cordova is one of those and they're now paying those so I think the program has
improved but there's been a little bit of cost to that because the eligible
recipients are actually receiving the full benefit there.
Then on the AEA side, when we discuss this just in our strategic planning, there's upward
and downward pressures and we're right at 99% of the eligible funding.
So we see there is some upward pressure, if fuel prices rise, then we are probably going
to go just a little bit over.
But there are some downward pressure and again the rail belt floor is rising.
lessens the eligibility of the recipients
and takes pressure off.
So I would just say that there's upward
and downward pressure, but not a lot, either direction.
And they're just right at the eligible funding,
partly because it's been administered better.
We have not, Cordova actually seen
more kilowatt hours, I think, being,
because of that change of legislature fees.
Thank you, Mr. Cheney.
I saw you looking like you might want
to say something as well.
Through the chair, thank you, Representative Edgman.
That is a great question, and maybe it's
because we don't have a renewable,
and we are 100% diesel.
The cost associated with the other form of energy,
I'll say, in diesel, being what it is,
we have seen that additional 250 kilowatt hours consumed,
and I will say much appreciated from our members.
provided some relief from and and whether it's electric heat
the
We don't we don' t get into that to that level but but it has been consumed it
Has been used by our members for sure. Thank you, mr. Stan
Thank You through the chair
Similar clay we have not seen an increase in
is a 50% increase over the 500 kilowatt hours that was there before.
So when we talk about a balloon of the PCE costs, I think it's only gone up by 19 or 20%
since that has happened, and it is highly dependent on the cost of fuel.
So if there's a rise in the increase in fuel,
I that's going to move the needle a little bit more than that threshold for residential consumers.
What we are seeing is that that energy was used before it was just never reimbursed from PCE.
We still see the same average use for residential consumers, but in the winter time
there have been peaks where when they are also paying for a lot of diesel fuel to heat their homes.
They're also using additional electricity both for light and heat if they need to supplement.
The convenient thing about an electric utility is that we carry the cost for 30 days and
sometimes people need that bridge and they will turn on their electric stove or turn
on the electric heat rather than being able to go down to the store and buy diesel fuel.
But I don't think we've seen a drastic increase, but I do appreciate that 750 kilowatt hour
peak because it's in the winter time when people are most in need and have so many other
expenditures that they get a little bit more relief.
Mr. Atkinson. I
Would just say similarly I don't know we've seen an increase in residential usage, but the economic
Relief that has been provided by the additional
Kw's
has really helped our community and
You know, I think that that it's been very beneficial for our communities. It's greatly appreciated
Hope it stays in place
Thank you representative and you have another question
Well, just a closing comment, it's in statute now, so it would take a bill to change it and
I don't see that happening any time soon, but the reason I asked the question, I really
appreciate the varied responses because, you know, intuitively I can tell you it is tied
to fuel just with my experience being out in Dillingham and whatnot.
But the last PC report I saw, and it probably comes out later on, or maybe the next month
the annual PC report from the Alaska Energy Authority actually showed about less than 300
kilowatt hours if you average it out through all the communities. But that increase in 500 to 750
in certain places really has had a very noticeable benefit to the community, the consumers, whatever.
So thank you for going down that direction and unfortunately I have to leave Madam Co-Chair
Thank you very much.
So we're getting towards our last two minutes here and I'm sure we can continue for hours
but we will not do that.
Do any of our rural utility folks have any concluding comments or final messages you
would like to leave with us with today?
Mr. Chaney?
to the committee. I'd just like to again express my gratitude and I'll say our gratitude didn't,
oh sorry, in inviting us here. The climate being what it is, there are plenty of challenges.
It's something that we're very familiar with in the in The Rurls. We've been dealing with these
assistance, any attention we can get at this level is very much appreciated. This is one of
the partnerships that I mentioned. I would like to see us take advantage of in the future if it
Thank you very much. There's a few points I wanted to make sure that were made today and
They were not only covered by one presenter by but by multiples
So I think that some of the work we've been doing in the committee has brought together some lights
Like the benefits of having more than one fuel source for example and being able to have diverse communities
Energy sources so any final things before I do my concluding business mr. Copeland
Yes, co-chair mirrors. I just like to thank you and your colleagues for the engagement is bring new bills forward
you know
Vetting them and giving us an opportunity to comment and try to improve those
Your work off session visiting community is visiting energy sites educating yourself
It's it really shows and I think helps
Improve the way that we work together. So and you're engagement
This committee and others in the panels yesterday
and this morning for the last power association here. Thank you very much.
Thank You very Much. We really appreciate your time. So that concludes our business for today.
Next Tuesday we will have a delayed start of 1.30 p.m. so that we can do, I think that's for a
It's schedules for our presenters, so congratulations.
We've got a half an hour.
We can do other things between a 1 and 1.30.
We'll be hearing from Dr. Curtis Thayer on House Bill 164,
which is annual net metering, if I'm remembering correctly,
as well as represented the Ted Eisheitz
House bill 257.
We had been talking about amendment deadlines
for next week on 259 and 252,
so the large energy use load and the electric.
utility fire prevention plan. At this point we've been having conversations
and we're doing some other work on the bill so at the moment no amendment
deadlines in the committee. We will find time to take up HJR 27 next week and
we'll we will see when we can make that happen but for today there's no
further business in front of the Committee. And we are adjourned at 3