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RCA releases transmission report

A yearlong analysis of the Railbelt transmission system concluded the transmission system in the Railbelt could be managed and operated in new ways to better serve Alaskans.

On June 30, the Regulatory Commission of Alaska released a letter to leaders of the Alaska Legislature containing its report on the Railbelt transmission system. In 2014, the Legislature provided $250,000 for the RCA and charged it with determining "whether creating an independent system operator or similar structure in the Railbelt area is the best option for effective and efficient electrical transmission."

In the Lower 48, independent system operators have been created over the past decade and a half to enable the most efficient use of transmission and generation assets. The Railbelt is considerably smaller than the typical area encompassed by a Lower 48 ISO, and while the RCA felt the ISO model may consequently be overly complex for the region it concluded the area could still attain many of the benefits.

In the view of the report, many benefits could be achieved by creating a new organization to manage the transmission assets of the Railbelt. Those benefits include the ability to plan, finance, construct and operate upgrades and additions to the regional transmission system. A grid less-restricted and more-capable of moving power across the area would help shift the Railbelt toward the goal of "economic dispatch." In that model of operation, the most-efficient generating units are brought online in sequence to meet customer demand – without regard to ownership. Studies have shown that practicing economic dispatch would save Railbelt Alaskans tens of millions of dollars annually.

The RCA report contained five findings and associated recommendations, summarized below.

Finding 1  The present Railbelt electrical transmission system requires institutional reform.

Recommendation No. 1 An independent transmission company should be created to operate the transmission system. In addition, the RCA should be granted siting authority for new generation and transmission and granted explicit authority to regulate integrated resource planning in the Railbelt.

Finding 2  Although energy sales between utilities take place, true economic dispatch of generation units across the system does not occur.

Recommendation 2  The RCA should use all the regulatory and statutory authority it currently has to strongly promote economic dispatch. Initially, voluntary loose power pools should be encouraged, with utilities reporting to the RCA on the costs and benefits as tighter pooling evolves. Lacking voluntary efforts, the RCA should take steps to achieve system-wide economic dispatch.

Finding 3  Many past efforts to reform and rationalize the Railbelt electric system have failed.

Recommendation 3  The RCA believes the utilities must be given the opportunity to succeed before compulsory steps are taken.

Finding 4  Reliability standards for the Railbelt electric grid are voluntary and not all electric utilities have adopted the same standards.

Recommendation 4  Enforceable and consistent Railbelt operating and reliability standards are necessary for consistent, safe, reliable and efficient operation of the Railbelt electric system.

Finding 5  The first four RCA recommendations above will be challenging and time consuming. Obstacles exist, and full implementation is likely to take years. RCA resources will be stretched to achieve progress.

Recommendation 5  If the RCA receives the necessary support from the Administration and Legislature to pursue the goals identified in the report, an adjustment will be necessary in the Regulatory Cost Charge paid by customers to fund the Commission.

Many of the conclusions in the report are in line with what Chugach has been saying publicly for the past two years.