Answers to common questions about Juneau's energy crisis
Q. What exactly started all this power rate consternation?
A. Juneau was cut off from its biggest source of inexpensive hydroelectric power when a series of four or more avalanches on April 16 damaged seven transmission towers - destroying three - that connect Juneau to the Snettisham hydroelectric project, leaving it to rely on backup diesel generators.
Q. So how much will that make my rates go up?
A. Under an order issued April 25 by the Regulatory Commission of Alaska, they'll go up 447 percent starting May 1. The current residential rate of $0.125 per kilowatt-hour will go up to $0.561 per kWh, including taxes.
Q. Will Juneau's sales tax apply to the increased power bills?
A. At the moment it will, but a proposal to exempt the increase from sales tax is pending before the Assembly.
Q. When will the increases take effect?
A. Bills going out May 1 will include the increase, covering the previous 30 days.
Q. Isn't a retroactive rate increase unfair?
A. The rate increase has been approved by the Regulatory Commission of Alaska, a state agency tasked with ensuring that public utilities charge "just and reasonable rates." AEL&P officials have said the first consumers to pay the higher rates will be the first to see a decrease when they go back down.
Q. How long will the high prices last?
A. The emergency $0.561 per kWh rate will last until May 30, with a new rate adopted by the RCA beginning May 31. The new rate will likely be somewhat less, but high rates will continue until the transmission line is repaired. Normal rates will not resume until hydro power is restored, estimated to take three months.
Q. Who exactly is AEL&P?
A. Juneau's city utility was incorporated in 1905 by local businessmen. Juneau's Bill Corbus, a descendant of one of the founders, remains the largest stockholder.
Q. Is AEL&P public, private or nonprofit?
A. AEL&P is a private, for-profit utility. That makes it an unusual animal in Alaska, where most residents get their power from a utility owned by its customers, generally through government entities or cooperatives.
Q What other types of ownership are there in Alaska?
A. In Sitka, the City and Borough of Sitka provides power. In Kake, Inside Passage Electric Cooperative provides power. Interior residents of Fairbanks, North Pole and other communities get power from Golden Valley Electric Association, a not-for-profit rural electric cooperative.
Q Why does the loss of the transmission line mean rates go up?
A. Snettisham provided most of AEL&P's hydroelectric power, without access to that power, the utility now relies mostly on backup diesel generators - at a time when diesel prices are at record highs.
Q. What does diesel fuel cost now?
A. Fuel oil is costing AEL&P $3.81 a gallon. It was under $1 a gallon not too long ago.
Q. Does AEL&P have other hydroelectric plants?
A. Yes, three small plants in town. Gold Creek, Annex Creek and Salmon Creek continue to provide about 21 percent of Juneau's power.
Q. What exactly is Snettisham?
A. The Snettisham hydroelectric project is 40 miles southeast of Juneau. It is a lake, small dam and powerhouse built by the federal Alaska Power Administration in 1973 to provide inexpensive power to Juneau.
Q. Who owns Snettisham now?
A. The Alaska Industrial Development and Export Authority, a part of state government, owns title to the project. It purchased it from the federal government in 1998. AEL&P is required to pay off the purchase bonds as well as operate and maintain the facility. AEL&P also has an option to buy Snettisham itself, but has so far not chosen to do so.
Energy Q&A
Here are some of the many questions residents and businesses still have regarding Juneau's energy crisis:
Q. Why doesn't AEL&P replace vulnerable Snettisham transmission towers with an undersea cable?
A. Cost and time. Submarine cable is both expensive and specialized to lay. Alaska Electric Light & Power Co. spokeswoman Gayle Wood says it cost $7.5 million 10 years ago to lay three miles of submarine cable across Taku Inlet, and a Norwegian cable laying ship had to be brought in to handle the task. No estimate has been made as to what it would cost to run the 40 miles to the Snettisham Hydroelectric Project. Also, undersea cable has a shorter life span than towers, and break as well.
Q. So why not bury the power lines on land?
A. It is prohibitively expensive, especially across rugged terrain. Buried lines don't last as long, either.
Q. What is the power rate now, and how is it calculated?
A. For residential users - business are too complicated to explain here - each customer pays a base rate of 9.7 cents per kilowatt-hour, with a cost of power adjustment (COPA) of 43 cents for the extra cost of diesel fuel. The total rate, including sales tax, is 54.5 cents. The Juneau Assembly has waived sales tax on the COPA amount.
Q. How long will the new rates last?
A. Emergency COPAs granted by the Regulatory Commission of Alaska last 30 days and can be renewed. AEL&P officials haven't given a precise amount for the COPA they'll request next month, but have said it will likely be lower, maybe by about 10 cents.
Q. Why will the rate decline next month if we're still on mostly diesel?
A. The initial COPA had to cover fuel used from April 16 to May 30, while the next will be just in June, four weeks instead of six weeks.
Q. Are cruise ships going to be driving up our power rates now that we are short on power?
A. No. Cruise ships buy surplus hydroelectric power, and there's no surplus power these days to sell them.
Q. Why not lay a big extension cord along the ground, or is that a stupid question?
A. An insulated cable which can do that is made, but it is not readily available. It would take months to order the lengths necessary, according to the Alaska Industrial Development and Export Authority, which owns the transmission lines.
Q. Will the new Lake Dorothy project help lower rates?
A. The new generating plant will provide enough power so Juneau won't have to run diesel generators, and leave extra power left over to sell to cruise ships and the Greens Creek Mine. Profits from selling surplus power help keep down Juneau rates and result in less pollution and help businesses. It won't go on line until next year, however.
Q. Will the addition of Lake Dorothy make Juneau's power more reliable?
A. It will do that, too. The transmission lines from Lake Dorothy will take a different route most of the way to Juneau and one avalanche would unlikely be able to take out both lines. "That's the beauty of Lake Dorothy," said Gayle Wood, AEL&P spokeswoman. The transmission lines will meet on the other side of Taku Inlet, and run cross the inlet underwater.
Q. Will net metering solve the Juneau power crisis?
A. Not immediately, and maybe not at all. Net metering is the process by which small electricity producers can sell their power back into a utility's grid from sources such as windmills, solar panels, small hydroelectric turbines or tidal energy.
"My gut feeling is there's not a lot that's going to come back to the Juneau grid from small producers," Wood said.
A few local residents are known to be exploring options, but none appear to be close to beginning construction.
• Contact reporter Pat Forgey at 523-2250 or e-mail patrick.forgey@juneauempire.com.
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