Anchorage Chronicle – Thursday, Jan. 2, 2003 – Page 3A
UTILITY LEADERS DISCUSS NEW ANCHORAGE-KENAI INTERTIE
By Heather A. Resz, Staff Writer

Representatives of Railbelt utilities meet at 10 a.m. today in the Chugach Electric Association boardroom to discuss a southern intertie project.

Chugach Electric spokesman Phil Steyer said members of the intertie participants group may set a "decision date" by which each utility must decide whether or not to participate in the Anchorage-Kenai project.

The Jan. 2 meeting is open to the public, and public testimony is limited to five minutes.

The $100 million power line would provide a second, larger electrical link between the Kenai Peninsula and Anchorage: About $70 million in state funding has been ear-marked for the project - all that remains of the $230 million Railbelt Energy Fund established after the Susitna hydro project fell through in 1986.

"This is an important project that is going to have 50 years of benefit," Steyer said.

He said the goal is to be able to generate power using the cheapest combination of hydro and natural gas generators, and move it to where there is demand.

Adding the second transmission line would benefit utility customers by improving reliability and reducing costs to produce power, Steyer said.

"When you flip on a switch, somewhere on the system there is a generator that ever so slightly increases its power to turn your light on," he said. "We provide service at the speed of light in direct response to the switches customers control."

Chugach Electric built the existing intertie line in 1960 to carry power between the Cooper Lake hydroelectric plant and Anchorage, Steyer said. It was not meant to handle the demand for power that exists today, he said.

An environmental impact statement for the intertie has been approved for a submarine cable across Turnagain Arm with a landline that would run along the Kenai. Peninsula coast.

Critics say the cost of the proje exceeds its benefits to utility ratepayers, who would fund the bulk of the $100 million project as taxpayers.

Ray Kreig, a former Chugach Electric board president and critic of the project, said he is concerned that the cost-benefit analysis for the project could be based on erroneous information.

While he was president, two reports by the same firm were issued with different benefit numbers. [correction: he was on the board at the time but had not been president for a year] 

A March 1998 report listed $143 million in benefits, while a confidential February 1998 report to the Chugach ct Electric board found benefits of only $57.7 million.

Chugach Electric released the internal February 1998 report Dec. 6, 2002, at the request of Chugach Electric board member Chris Birch.

Steyer said the reports show different numbers because different models were used and a different group of customers was considered.

The study the environmental impact statement is based on considers overall benefits to the whole Railbelt area, he said. While the internal Chugach Electric study only considers how the intertie might benefit Chugach Electric's customers, Steyer said.

"We've looked at the numbers three different ways. All of them indicate there are benefits for customers," he said. "We think it is wholly appropriate for the state to invest in vital infrastructure."

More information is available online at http://www.chugachconsumers.org/si.htm

Heather A. Resz can be reached at
hresz@anchoragechronicle.com   or 348-2432.