Performance Details
Department of Commerce, Community, and Economic Development - Alaska Energy Authority
Mission
Reduce the cost of energy in Alaska.
Core Services
- Management and development of Alaska Energy Authority (AEA)-owned infrastructure.
- Assist communities and utilities in the development, financing, construction, and ongoing technical support of cost-effective energy projects.
- Reduce the cost of electricity for residential customers and community facilities in rural Alaska through the management of the Power Cost Equalization (PCE) program.
- Increase the safety, reliability, and efficiency of community energy systems through assistance and training.
- Lead and coordinate state energy policy and planning.
 Mission Results
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Core Services |
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Performance Detail
| A: Result -The cost of energy in Alaska is reduced. |
| A1: Core Service - Management and development of Alaska Energy Authority (AEA)-owned infrastructure. |
Target #2: Manage the Alaska Intertie for the benefit of Railbelt Consumers.
The Alaska Intertie allows Golden Valley Electric Association (GVEA) in Fairbanks to purchase electricity produced less expensively with lower-cost energy, such as natural gas and hydroelectric from the Anchorage and Kenai Peninsula utilities. This results in savings for GVEA consumers. GVEA"s savings have increased due to extended plant outages in the GVEA Region. GVEA expects savings to decrease in the future as it concludes long-term gas contracts (supplied through Southcentral power plants) and gas shortages will likely prevent new contracts in the near future. AEA, in conjunction with Railbelt utilities, is conducting a large scale Strategic Railbelt Transmission Plan for 2050. AEA is also working with utilities on multiple engineering studies for future transmission upgrades. Additionally, through the Infrastructure Investment and Jobs Act, AEA has awarded $12 million in grants for infrastructure upgrades for the Intertie which will result in better data collection, increased safety, and fewer outages. In the future, GVEA is expected to decommission Healy Coal Plant Unit 2. However, the anticipated closure is delayed until alternative sources of lower cost energy are available. Target Last Modified: 11/14/2024 |
| A2: Core Service - Assist communities and utilities in the development, financing, construction, and ongoing technical support of cost-effective energy projects. |
Target #1: 100 percent of Bulk Fuel Upgrade (BFU) projects completed.
Bringing facilities into compliance with federal and state codes and regulations also makes them safer and more reliable. By eliminating fuel spills from leaking tanks, a community can use all fuel purchased and avoid environmental cleanup costs. By following business plan terms, owner-operators are better able to manage storage facilities and fuel inventories to the greatest economic advantage. The chart above indicates the continuous progress toward the goal. Projects flow from the left side of the graph to the right, as they are identified as a project in need, then progress from conceptual design through construction, and are ultimately completed. Owing to increasing construction costs and inadequate funding, AEA is moving away from full replacement projects and instead focusing on the Bulk Fuel Maintenance and Improvement (M&I) program. Through the Bulk Fuel M&I program, AEA can determine which repairs are needed and provide a portion of the funds to perform the work. At a minimum, each community has a list of maintenance projects, an approximate cost, and a priority for each project. The cost of constructing a new tank farm range from $10 to $12 million. Based on current estimates, the replacement of all bulk fuel facilities would cost over $1 billion. Target Last Modified: 11/14/2024 |
Target #2: 100 percent of communities needing rural power system upgrades (RPSU) receive them.
At peak demand times the largest generator provides the power, while at low-demand times, or when renewable sources generate, a smaller generator may supply the power. AEA has also increased fuel efficiency by adding electronic fuel injectors and strengthening many other components to ensure reliability and long life. AEA has installed remote monitoring systems to improve remote technical assistance capacity. As you can see in the graphic above, progress toward the goal is continuous. Projects flow from the left side of the graph to the right as they are identified as a project in need. They progress from conceptual design through construction and are ultimately completed. The total number of projects varies due to many factors, such as changing community populations affecting eligibility for the RPSU program, and new needs arising. Due to rising construction costs, AEA is focusing on M&I rather than a complete replacement of powerhouses. Power plants and tank farms installed by AEA 15 to 25 years ago are in reasonable condition, but suffer from deferred maintenance and upgraded technology. As such, AEA is assessing the needs of specific locations to determine whether the infrastructure needs maintenance or full replacement. The cost of constructing a new powerhouse range from $5 to $7 million. Based on current estimates, the replacement of all power plants would cost over $300 million. AEA has been using the Diesel Emission Reduction Act to replace diesel gensets in rural powerhouses and at times, matching the sites with the RPSU Maintenance and Improvement program, currently focused on upgrading the control systems (programmable logic controllers, generator controls, meters, etc.). These improvements will result in a 10-15 year life extension of the existing control systems. AEA also repairs minor systems in the power plant where possible. Target Last Modified: 11/14/2024 |
Target #3: Power Project Fund (PPF) outstanding balance increases annually.
Between FY2015 and FY2023, the outstanding loan balance has exhibited positive growth owing to increasing demand for lending under the program, with a reported loan balance for FY2023 of $27 million at the end of FY2023. From FY2023 to FY2024, the loan receivable balance grew 16 percent, yielding a FY2024 loan receivable balance of $31.3 million. In the 10 years between FY2015 and FY2024, the loan receivable balance increased fivefold, from $6.2 million to $31.3 million. The increase in loans receivable from FY2023 to FY2024 is primarily due to loan disbursements totaling approximately $5.5 million in support of the development of two solar projects, one located on the Kenai Peninsula and the second located in the Matanuska-Susitna Valley, the latter is Alaska`s largest utility-scale solar farm. As a robust, low-interest loan program, the PPF provides an advantageous financing tool for eligible borrowers to finance projects including but not limited to the repair and replacement of existing infrastructure for the development of new generation resources. An added benefit of the PPF loan program is its unique ability to offer low-interest financing for both preliminary and later-stage projects, which generally proves difficult when pursuing traditional lending options. AEA is experiencing increased interest in the PPF fund with the clean energy tax provisions and federal grant opportunities. This incentivizes renewable energy projects around the state. Clean energy projects that meet wage and domestic content requirements are eligible for up to 40 percent of eligible project costs in tax credits. Certain projects in communities identified as energy communities and low income or disadvantaged communities are eligible for up to 70 percent of project costs in tax credits. The Inflation Reduction Act authorized Elective Pay provisions allowing entities otherwise not eligible for tax credits, due to being tax exempt. This includes state and local governments, who can claim certain tax credits for the first time. The United States Department of Agriculture is offering loans with up to 60 percent loan forgiveness for qualifying clean energy projects, and grants for up to 50 percent of eligible project costs for small businesses and electric cooperatives. The uncommitted cash balance, less loan amounts requested in applications pending review, is approximately $3.9 million for the PPF loan program. This current cash balance represents a low capitalization level. At $3.9 million, owing to the significant size of loans requested for recent projects, it is anticipated that this amount would be insufficient to meet lending demand for the program. Two recent loans, both for utility-scale projects, were requested at $4.9 million each. Loans are a primary funding source for renewable energy projects, and require cost matching for many available federal programs that require the leveraging of local and private investment, including the realization of federal tax credits made available via the Inflation Reduction Act. Target Last Modified: 11/14/2024 |
| A3: Core Service - Reduce the cost of electricity for residential customers and community facilities in rural Alaska through the management of the Power Cost Equalization (PCE) program. |
Target #1: 100 percent of eligible electric utilities receive Power Cost Equalization (PCE) payments.
PCE payments reduce the unit cost of power to residential and community facility customers of eligible utilities. AEA calculates and issues the payments, and provides technical assistance to utility clerks who need help preparing PCE reports. Utilities not participating in the PCE program do not receive payments. Target Last Modified: 11/14/2024 |
Target #2: Maximize each utility"s Power Cost Equalization (PCE) benefits to 100 percent of eligibility.
The graph above shows the number of PCE "eligible" residential kilowatt-hours (kWhs) sold as a percentage of the total residential kWhs sold. Effective FY2023, residential customers are eligible for PCE credit up to 750 kWhs per month per customer. Customers must pay the utility the full rate for all kWhs used beyond those eligible for PCE. The average monthly residential kWhs consumed in FY2023 was 3437 kWh per household. The statistical report for FY2024 will be finalized by March 1, 2025. Target Last Modified: 11/14/2024 |
| A4: Core Service - Increase the safety, reliability, and efficiency of community energy systems through assistance and training. |
Target #1: Circuit Rider assistance is provided to eligible communities.
As reflected in the graph, AEA Circuit Rider Personnel site visits have been impacted by decreased federal funding. Many utilities are highly functional and do not request assistance. About 40 communities across the state receive assistance from AEA on a regular basis. Circuit Rider provides local onsite and telephonic support. AEA also uses the opportunity provided by onsite Circuit Rider assistance to conduct itinerant training relevant to the utility"s specific infrastructure. Target Last Modified: 11/14/2024 |
Target #2: Restore power to communities experiencing electrical emergencies within 48 hours.
AEA"s goal is to reach each community in need within 48 hours. In FY2024, one community experienced an outage of more than two days. Outages are usually due to poor operations and maintenance Rapid response reduces the potential for significant damage. Rural Alaska`s logistics and weather are significant factors that can delay a response. Establishing effective communication pathways with the utilities, providing ongoing operator training, and maintaining strong relationships with Alaska Emergency Management is key to reducing the time needed to respond and restore power. The increase in emergency responses is due largely to ongoing deferred maintenance and operations by local utilities. To meet the challenges rural communities face in maintaining their energy infrastructure, AEA is seeking additional state funding for its Circuit Riders program. Target Last Modified: 11/14/2024 |
Target #3: All rural utilities (electric and bulk fuel) have appropriately trained operators and clerks.
AEA, in partnership with the Alaska Vocational Technical Center (AVTEC), changed how power plant operator training is performed due to the COVID-19 pandemic. Students now participate via Zoom for six weeks and then have a two-week lab in person at AVTEC, reducing program costs and improving participation. With more graduates from the program, there are fewer people who require training. Proper maintenance and operation of energy infrastructure ensures it operates efficiently and extends the facility life. Training in FY2024 included bulk fuel operator training, power plant operator training, person-in-charge training, utility management training, and PCE clerk training. Target Last Modified: 11/14/2024 |
| A5: Core Service - Lead and coordinate state energy policy and planning. |
Target #1: By 2025, 50 percent of electricity generation is from renewable sources.
The percentage of electrical needs met by renewable generation has fluctuated between 29 percent in 2014 and 23 percent in 2023. Of renewable generation, about 90 percent is produced by hydropower, nine percent by wind power, and one percent by other renewable sources (e.g. biomass and solar). Since so much renewable generation comes from hydropower, there are year-to-year fluctuations in overall renewable contribution based on weather. In years with scarce snow and low precipitation, overall renewable generation will decrease with no change in installed capacity. Total renewable energy generated decreased by 19 percent from 2022 to 2023. Total generation declined by about two percent. Renewable energy is generally classified as a non-firm, or intermittent energy resource, whereby production from such renewable energy sources can vary significantly in a given reporting year primarily due to low solar insolation, drought conditions, low wind or frequent wind turbulence, and other factors. Additionally, the non-firm nature of renewable energy resources can result in years where nominal renewable energy capacity may have increased owing to the development of new renewable energy resources, but actual aggregate energy generation may be lower than the preceding year, as evidenced by reduced capacity factors. A renewable energy facility`s capacity factor is the ratio of actual energy produced by a renewable energy resource vs the maximum energy output per designed capacity. As evidenced in the graph above, non-firm renewable generation experiences volatility each year. Renewable energy projects funded via the REF grant program are generally located in rural communities whose utilities are not required to report to the EIA, resulting in such generation being excluded from the figures reported in the above graph. For Round 16 of the REF, 24 applications were recommended to the Legislature for funding consideration in the FY2025 budget. At the conclusion of the legislative session, $10.5 million was appropriated to the REF for funding the top five projects as recommended, resulting in 19 recommended projects unfunded. Increasing the percentage of electricity generated from renewable sources has been achieved by the following action items: • Local, regional, and statewide energy planning efforts that emphasize data-driven decision making and the use of the most cost-effective, locally available resources; • REF projects: in addition to electrical renewable energy, REF projects also provide gains in renewable heat energy, such as biomass and heat recovery. Heat recovery projects typically displace costly heating fuel in schools, water systems, and other community facilities located near the powerhouse. Biomass projects displace heating fuel in non-residential buildings and bring energy security through local sourcing, as well as job creation at the local level; • Private capital combined with REF grant money; • Additional State appropriations for renewable energy projects; • PPF loan program to support renewable energy projects; • Federal funding for renewable energy projects, including the Denali Commission, the Department of Energy, and the United States Department of Agriculture. • Upgrading transmission infrastructure to increase power delivery efficiency and eliminating transmission capacity constraints within electric grids, which benefit from renewable generation sources; • Energy efficiency and conservation programs such as AEA"s Village Energy Efficiency Program, the Commercial Building Energy Audit Program, and public education and outreach activities that lower overall energy consumption, thereby increasing the percentage of power generated by renewables; and • The addition of the West Fork Upper Battle Creek Diversion Project to Bradley Lake has increased renewables on the Railbelt by 37,000 MWh, the equivalent to the annual electrical usage of approximately 5,000 homes; • Like the West Fork Upper Battle Creek Diversion Project, the Dixon Diversion Project will add additional water to the Bradley Lake hydro reservoir for added hydro generation utilizing existing turbine infrastructure, increasing Bradley Lake`s annual energy production by 50 percent, or the equivalent of up to 30,000 homes. AEA is continuing with design and technical studies on the low cost-to-value Dixon Diversion to maintain the project schedule, allowing for potential project completion by 2030, subject to securement of construction funding; and • Renewable energy development efforts as made possible and incentivized via the Bipartisan Infrastructure Law / Infrastructure Investment and Jobs Act and the Inflation Reduction Act such as the Solar for All program, providing $62.5 million in support of residential rooftop and community solar projects. Target Last Modified: 11/14/2024 |
Target #2: 100 percent of Renewable Energy Fund (REF) projects are underway.
REF is a unique and robust competitive grant program, which provides critical financial assistance for statewide renewable energy projects, across a variety of project phases. Since its inception in 2008, the REF program has secured approximately $327 million in state funds and leveraged over $300 million in federal and local funds toward renewable energy development across a variety of project phases throughout Alaska. Nearly 300 renewable energy projects are part of the REF catalog. There are 59 REF projects currently under development. A recent third-party impact analysis of the REF program estimates that approximately 85 million gallons of diesel and 2.2 million cubic feet of natural gas have been displaced through 2022 by over 100 fully operational REF projects. In FY2025, AEA received $10.5 million, double the initial $5 million FY2025 capital budget allocation, from the Alaska Legislature in support of five recommended REF Round 16 projects. AEA, in consultation with the Renewable Energy Fund Advisory Committee will submit 18 recommended projects for funding consideration in Round 17. Target Last Modified: 11/14/2024 |
Last refreshed: 05/16/2025 12:00 pm