Renewable Portfolio Standards (RPS) Are A Way Forward for Local Energy
When the Legislature reconvenes in January, Alaskans will have an opportunity to change our energy system through a pair of bills requiring the four southcentral utilities to get 80% of their […]
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When the Legislature reconvenes in January, Alaskans will have an opportunity to change our energy system through a pair of bills requiring the four southcentral utilities to get 80% of their energy from renewable power by 2040. This is not only a necessary solution to the gas supply problem, and a foundation for Alaska’s long-term security and prosperity. It is our responsibility, as concerned citizens, to pressure the legislature to pass these two bills: HB 121 & SB 101.

As the cheapest gas available from Cook Inlet’s already-developed reserves is depleted, gas extractors will charge higher prices to pay for new exploration and development. The gas prices will rise in 2027 if nothing changes. Utilities must fill the growing gap with increasingly expensive gas – but even the available gas (which could be TRIPLE today’s price) is expected to fall short in the early 2030s. Alternatives such as imported LNG or North Slope will also provide LNG at a premium cost. 

Utilities are monopolies – they do not face competitive pressure. Short of moving or going off-grid, we can’t decide to buy our electricity from someone offering better prices. Utilities strive to maintain low rates — but ultimately face no consequences for failing to constrain fuel costs, which are passed on to ratepayers. Utilities do not suffer penalties for clinging to their existing gas-powered energy system even as fuel costs rise, rather than undertaking the difficult and expensive work of developing alternatives. Shrinking gas demand enough to avoid spiking prices requires big changes that utilities are only weakly incentivized to make. And these two bills will help incentivize utility monopolies to make the changes to serve their customers. 

Yes, replacing gas generation will have significant upfront cost. But the choice is similar to deciding to replace the clutch of an old car… then the head gasket, then the brakes, and so on. Always choosing “repair” rather than “replace” will lead you on a long path of escalating costs, like the rising cost of filling our gas demand in perpetuity. A new car has a higher up-front cost, but in the long run may be cheaper than pouring money into your old one. This analogy checks out — preliminary research from the National Renewable Energy Laboratory concluded that an 80% renewable Railbelt grid in 2040 could save ratepayers tens of millions per year compared to maintaining the status quo (NREL expects to release the final study in December).  

Utility staff haven’t neglected to look for renewable energy opportunities. Nor have board members with a clear vision of what’s at stake. But making the change at a meaningful scale and with the required urgency will take strong, clear, and persistent incentives from outside the utilities. This is why Inletkeeper supports the RPS bills, House Bill 121 and Senate Bill 101,  which would require utilities to be 80% by 2040, with intermediate milestones of 25% by 2027 and 55% by 2035. Having a clear timeline will create certainty for utilities and the renewable entrepreneurs ready to invest in supplying them with wind, solar, and energy storage. And using less gas for electricity will mean more of the remaining cheaper gas can be used for heating homes and businesses — an application that presently has fewer easy alternatives. 

Before the Legislature reconvenes in January, you can take action for the RPS by signing the Alaska Climate Alliance’s digital petition. More importantly, you can let your legislators and utility board know you support the RPS – If you have a chance, visit your Representative or Senator, and don’t underestimate the power of phone calls and letters. Your Voice Matters!