Alaska's Energy Future Sold to the Highest Bidder!
Contributed by Alaska Worker Newspaper
For decades, Alaska Workers Association (AWA) volunteer advocates have been fighting for the day-to-day needs of low-income working Alaskans, including fighting to prevent disconnection of heat and electricity utility services to AWA members. AWA is also opposed policies of the Regulatory Commission of Alaska (RCA), including charging Alaska ratepayers for gas we did not even use. Now the state is engaging in schemes to make us pay more to keep the heat and power on in our homes and businesses.
Wages for the majority of an AWA members and low-income workers have remained stagnant, while prices of increased for all basic necessities. The average rent for an apartment in Anchorage is $1600 per month, meaning a worker must earn $30 per hour working full time to afford rent. The cost has increased 50% in Anchorage since 2020. The RCA has exacerbated the poverty of AWA members by permitting a total per-unit cost increase for natural gas residential heat of 311% over 20 years.
Current energy crisis manufactured by state policy:
Alaskans pay the highest rate in the country for natural gas to heat our homes. From 1959 to 2011, the state of Alaska allowed Cook Alex gas producers to export two-point 5,000,000,000,000 ft.³ of gas out of a total of about 7.7 5 trillion few cubic feet of gas produced. In 2015 alone, Alaska exported 16-point 5,000,000,000 ft.³ of natural gas. After 2015, the state halted gas exports due to supply concerns.
The Alaska state constitution reads that all resources of the State belong to the people of the state, and the state government bears responsibility for utilizing those resources for the maximum benefit of the people. The RCA violates the state's constitutional mandate by allowing ownership of the gas to pass from the state to gas producers when the producers extracted from the ground. The RCA bears legal responsibility to Alaska ratepayers, not foreign gas producers, allows a producers to charge utilities above market rates because of the lost "opportunity cost" for producers not being permitted to export our gas to other markets.
Alaska statute 42.0 5.381 requires of the RCA:
"All rates demanded or received by a public utility, or by any two or more public utilities jointly, for a service furnished to or to be furnished shall be just and reasonable" the RCA also regulates the sale from the producer to the utility. In 2009 then state Attorney General Dan Sullivan issued an administrative order prohibiting the RCA from inquiring from the producers how much it costs them to produce gas. This means the RCA has no way of knowing how much profit the gas producers make and leaves the determination as to what cost is reasonable rate to the producers themselves. The RCA also guarantees Enstar natural gas the gas utility, and 11.6 return on investment for gas which is up to ratepayers regardless of how much Enstar pays to purchase a gas and regardless of how much gas we as ratepayers actually use.
An AWA a volunteer recently called the RCA to confirm that the RCA does not keep track of how many houses have had their utility services disconnected. The volunteer asked the RCA representative how the agency can determine affordable rates without that data and the representative answered that somebody who has her utility shut off is able to submit a public comment on the RCA's website and the next time utility makes a tariff filing with the RCA. According to the survey data from Alaska behavioral risk factor surveillance system from 2022 to 2023, 12,433 Anchorage households reported having been threatened with a utility shut off over the 12 months covered in by the survey. Of those 5231 households with children under age 18. The survey is likely and undercount, as it only represents English-speaking adults.
State solution: more money for gas companies or suffering for working families in 2024 the state of Alaska "became aware" of "a potential supply shortage" of gas in Cook Inlet basin. According to their statements, the state believes the current supply will be unable to meet the current energy demand by the year 2027. However, the state already halted exports a decade ago due to the same concern; the state's current statements implying their awareness of a looming gas or is this something they were not previously aware of is dishonest.
To respond to the crisis the state has created, the RCA has already approved the Alaska pipeline LLC, a gas line company whose only customer is Enstar natural gas to build a $57 million pipeline to connect to and as yet nonexistent regasification facility to produce liquefied natural gas (LNG) that they expect to be shipped in from Texas. Their plan tentatively includes mooring a specialized floating LNG storage and regasification ship and Port Mackenzie in building a
16-mile pipeline expansion. Enstar, the RCA and Excelerate Energy have all issued statements that they are in negotiation to make this project a reality. The RCA has granted Alaska Pipeline LLC the privilege of propriety from public interrelation to any additional specifics for the project. (Citation U-24-013 Order No. 17/22/2024, https://rca.alaska.gov/RCAWeb/ViewFile.aspx?id=f2d4c5de-72d0-41f0-8150-544b3a7e1310)
Excelerate Energy is a Fortune 500 gas company. Excelerate has stated that they expect to include a "take or pay obligation" in gas sales agreements, which means that buyers would be legally obliged to take delivery of all goods or pay a penalty fee.
"Regasification" refers to the process of converting LNG back to natural gas. Natural gas, which is in gaseous form when extracted from the ground, is super cooled to convert to liquid form (LNG), such that it takes up much less volume and is easier issue. This also condenses a high quantity of energy into a compact space, making it highly explosive. While the current plan of the state proposes make profits for the gas industry, is far from the only means to address the eating and electric needs of Alaska. According to the Natural Renewable Energy Lab a subsidiary of the US Geological Survey, Alaska possesses 71% more capacity for offshore wind power generation in the rest of the US combined. The Homer Electric Association is building a solar facility that, when complete, produce five times the current solar production across the rest of the state. The cost of renewable energy system to offset the lack of gas supply would actually be more cost-effective than importing LNG from Texas.
One of the arguments giving against investing in renewable energy sources in Alaska is the current lack of infrastructure. However, the current lack of infrastructure needed to import, and re-gas-fired LNG is not preventing the RCA from moving forward with a plan to bring in LNG.
This entire process is going forward without the input of the public who will ultimately be expected to pay for – with our lives in the case of those who are of us who are poor, in 2023 50 people in Anchorage. The RCA has called no public hearing, solicit no public comment, and is generally sought to keep the entire process of secured from the public knowledge until after it is too late.
AWA is uniting all in our state who are concerned about the future of our community, starting with those whose concern is based in the current condition of not being able to survive economic situation our government has already created. AWA urgencies volunteer canvassers to reach potential members to bring them the strength of the organization and volunteer advocates to continue fighting to prevent utility shut off, as we build a four strong enough to oppose government policies that threaten our survival.