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MATANUSKA ELECTRIC ASSOCIATION, INC. UPDATE – MARCH2015 JOE GRIFFITH, GENERAL MANAGER COMMONWEALTH NORTH, MARCH 6, 2015
MATANUSKA ELECTRIC ASSOCIATION, INC. U P D A T E – M A R C H 2 0 1 5
JOE GRIFFITH, GENERAL MANAGER COMMONWEALTH NORTH, MARCH 6, 2015
MEA POWER PORTFOLIO (CAPACITY)
2
80%
20%
80% Natural Gas
(Currently Chugach
Electric - Transition to EGS
in 2015)
20% Hydro (Bradley Lake,
Eklutna Hydro, Southfork
of Eagle River, McRoberts
Creek in Palmer)
Eagle River
Palmer Wasilla Matanuska Glacier
Point MacKenzie
Denali State Park
Talkeetna
Matanuska Electric Association
Service Territory (Certificate 18)
Honolulu Creek
>1
00
Mile
s
~100 Miles
SERVICE AREA CHALLENGES
• Over 4200 miles of power lines covering only 59,000 customers
• Service area the size of West Virginia
• Challenging terrain and narrow rights of way
• Fast-growing demand
• Aging infrastructure
• Vulnerable system
• New demands of being a power generator
4
MEA SYSTEM UPGRADES – A FOCUS ON RELIABILITY Transmission improvements
• Meet basic reliability standards, decrease number and length of
outages
Substation improvements –
• Reduce outages, improve power quality, account for growth
• 5 substations currently undergoing upgrades, including Parks
(Chugiak)
Clearing to reduce outages (Chugiak/Birchwood ,Palmer,
Talkeetna/Willow, Meadow Lakes)
New meters
• Increase accuracy of bills, reduce outage time, improve efficiency of
workforce
MEA LONG RANGE PLANNING
Development of a comprehensive growth and maintenance plan
• Proactive assessment of current system compared to projected growth
• Coordination with other planning efforts at MoA and Mat-Su Borough
• Several new substations identified
• Likely result in purchase of corridors and substation property for future use
• Will seek feedback from key stakeholders
• Target completion: Summer 2015
EKLUTNA GENERATION STATION
Online Early 2015
DECISION FACTORS LEADING TO EKLUTNA GENERATION STATION (EGS)
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2004: 10-year notice to Chugach that MEA would not be customer after Dec. 31, 2014
MEA Integrated Resource Plan, MEA power supply studies, Technology Evaluation Report
Financial and hourly dispatch modeling
Load-flow study, pooling studies
Conversations with Chugach and ML&P on joint effort
Other considerations
o Railbelt generation suite
o Lack of meaningful work between 2004 and 2009
o Cook Inlet fuel situation
o Pipeline configuration
o Air regulations
o Load characteristics
EKLUTNA GENERATION STATION DESIGN
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171mW Capacity (Ten 17.1mW engines)
Dual-fuel (Natural gas & diesel)
Reciprocating engines
o Efficiency over power range
Why Wärtsilä?
o Industry leader
o 10 smaller engines to better follow our primarily residential load
o Proven and efficient technology
o Price
STRATEGIC LOCATION
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AK Railroad Enstar 20”
Gas
Pipeline
Eklutna Generation Station
EGS - STRATEGIC LOCATION
EGS PROJECT IMPACT
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o Nearly 300 jobs at peak of
construction
o 28 permanent O&M
positions filled – majority
Alaska hire
o Estimate over $100M in
Alaskan economic impact to
date
EGS PROJECT UPDATE
12
oCommissioning nearing completion
oFour engines commercially available
oRemaining 6 engines ready by March 31,
2015
IMPORTANT COORDINATION WITH RAILBELT UTILITIES
13
Interim sales agreement with Chugach Electric signed – Q1 2015
Coordination of power produced during commissioning
Interconnection agreement approved
Complete control communications loop
Working toward a plan to capitalize on new opportunities for
economic dispatch of power for significant savings
IMPACT TO MEMBERS
• EGS transforms the way we do business and serve our members.
• Increased control over decisions that impact our membership.
• Replaces inefficient and aging generation (Beluga)
• Allows us to more closely and efficiently serve our load.
• Projecting an initial rate increase (15-20%) during 2015
oLargely driven by new, more expensive gas contracts
oProjections were for a similar increase with Chugach, but one year
later
oMEA is working to decrease the impact to our members
ROLE IN THE RAILBELT ENERGY PICTURE
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10 smaller engines for load following
Dual-fuel in case of natural gas supply interruption
Improves grid stability throughout the system
Can help integrate variable power
Unique capability – important for single
transmission operator and economic dispatch
May help meet proposed EPA regs by offsetting less
efficient generation
MYTHBUSTER:
IS THERE TOO MUCH GENERATION ON THE RAILBELT?
Short Answer: No, we are actually well matched
Long answer:
• Transmission constraints mean GVEA/HEA must generate enough for their entire load.
• Our transmission system is not a grid like the Lower 48 and requires more reserves:
• 30% of peak required for reserve capacity
• 100% of largest running engine required for spinning reserve
• 10-20% of peak for forced outages, operation and maintenance reserves
• Aging/less efficient generation forcing utilities to build new (less expensive, can’t get parts)
• Growth
RAILBELT UTILITY NATURAL GAS CONCERNS
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Current market is 200 bcf per year.
Too small to encourage exploration.
Inadequacy of current gas
infrastructure
o Mismatch of supply delivery
infrastructure with demand centers
o Long and vulnerable distribution
system
o Limited and expensive storage
Transport costs and ownership
MEA SUPPORTS ARCTEC INITIATIVES
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Prioritizing upgrades to fragile Railbelt transmission infrastructure
Support for infrastructure development plan, Funding options limited
TRANSCO/ISO development
Goal – coordination of assets for benefit of the entire Railbelt
Feedback from other stakeholders (Legislators, IPP’s)
Legislative $250k to RCA at ARCTEC’s request
RCA I-Docket currently seeking comments
Integration of Independent Power Producers
Should not impact rates or the reliability of the system
Pending legislation – HB 78
MEA IN THE COMMUNITY
• Involved in events and organizations throughout our
service area
• MEA Charitable Foundation supports service area with
approx. $125K annually from Round Up® funds
• Award $20,000 in scholarships annually to area youth
• K-12 Energy Education Programs
