Rural Alaska is exposed to the highest electricity costs in the United States. Nearly 200 communities predominantly rely on expensive and unpredictably-priced diesel fuel for almost all electricity generation. Demand-side resources, including energy efficiency, and renewable sources of electricity appear to be viable options in many communities, but these resources are under-utilized.

A number of earlier initiatives have lowered electricity prices for rural Alaska residents. The Power Cost Equalization (PCE) mechanism and Fund were intended to shield rural customers from high electricity costs through support to qualifying utilities. The PCE is further augmented by efforts of various organizations (e.g., Alaska Energy Authority) to facilitate long-term planning, provide community grants, offer low-cost financing, and provide training and technical assistance to rural utilities. However, even with this assistance, average rural electricity bills remain higher than urban and rail belt regions of Alaska and typically every other state in the U.S. There may be substantial opportunities for rural Alaska communities to lower electricity costs through strategic and coordinated investments in energy efficiency, distribution plants, and generation.

Responding to the Challenge

The U.S. Department of Energy (DOE) Office of Indian Energy Policy and Programs is partnering with the Regulatory Assistance Project (RAP) and Lawrence Berkeley National Laboratory (LBNL) to assist local utilities and policymakers identify new (or improvements to existing) programs intended to lower the economic cost of meeting rural Alaska’s electricity needs.

At the highest level, the RAP team will conduct a comprehensive review of (1) existing challenges, (2) progress advancing the policies and recommendations identified in earlier reviews, and (3) current utility operational practices.

The RAP team, with assistance from the U.S. DOE and LBNL, will focus initial efforts on reviewing and identifying the following:

• Status, intent, and past performance of statewide grant and support initiatives;
• Long-term planning practices (local, regional, statewide);
• Resource selection criteria—including the consideration of renewable electricity resources and demand-side options;
• Requirements and capabilities of utility staff to manage changing technology;
• Opportunities for joint-action initiatives, sources of low-cost capital, and coordinated resource investments;
• Opportunities for strengthening investments in low-cost energy efficiency;
• Ways to strengthen and streamline project-related grant assistance;
• Other strategies and successful practices already occurring in rural Alaska communities; and
• Options for using more local renewable energy resources.

Interested in More Information?

Over the next year, we will facilitate discussions with community members, utility employees, customers, researchers, institutions, service providers and policymakers interested in lowering costs of electricity in rural Alaska. Contact Riley Allen (802-498-0713) for more information or to schedule a discussion about your community.