Fed dollars down, Denali Commission tries more with less

Denali Commission leaders are working to chart a new path for the rural development group based on leaner budgets and community partnerships.

Built on federal funding, the commission was formed in 1998 at the behest of the late Sen. Ted Stevens with the mission of bringing basic infrastructure in rural Alaska up to the standards expected in the rest of the country, Denali Commission Energy Program Manager Jodi Fondy related at a May 22 Commonwealth North meeting.

“Rural Alaska is much different than the rural folks think of down in the Lower 48. They think about a barn, a silo, but there’s a road and an intertie, and our rural is very, very different than that,” Fondy said.

The Denali Commission has poured nearly $1.1 billion into rural Alaska since getting its first $20 million during the 1999 federal fiscal year. About half of that money, $507 million, has gone into energy projects, with another $302 million for health programs and clinics.

During the mid-2000s, its budgets approached $140 million annually. That money came from a host of federal agencies and funds; at least 10 have provided funding to the Denali Commission at some point.

These days, the commission is trying to get used to budgets in the $15 million range, Fondy said. That has led to prioritizing projects and sometimes just doing less.

“We get asked a lot whether we’re still around,” she said. “We’re still around.”

As a result, the Denali Commission is developing a strategic plan focused on how to best serve rural Alaska with about $15 million per year, Fondy said.

As the last of its health care projects are wrapping up, she said the commission could revert back to its genesis, which is energy.

Much of the energy funding has gone to improving traditional infrastructure: bulk fuel storage facilities, power plants, interties and distribution networks.

Replacing a power plant or fuel storage tanks can cost several million dollars each, she said, which leaves the commission with a choice — fund a couple major projects each year or try to cast a wider net with smaller pots of money.

When funding began to dry up in 2011, the Denali Commission held six listening sessions across Alaska to see where stakeholders felt remaining funding should go, Fondy said.

The themes, energy, housing, health and economic development, remained the same.

As a result, the commission formed the Strategic Technical Assistance Response Team with the Department of Energy to “look at communities holistically, energy and otherwise,” Fondy said.

The first two rounds of assistance focused on five communities each and the third round will begin this summer, she said. Lower cost activities include holding energy efficiency workshops, equipment training, technical assistance and project support.

It’s a shift back to the mid-2000s, when the commission did significant energy efficiency work on top of the infrastructure construction.

“We’re starting to look at those projects again as our funding has declined, and it may be more cost effective to work on energy efficiency in communities versus the amount of capital it takes to put in some of this new infrastructure,” Fondy said.

Other work is emphasizing maintenance as opposed to new construction.

Testing, painting and refurbishing existing fuel tanks can cost less than $1 million, while the replacement cost is several times that, she said.

This work should help extend the life of previous Denali Commission projects, too.

Training and keeping qualified operations and maintenance staff is a continual challenge, she said.

“We have trained somebody to operate and maintain something — and either with their new skill set they are able to find a job that pays better elsewhere or they get burnt out because they have taken on too much,” Fondy described.

Either way, a community ends up with an untrained operator and there’s little the commission can do about it, she said.

AVTEC, the state vocational school in Seward, does some power system training, she said, but funding is always an issue. Projects done in partnership with the Alaska Energy Authority and the Alaska Village Electric Cooperative can be remotely monitored, but someone in the community still needs to alert staff of potential problems, she said.

The commission has also partnered with the AEA on a couple ventures that spurred state investment.

In 2008, the commission had $3 million and AEA had $1 million, Fondy said. The two came together and solicited for the first round of projects in what is now the state Renewable Energy Fund. Eventually, 31 projects, mostly energy assessments, were funded that first year, she said.

Since, the State of Alaska has committed $247.5 million, according to an AEA’s latest program report. With $11.5 million for the Renewable Energy Fund in the capital budget passed by the Legislature in April, the fund is one of few things that withstood budget cuts this year.

The two groups also started what has become the state’s Emerging Energy Technology Fund, typically reserved for small-scale, cutting edge energy generation and efficiency projects.

Elwood Brehmer can be reached at [email protected].

11/21/2016 - 9:38pm