100 renewable energy projects head for final review

Photo/Jan Huisman/For the Journal

State officials are in the final stages of reviewing renewable energy projects eligible for $100 million in state funding and expect to make final recommendations to a legislative committee Dec. 7, state energy director Steve Haagenson told a state energy task force Nov. 10.

If the projects recommended by the Alaska Energy Authority, Haagenson’s group, are followed by the Legislative Budget and Audit Committee, which has authority to approve them, the $100 million will most likely be dispersed in the first quarter of 2009, according to Karsten Rodvick, spokesman for the AEA.

House Bill 162, passed by the Legislature in the 2008 session, set up a $250 million state renewable energy grant program, with the current $100 million funding as the first year increment, and requires the audit committee to approve the first round of renewable energy projects. Subsequent rounds of funding must be approved by the entire Legislature.

Haagenson told the Alaska Renewable Energy Task Force that 112 proposals were received at the Oct. 8 deadline for a “round one” solicitation for projects that were well defined and more or less ready for final engineering or construction.

About 12 applicants were eliminated, leaving about 100 for the final round of scrutiny by the AEA, Haagenson said.

Only part of those will make the final cut to be recommended by the AEA because the amount of money being requested is over four times the $100 million being offered. All of the final applications will be given to the legislative committee, but it’s likely the legislators will follow the agency’s recommendations in the final approvals.

Meanwhile, a second set of project applications were also solicited in a “round two,” for projects that needed more time for definition and development. The deadline for those was Nov. 10.

By the end of the day, 110 applications had been received by the AEA, some that involved more than one renewable energy project, according to Rodvick.

Round two projects will undergo the same screening as round one projects, but only $50 million is likely to be available under House Bill 162 and even that must be appropriated by legislators next spring as part of the fiscal year 2010 state budget.

Meanwhile, the energy agency is still planning an early December rollout for a statewide energy plan. Haagenson told the renewable energy task force Nov. 10 that a core part of the energy plan will be community plans with a catalog of options available to local residents for reducing fuel use along with an estimated cost of implementing each option.

The agency is now scrambling to get the cost information completed before the December deadline, he said.

Two uncertainties the AEA has had to deal with in preparing the plan was knowing how much fuel was being used in each community, which would give the agency an idea of the amount that can be displaced by a new energy source, and a price to assume for the cost of the fuel.

For the cost of oil, the AEA wound up using $110 per barrel as an expected long-term price, an amount recommended by University of Alaska economists.

Determining the amount of fuel used has been a struggle, however. The AEA wound up hiring University of Alaska researchers Steve Colt and Nick Symomiak to do a fuel-use survey.

Colt told the energy task force Dec. 10 that while the amount of diesel used for power generation in rural communities is known with precision because of state Power Cost Equalization payments, oil used for space heating and transportation could only be roughly estimated using a combination of methods.

The figure Symomiak and Colt finally arrived at was approximately 737 gallons of fuel oil per year for heating and 548 gallons per year for each job in the community. The combination of those two multiplied by the number of households and number of jobs gave an estimate that the two economists believed was roughly accurate.

“We’re not looking for a perfect set of data at this point, but something that is in the ballpark,” Colt said. “This is very high level. We could be off 20 percent.”

Haagenson said a rough estimate was adequate for the AEA’s initial task of planning strategies for reducing fuel use, but as communities begin actually looking at projects a more detailed and accurate figure for local fuel use will be needed.

Rep. Anna Fairclough, chair of the task force, said she was uncomfortable with possible inaccuracies in the fuel-use data at a time when legislators will be asked to approve more funding for energy projects.

Rep. Bill Thomas, R-Haines, another legislative task force member, said it may not be worth a lot of expenditure if the accuracy can be improved only marginally, but that he and other alternative energy advocates will need good ammunition to counter efforts to reappropriate the funds identified for energy projects. “Oil prices are taking a dip now, but they’ll be back up,” Thomas said.

Thomas said the AEA should solicit the help of the Alaska Municipal League, the state Chamber of Commerce and school districts in assembling more accurate data on local fuel use.

“If they want our help (with energy appropriations) they’d better help us,” get the data needed, he said.

Another task force member, Sen. Joe Thomas, D-Fairbanks, said some of his Interior Alaska constituents volunteered that they typically use about 1,200 gallons of fuel oil per year for heating, which is not far off the rough estimates Colt and Symomiak made for rural communities.

He said fuel oil distributors could be persuaded to volunteer figures for average household delivery, which would provide a useful set of data.

Colt told the task force that Southcentral Alaska households served by Enstar Natural Gas Co. typically use about 200,000 cubic feet of natural gas per household per year, which on an energy unit basis is the equivalent of about 1,200 gallons of fuel oil.

11/09/2016 - 1:06pm