Conversions:
Rural Alaska Energy Supply Chains
presented to
Rural Alaska Energy Conference
September 2002
Steve Colt
Institute of Social and Economic Research
University of Alaska Anchorage
email steve_colt@uaa.alaska.edu
Electricity in PCE Communities
• Serves about 78,000 people
• with 5,400 kWh per person per year
Source: PCE FY00 statistics
Three Questions
• Where does rural Alaska
electricity come from?
• Why does it cost so much?
• What can we do about it?
• Urban Alaska electricity comes from
– natural gas
– hydro
– (and coal)
• Rural Alaska electricity comes from
–
Diesel !
(and hydro)
Generation in PCE Communities by
Source –
Hydro
12%
Diesel
88%
Total = 425 million kWh/year
or 48 MW average output
Source: PCE FY00 statistics
Three Questions
• Where does rural Alaska electricity come
from?
• Why does it cost so much?
• What can we do about it?
Electricity in PCE Communities
• Serves 78,000 people
• with 5,400 kWh per person per year
• using 360 gallons diesel per person
per yr
• that costs about $390 per person per
year
Fuel Cost per kWh: Anchorage vs.
Rural Alaska
10
9
cents per kWh
8
6
4
2
0
2
Anchorage
high-wind communities
Rural diesel electricity comes
from:
• Fossils
• Crude Oil
• Diesel at Refinery Gate (Anacortes
WA, Richmond WA, Nikiski AK)
• Diesel at Barge Dock
• Diesel in Tank Farm
• Electricity at Powerhouse
• Electricity in home
Components of Utility Diesel Cost
•
•
•
•
•
Crude oil = $.35-.55
Refining = $.25
Bulk Barge = $.10-.30
Inland Transport = $.00 - $1.00
Bulk Storage = $.10-.20
• Total = $.80 - $2.30
Actual Range of Fuel Costs
storage
10%
crude
29%
inland
32%
barge
13%
refiner
16%
NonFuel Cost per kWh
30
27.5
cents per kWh
25
20
15
10
8
5
0
Anchorage
AVEC
Nonfuel cost includes
• Generators (machines)
• Distribution lines and meters
(equipment)
• Operations, Maintenance and
Management (people)
Total Non-Fuel Cost per kWh Sold vs. kWh Sold
Firm Level Data - Unfilled Panel
$2.000
$1.800
$1.600
$1.400
$ per kWh
$1.200
$1.000
$0.800
$0.600
$0.400
AVEC
THREA
$0.200
Bethel
Naknek
$0.000
0
10000000
20000000
APC
Unalaska & Nome
30000000
40000000
kWh Sold
50000000
60000000
70000000
Nonfuel cost per kWh for small
rural utilities
$2.00
$1.80
Village Non-Profit
$1.60
Pedro Bay
Village For Profit
Regional Non-Profit
$1.40
Arctic Village
Regional For-Profit
$/kWh
$1.20
Kotlik-98
$1.00
Kotlik-97
Tuntutuliak
$0.80
Venetie
Kotlik-99
$0.60
Napaskiak
$0.40
AVEC
$0.20
$0.00
0
200,000
400,000
600,000
800,000
1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000
kWh Sold
True Cost of Electric Service to
PCE Communities: $116 million/yr
Off Book Subsidized
Interest
16%
Off Book O&M
1%
Booked Fuel
26%
Off Book Capital Grants
9%
Booked Capital
15%
Booked O&M
33%
Three Questions
• Where does rural Alaska electricity
come from?
• Why does it cost so much?
• What can we do about it?
What can we do?
• Reduce fuel use?
– Yes! Save 9-18 cents per kWh
• Eliminate generators?
– Maybe….Save 0-5 cents per kWh
• Reduce Distribution Equipment?
– No. (at least not now…) 5-10 cents per
kWh
• Save OM&M Expense (people)?
– Probably not…5-20 cents per kWh
Electricity Goes to:
• Light, sound, heat, appliances, TV,
computer
– Efficiency of conversion matters!
How do We Do It?
• Invest –
• in 3 kinds of capital
Three Kinds of Capital
• Physical Capital – generators, wind
turbines, distribution lines
• Human Capital – people with the right
skills in the right place at the right
time
• Social Capital – communities and
utilities that work together to sustain
the electric system
Rural Energy and Jobs
• The conventional energy system
supports significant employment.
• Little of the total cost goes out-ofstate
• About 75% of rural energy project
dollars flow to urban areas. (weatherization)
We’re all in this together.
~The End
View this show after Thursday 9/19 at:
www.iser.uaa.alaska.edu
Non-Fuel Cost per kWh, 1997-99
Total Non-Fuel Costs/kWh Sold vs. kWh Sold
Total Non-Fuel Costs/kWh Sold
0.50
0.40
0.30
0.20
Tuntutuliak
0.10
What about Consolidated?
AVEC
THREA
McGraph Light & Power
APC
Where are the Investor-Owned?
0.00
0
10,000,000
20,000,000
kWh Sold
30,000,000
Where are the Regional Coops/Authorities?
40,000,000
Conversions of Money
• Conversions of Energy = conversions
of money
Nonfuel cost for very small
utilities (less than 1 million
kWh/yr)
Total Non-Fuel Cost per kWh Sold vs. kWh Sold
Utility Level Data
Utilities with less than 1 million kWh per year
$2.000
$1.800
Chalkytsik
Pedro Bay
$1.600
$1.400
$ per kWh
$1.200
$1.000
Tuntutuliak
$0.800
MKEC
$0.600
$0.400
$0.200
Port Heiden
Kwethluk
$0.000
0
100000
200000
300000
400000
500000
kWh Sold
600000
700000
800000
900000
1000000