The Homer Electric Association appears to be going down a path that is contrary to the wishes of the membership. The recent whiplash in our rates underscores the urgency of getting the direction turned around. One reason our rates have increased and then decreased so substantially in the last three months is because carbon intensive fuels are very volatile in their price structure.
In the 1980s, HEA locked into a 30-year contract with Chugach when natural gas was plentiful and cheap. Since then, natural gas prices have skyrocketed, and HEA has spent hundreds of thousands of ratepayer dollars trying to get out of the contract. Now we're hearing the same rationales for a long-term contract to buy electricity from the Healy Coal Plant. But the cost of coal is only going up.
Burning coal produces mercury and other toxins, as well as carbon dioxide, and new rules will add significant costs to our rates. Additionally, the Healy Coal Plant did not work 10 years ago, and it's been mired in litigation ever since. The cost of bringing this plant back on line will cost tens of millions of dollars, and no jobs will be produced on the peninsula by purchasing electricity from Healy.
Safe, reliable and locally available renewable energy technologies are price stable and viable today. Wind, tidal, wave, current, solar, geothermal, hydro and small scale producers could all provide power to our utility. Most importantly, renewables provide flat-cost power, so we won't see our rates rising as fossil fuel prices invariably increase.
Furthermore, energy conservation and demand side management could reduce the amount of capacity required, thereby lowering our rates even more. With a sound mix of base load capacity from renewables such as hydro, tidal and geothermal, along with the "intermittent" renewables such as solar, wind, conservation, etc., HEA can meet the entire demand of its members. Plus, the electricity would be produced on the Kenai Peninsula, meaning more jobs for local citizens. And what could be more "cooperative" then cooperative members providing some of the electricity that goes to our fellow cooperative members in the form of small residential power generators, like at home wind turbines?
As an interim measure, while these systems are being investigated and installed, we could continue using the systems that have served us until now. Extending our current agreements for five or 10 years is preferable to locking ourselves into a 50-year agreement.
Our governor is calling for Alaska to achieve 50 percent renewable capacity in the next 15 years, and our president is providing billions of dollars to help make this happen. HEA should be a leader in creating flat-cost electricity from renewable power and helping to drive the clean energy technology and sustainable jobs that are the future of Alaska.
Buying coal at ever increasing prices makes no sense when compared to utilizing facilities that use rain, snow, wind, geothermal and the ocean to produce the cheapest electricity in Southcentral Alaska.
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