Pursuing a new cooperative: MEA asking state regulatory commission to consider power pool

Voices Of The State

Posted: Monday, October 08, 2007

In late August, the Matanuska Electric Association (MEA) filed a petition with the Regulatory Commission of Alaska (RCA), asking the commission to explore the formation of a traditional Generation and Transmission Cooperative (G&T), or alternatively, the creation of a genuine power pool for all regulated electric cooperatives in the Railbelt.

A traditional G&T is the nationally recognized form of power supply cooperative that would combine each Railbelt electric cooperative s generation and transmission assets and the associated liabilities for those assets. Each utility appoints a director to the G&T board of directors, which then appoints a chief executive officer for the new power supply cooperative. The G&T then becomes the all requirements power supplier for its member utilities.

Currently, wholesale power costs along the Railbelt vary significantly, which means residential rates also vary. A traditional G&T cooperative could level these disparities by allowing all consumers in the interconnected Railbelt system to share proportionately in the benefits derived from working together, from state or federal subsidies, enhanced financing opportunities and from the consolidation of debt and liabilities related to all the G&T assets.

As explained in MEA's petition, all of the electric co-ops along the Railbelt are either planning to build or have recently completed construction of new generation facilities. While the individual approach works, there may be economies of scale and overall efficiencies that are not being realized.

As nonprofit organizations, each Railbelt electric utility exists for a common purpose: to serve the public interest by providing its member-owners with the lowest cost electricity possible, consistent with prudent reliability and safety standards.

Since before statehood, MEA has steadfastly promoted the merits of a traditional Railbelt-wide G&T. Earlier this month, we urged the other Railbelt cooperatives to support MEA's petition for a Railbelt G&T. Each local electric utility would still be responsible for distributing power to its local homes and businesses from the substations and high voltage transmission lines owned and operated by the new G&T.

MEA's past efforts to promote a Railbelt-wide G&T have not produced the desired results. MEA hopes that by submitting this question to the RCA, the Railbelt utilities will be better able to get past former stumbling blocks and advance a result that will best serve the public interest, since the RCA has the legal authority to impose a G&T format upon the individual electric cooperatives.

Support for this petition does not mean that MEA, or any utility, should amend, delay or cease working on its individual power supply plans. That would be imprudent. Each utility must continue to pursue its individual power supply plans, even as the RCA reviews the merits of a traditional G&T for the Railbelt.

However, the potential benefits to the consumer of a shift in public policy toward a traditional Railbelt-wide G&T are enormous.

By filing this petition with the RCA, MEA is once again in the role of promoting cooperation in forming a traditional G&T. We believe this would advance the public interest by producing the most efficient, reliable and affordable wholesale rates for all Railbelt consumers.

Wayne D. Carmony is a graduate electrical engineer. He started work in the electric utility industry in 1968. He has served as General Manager of Matanuska Electric Association since 1994. The Petition can be viewed at MEA's Web site at www.mea.coop.

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