Gene Therriault and Brian Hickey wrote in the ADN today about the need for investing in our Railbelt transmission project, “Why transmission is Alaska’s next big energy project”. It’s a good commentary, and I hope you’ll read it.
Improved capacity for our railbelt makes good sense, though adding a lane to our energy highway has more value if we have greater demand or economic dispatch that creates demand for the lane, and value to the users of the lane. If we build the extra lane but continue to see a stagnant economy, stalled diversification, and no change in system operating policy, what will we have gained?
I think in terms of critical system constraints and bottlenecks. (Synchronous Management principles and the Theory of Constraints, if you remember The Goal and related 90s operational theory.) I agree that transmission infrastructure is a constraint. Still, I’m not convinced it’s the bottleneck to spend limited money on, which, if eliminated, would move the needle on affordability and economic growth.
Frankly, I don’t have a clear idea of what the bottleneck is that we can address, so perhaps spending on transmission capacity at least creates future options and incremental benefit with the Dixon diversion project completed, and therefore is the best next project to invest in. I certainly concede that the authors and many others who have been deep in the weeds are advocating for investments in transmission, and I should pay attention to their expertise and opinions. I also want to be cautious about slowing progress and being part of decades of analysis paralysis and efforts that have stalled before completion.
When I was running manufacturing facilities, I was continually confronted with requests from experienced operating supervisors to upgrade one machine or another to increase capacity, reliability, capability, and flexibility, or reduce operating expenses. In the face of many requests that could not all be funded, I always had to ask, ‘Which cell or machine should receive the next investment that will best improve the capability, capacity, and competitiveness of the factory?’
Which investment is the best one that will unlock more real throughput, not just potential, and that will bring economic benefit to the bottom line, or in this case, consumer pockets?
And so I find myself looking at the same question today. What actually moves the needle and optimizes the incremental benefit to communities and ratepayers with the limited available funding? Is it accelerating upgrades to existing transmission lines? Is it accelerating the high-voltage DC line across the inlet? Is it accelerating the Dixon Diversion? Is it incentivizing one of the wind, geothermal, or tidal projects? Or is it incentivizing the region’s small hydro potential?
Or is it preparing and protecting western Alaska communities to withstand storms, adding VPSOs and improving community safety, addressing deferred school maintenance, stabilizing public worker turnover, improving education, or perhaps affordable housing funding?
Just as in my days running a manufacturing facility and product development companies, the list of potential areas for improvement and needs was always far longer than the resources available.
Back to energy, I’m using House Joint Resolution 27, which I introduced at the end of the last session, as a vehicle for more discussion on how we unlock our energy potential. How do we do it in a way that is actually making a beneficial impact on our economy, affordability, growing career-oriented jobs, and opportunities for future generations of Alaskans?
And I do understand that sometimes you have to do what’s doable, even if it’s not the optimum option, that is not practical in the moment. When federal dollars align with state needs, there is merit in taking the opportunity when it’s available, such as by accepting grid reliability funding and finding the matching funds, even at the expense of not investing in other projects.
I have two additions I’m working on to introduce to the HJR 27 resolution at its initial hearings in the next session. One will propose the establishment and reorganization of state agencies and offices to create a department or office of energy, and consolidate fragmented activities under a single commissioner. (And give the Ag division more focus in the remaining DNR.) The other proposed change will be to address a regulatory framework gap to enable the development of geologic hydrogen and storage. The challenge of prioritizing transmission upgrades over the many other energy options and community needs is exactly the way I’m proposing a Department or Office of Energy – we need to defragment the decisions that are the foundation of our future growing economy and healthy communities.
Perhaps an energy resolution and these additions are just moving the deck chairs around on a floundering ship. So I hope the discussion will help clarify the next step we should or must take. Perhaps it is upgrading the transmission, and ‘if we build it…’, more demand and benefits will materialize.
I appreciated the article today and welcome feedback and suggestions on whether transmission is the right bottleneck to focus on next, and if not, what is.
Ky