Meera Kohler President and CEO Alaska Village Electric Cooperative

Why, in the midst of plenty, do Alaska’s rural communities pay the highest energy prices in the nation?

Develop an understanding of the current state of energy production, transportation and consumption in rural Alaska and examine efforts underway to develop long-term, viable, cost- effective solutions to those challenges. Rural & Alternative Energy Study Group The Charge

Today, nearly 80% of rural communities are dependent on diesel fuel for their primary energy needs. How Alaskans Heat Their Buildings

Average Alaska Fuel Prices

AVEC’s Delivered Fuel Cost Average Average Average Average Average Average Average Average Average Average Year-to-date Increase $ %

The Cost of Energy Estimated Median Share of Income Alaska Households Spend for Home Energy Use

Rural residents use less than half as much total energy as people with natural gas or hydro power as in Anchorage and Southeast Alaska.

COMMONWEALTH NORTH Study Group Findings 1. Alaska needs a statewide energy vision, plan, and implementation strategy that incorporates a holistic view of statewide energy sustainability which serves all Alaskans similarly

COMMONWEALTH NORTH Study Group Findings 2. The interconnection of rural communities into regional electrical transmission grids develops economies of scale, creates efficiencies, reduces redundant infrastructure costs, and develops a greater potential for alternative energy projects

COMMONWEALTH NORTH Study Group Findings 3. In order to mitigate the high cost of energy in rural Alaska, dependency on diesel consumption must be reduced through increased efficiencies and utilization of economically viable alternatives

COMMONWEALTH NORTH Study Group Findings 4. A single statewide entity could coordinate energy generation and transmission project selection and advocate for all regions of the State in a balanced fashion

COMMONWEALTH NORTH Study Group Findings 5. Ensure high-value and effective investments in energy projects, and provide a “one stop shop” to deal with permitting and federal regulators

COMMONWEALTH NORTH Study Group Findings 6. Alaska should strive to eliminate the need for the Power Cost Equalization Program by reducing the electric rates paid by rural consumers to levels comparable to those paid by consumers on the Railbelt

What Alaskans Spend on Energy From 2010 Alaska Power Statistics: Electricity revenue$924 mm Gas revenue – Southcentral $536 mm Diesel – Fairbanks area 250 mm gallons Diesel – Kodiak, Copper Valley, SE 68 mm gallons Diesel – Rest of state 63 mm gallons TOTAL 381 mm gallons Diesel value at $4.00/gallon $1,524 mm Annual cost of electricity/heat $2,984 mm Expenditure in 20 years $59.7 billion