OPINION: What Natural Gas Imports Could Mean for You as an Energy Consumer in Alaska

Updated: 20 minutes ago Published: 20 minutes ago

Alaska Railbelt communities, including the area served by Chugach Electric, are facing significant energy concerns due to an impending natural gas shortage. There has been much discussion recently about importing liquefied natural gas (LNG), with some expressing concerns that LNG is not an adequate solution to our energy problems. We understand the concerns of some Alaskans about importing LNG despite the vast reserves of gas on the North Slope. However, as the state’s largest utility, we cannot rely on hope that North Slope gas will be available soon, that there will be sufficient development in the Cook Inlet Basin, or that another project will be built in a timely manner to meet the region’s urgent needs.

Concerns have been raised about the potential increase in the electric bill due to the cost of LNG. Chugach’s electric bill will not increase by 50% if we import LNG. We have heard this and other numbers over the past few months. For Chugach Electric members, we estimate that the bill will increase by about 10% when LNG is imported in 2028. Why? Because only a small portion of the electric bill will be affected by replacing our current Hilcorp Alaska gas contract with imported LNG. Most of Chugach’s cost structure is not covered by fuel costs, including non-fuel costs associated with operating and maintaining our power plants, our transmission system, our distribution system and our customer service function.

We must remain focused on providing reliable electric service, reliable natural gas at a reasonable price, and increased diversity of electricity generation, including renewable projects. Currently, 80% of Chugach’s generation is generated using natural gas, with hydro and wind making up the remaining 20%. As we work to diversify our generation mix, Chugach needs a bridge fuel to a renewable future, and that is imported LNG.

Chugach has set a goal to reduce its carbon intensity, from a 2012 base year, by at least 35% by 2030 and by at least 50% by 2040, provided there is no material adverse impact on electricity rates and/or reliability. We recently updated our Integrated Resource Plan, which can be found on our website (chugachelectric.com), outlining our plans for the coming decades. Please review it.

We work every day to provide the most reliable and affordable generation we can to our more than 91,000 members and more than 113,000 metered sites. We always keep these goals and our members in mind when making decisions, and we know that affordable energy is essential to a strong economy. As a not-for-profit, member-owned cooperative, we are in this together.

Arthur Miller is the CEO of the Chugach Electric Association.

Mark Wiggin is chairman of the board of the Chugach Electric Association.

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