Economic Feasibility of North Slope Propane Production and Distribution to Select Alaska Communities

Could propane from Alaska’s North Slope reduce energy costs for electric utilities and residential space heating, water heating, and cooking demands? We explored the hypothesis that propane is a viable alternative for fourteen selected communities along the Yukon and Kuskokwim Rivers, coastal Alaska, and Fairbanks. Our analysis forecasts propane and fuel prices at the wholesale and retail levels by incorporating current transportation margins with recent analysis on Alaska fuel price projections. Annual savings to households associated with converting to propane from fuel oil can be up to $1,700 at$60 per barrel (bbl) of crude oil, and amount to $5,300 at$140 per barrel.1 Fairbanks residents would benefit from switching to propane for all applications at crude oil prices of $60/bbl. Interesting to note is that switching to propane for domestic water heating makes more sense at lower oil prices than conversions for home space heating. Three of the fourteen communities are projected to benefit from switching to propane for home heating at crude oil prices greater than$80 per barrel, and four communities at crude oil prices of more than $110/bbl. On the other hand, nine communities would benefit from conversion to propane for water heating as crude oil prices reach$50 and above. The realized household savings are also sensitive to assumptions surrounding the operating cost of the production facility and barge transportation delivery costs.Alaska Natural Gas Development AuthorityIntroduction / Experimental Methods / Production and Storage / Transportation Costs / Electric Utility Energy Demand Assumptions / Household Energy Demand Assumptions / LImitations/ Extensions / Results and Sensitivity Analysis / Conclusion / References / Appendix: Associated Excel Workbook

Alaska Fuel Price Projections 2010-2030

We generated Low, Medium, and High case fuel price projections for the years 2010-2030 for the following fuels: Incremental natural gas in Southcentral Alaska delivered to a utility-scale customer Incremental diesel delivered to a PCE community utility tank Incremental diesel delivered to a home in a PCE community Incremental home heating oil purchased in Anchorage, Fairbanks, Juneau, Kenai, Ketchikan, Palmer, and Wasilla This memorandum provides documentation of the assumptions and methods that we used. A companion Excel workbook contains the detailed projectionsAlaska Energy AuthorityIntroduction / General methods and assumptions / Natural Gas / Fuel Oil / Reference

Factors Influencing Success of Wind-Diesel Hybrid Systems in Remote Alaska Communities: Results of an Informal Survey

In 2008 the Alaska State Legislature created and funded the Renewable Energy Fund. As a result of this available funding, the number of wind-diesel hybrid power systems is increasing dramatically in rural Alaska. Development, integration, and operation of complex wind technologies in remote, rural communities are challenging. With multiple communities in Alaska installing and operating these systems, it is important to understand the factors that influence successful completion, operation and long-term maintenance of projects (Fay, Schwoerer and Keith 2010; Colt, Goldsmith and Wiita 2003). As of fall 2011, over $107 million has been spent constructing wind projects in 27 communities (Alaska Energy Authority 2011). The majority of these systems were built since 2008 and utilized$50.8 million in appropriations from the REF by the Alaska legislature (Fay, Crimp and Villalobos-Melendez 2011) This report summarizes the findings of an informal survey conducted on the most important characteristics of a successful wind-diesel hybrid power project in small remote rural communities. The survey was done to help guide socioeconomic research in Alaska on community capacity under a U.S. Department of Energy project entitled “Making Wind Work for Alaska: Supporting the Development of Sustainable, Resilient, Cost-Effective Wind-Diesel Systems for Isolated Communities”.United States Department of Energy. EPSCoR project Grant DE-PS02-9ER09-12.Introduction / Methods / Findings / Conclusion and Limitations / Reference

Alaska Fuel Price Projections 2010-2030

We generated Low, Medium, and High case fuel price projections for the years 2010-2030 for the following fuels: Incremental natural gas in Southcentral Alaska delivered to a utility-scale customer Incremental diesel delivered to a PCE community utility tank Incremental diesel delivered to a home in a PCE community Incremental home heating oil purchased in Anchorage, Fairbanks, Juneau, Kenai, Ketchikan, Palmer, and Wasilla This memorandum provides documentation of the assumptions and methods that we used. A companion Excel workbook contains the detailed projectionsAlaska Energy AuthorityIntroduction / General methods and assumptions / Natural Gas / Fuel Oil / Reference

Alaska Fuel Price Projections 2014-2040

The Alaska Fuel Price Projections are developed annually for the Alaska Energy Authority (AEA) for the purpose of estimating the potential costs and benefits of renewable energy projects. Project developers submit applications to AEA for grants awarded under the Alaska Renewable Energy Fund (REF) program. These fuel price projections are used to evaluate the economic feasibility of project applications; economic feasibility is only one of many factors of the project evaluation process. Economists at the Institute of Social and Economic Research (ISER), University of Alaska Anchorage (UAA) have completed seven previous Alaska Fuel Price Projections since 2008 (all available at: http://www.iser.uaa.alaska.edu/). In this report we present the methodology for the most recent fuel prices projection. In addition to their use for the REF review, ISER researchers use the projections for other economic research and energy project evaluations. The fuel price projections also fulfill an important need for price information and are used by many stakeholders in addition to AEA. As a result of their broad use among the public, we expanded what used to be cursory notes on methodology. Our intent is to provide more detailed information to the report’s readers and users of the fuel price projections.Alaska Energy AuthorityBackground / Projection vs. Forecast / Data Sources / Projections / References / Appendix A. Projection methodolog

All-Alaska Rate Electric Power Pricing Structure

Economists at the Institute of Social and Economic Research, University of Alaska Anchorage were asked to research the potential options and impacts of establishing an All-Alaska Rate as an alternative to the current Power Cost Equalization (PCE) program funding formula. We were asked to provide a history of the PCE program and information on electricity rates and patterns of consumption across regions of Alaska. This report provides the results of this analysis. Alaska is unique in many ways, including its consumption and pricing of electricity. There are large regional differences in consumption and prices that result from proximity to different types and quantities of resources. Differences in remoteness and population size also influence costs. Urban areas in the southern Railbelt benefit from larger economies of scale and access to natural gas and hydroelectric resources; the majority of hydroelectric facilities are located in Southcentral and Southeast Alaska. Most communities in rural Alaska depend on volatile and high price fossil fuels for the generation of electricity. The Alaska statewide weighted average residential rate for electricity (17.6 cents per kilowatt (kWh) in CY2011) is higher than the U.S. average of 11.8 cents per kWh (U.S. EIA, 2012). Alaska now trails behind Hawaii (34.5 cents), New York (18.4 cents) and Connecticut (18.1 cents) based on ranking of average residential price per kWh. Hidden in the Alaska statewide average is considerable variation with some communities paying less than the national average and some paying considerably more.Senate Finance Committee, Alaska State Legislature.Executive Summary / Introduction / Review of Current Residential Consumption and Price of Electricity / Power Cost Equalization History / Electricity Rates and Levels of Consumption / Customer responsiveness to price changes / All-Alaska Rate / References / Appendix A. Price elasticity of demand in PCE communities / Appendix B. PCE funding levels per year / Appendix C. PCe appropriations and disbursements over time / Appendix D. Communities/Locations in the Railbeld region / Appendix E. Residential and effective rates of PCE communities, 2001-2010 / Appendix F. Effective residential rates and consumption of electricity in PCE communities, 2008-2010 / Appendix G. PCE communities characteristics of importance as factors of electricity production and deman

Research Summary No. 73

This publication is mostly about electricity in Alaska: how it’s generated, how much fuel is used to produce it, how fuel sources have shifted over time, and how prices vary. An inside foldout map shows how individual communities throughout the state generate electricity. But besides looking in detail at electricity, it also reports more broadly on energy in Alaska. It includes our estimates of all the types of energy produced and consumed in Alaska, and summarizes changes over time in the prices and amounts of energy Alaskans use

Economic Impact Analysis Remote Alaska Parks Case Study: Katmai National Park and Preserve

National Park Service. National Parks Conservation Association

Economic Impacts of the South Denali Implementation Plan

This study estimates the economic effects of carrying out the South Denali Implementation Plan. The plan provides for construction of new visitor facilities in the South Denali Region. ISER economists used the IMPLAN input-output modeling system to project the jobs, income, and sales due to 1) initial construction activity; 2) ongoing operation and maintenance expenses; and 3) additional visitation and visitor spending attributable to the new facilities. The model results include the effects at the Mat-Su Borough and statewide Alaska levels. Local area impacts are also estimated. Suggested Citation: Colt, Steve, Fay, Ginny, Szymoniak, Nick. 2008. Economic Impact of the South Denali Implementation Plan. Prepared for the National Park Service, Denali National Park and Preserve and the Matanuska-Susitna Borough Planning and Land Use Department. Anchorage: University of Alaska Anchorage Institute of Social and Economic Research.National Park ServiceExecutive Summary / Introduction / Economic Impact Analysis / The Project Plan / Baseline Situation / Scenarios of Future Activity / Result

Alaska Fuel Price Projections 2009-2030

Alaska Energy AuthorityIntroduction / General Methods and Assumptions / Natural Gas / Fuel Oil / Reference