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AEA updates Senate Finance on rural energy needs: bulk fuel, circuit riders, PCE and renewable grants
Summary
The Alaska Energy Authority told the Senate Finance Committee that aging bulk fuel facilities, a reduced federal funding stream for circuit riders, and pressures on the Power Cost Equalization program are driving capital requests and federal grant work across rural Alaska.
Curtis Thayer and Tim Sandstrom of the Alaska Energy Authority briefed the Senate Finance Committee on AEA programs that support rural communities, including bulk fuel upgrades, rural power system upgrades, the Power Cost Equalization (PCE) program, circuit riders, and renewable grant programs.
Tim Sandstrom, chief operating officer of AEA, told the committee AEA currently has two projects under way in Scammon Bay: a major bulk fuel facility upgrade and a tank repair. "AEA is currently actively involved in the bulk fuel systems in Scammon Bay at the beginning of that project, and it is a fully funded project," Sandstrom said.
Thayer said AEA’s bulk fuel upgrade work and 3-D condition assessments have shown many tank farms and powerhouses are decades old and that deferred maintenance needs exceed $1 billion. He said AEA maintains a prioritized watch list of roughly 25 communities that receive top priority when funding is available; the program covers more than 400 bulk fuel facilities statewide.
On the Power Cost Equalization program, Thayer said the current annual budget for PCE is about $48 million and that the program serves about 91 electric utilities, roughly 82,000 Alaskans and up to 92 communities. He said the PCE endowment is managed by the Alaska Permanent Fund Corporation and hovers near $1 billion. Questions from senators probed how the PCE floor is calculated and how rail-belt price changes affect available PCE funding; Thayer said the PCE formula ties the PCE floor to retail power costs in Anchorage, Fairbanks and one other major community and that those prices affect available funding under statute.
Senators and AEA staff discussed circuit riders — AEA-employed technicians who travel to rural communities to provide training and emergency response. Thayer said federal support that once paid several hundred thousand dollars of circuit rider costs has diminished to less than $50,000, and AEA has requested $710,000 from the PCE endowment to continue the program.
Thayer and the committee also reviewed several federal and state grant programs: Solar for All (a $62.5 million competitive grant AEA administers with Alaska Housing Finance Corporation), two home-efficiency/electrification rebate programs totaling $74 million, and the Renewable Energy Fund (REF). Thayer said the REF, established in 2008, has invested more than $327 million across roughly 295 awards since inception and that many current projects statewide began as REF pilots.
AEA highlighted a pause in the National Electric Vehicle Infrastructure (NEVI) program funds administered through the Alaska Department of Transportation; Thayer said the federal program was paused while federal guidance was updated and noted proposed congressional actions that could reallocate the funds.
On advanced technologies, Thayer said AEA is following micro‑reactor (small modular nuclear) development and coordinating with the University of Alaska, but the agency has not committed funding and has focused near-term work on powerhouses and bulk fuel upgrades.
Ending: Senators asked AEA to provide an updated BTU-equivalent comparative cost analysis across fuels and regions and requested lists and status updates by district for REF projects and the AEA watch list for powerhouses and bulk fuel facilities.
