Oil price surge shows need to diversify fuel sources for local electric supply
Published Tuesday, April 29, 2008
There may be some folks at the GVEA annual meeting this evening who are angry about what’s happened to electric rates, which are 70 percent higher than five years ago.
The frustration is understandable, but don’t take it out on GVEA. The biggest reason rates are so much higher today is that oil wasn’t pushing $120 a barrel five years ago.
If the cooperative didn’t plan for an unprecedented rise in oil prices, then neither did the federal government, the state government or anyone in American industry.
A recent New York Times article quoted the words of former energy secretary James Schlesinger, who once said that we deal with energy issues in one of two ways, “complacency or crisis.”
Decades of complacency on the local, state and federal level are making the current crisis worse.
And residents of Alaska find themselves in the strange position of hearing about extra billions rolling into the state treasury, while thousands scramble to pay for heat and light.
On the local level, with the benefit of 20/20 hindsight, it’s clear that we’d be better off at the moment with greater diversification of fuel sources and increased conservation. The former will take time, while the latter is the best bet for immediate savings.
For 22 years, the fuel adjustment on GVEA bills amounted to a credit. In 1999, the average customer received a $20 credit. Today, the average residential customer pays a $44 monthly surcharge, thanks to surging oil prices.
Those who might feel inclined to complain can do other members a favor by focusing on what should be done to increase conservation and reduce the high energy costs that add to our cost of living.
Registration begins at 6 p.m. The business meeting is to begin at 7:30 p.m.
•••
ALASKA AIRLINES: Stock analysts continue to speculate that American Airlines might want to acquire Alaska Airlines in the wake of the Delta-Northwest merger.
If that happens, it won’t be good for Alaska, the state.
Meanwhile, the Alaska Airlines mileage program was voted tops for the fourth time by readers of InsideFlyer magazine.
To deal with staggering fuel bills, Alaska Airlines said it will start charging $25 for a second bag this summer, but not on flights within the state or for first-class passengers and those in the top tier of the mileage program.
On May 21, the fee for booking through reservations and airport sales agents will go from $10 to $15, while the cost for overweight baggage will rise from $25 to $50. The cost of carrying a pet in the cabin will go to $100 one way, while the fee for unaccompanied minors will be raised from $30 to $75.
•••
BENEFIT: Erica Tomsha, 23, strives to keep a positive attitude in face of difficult circumstances.
Friends and acquaintances in Fairbanks are planning an event Sunday at the Silver Spur to help her a bit with some overwhelming medical expenses as she battles breast cancer.
The spaghetti feed benefit also includes a silent auction, guitar raffle, live music and assorted prizes. The event starts at 4 p.m. Sunday.
The organizers want to get the word out early so that those who would like to donate door prizes and auction items have a chance to contribute. Plus, if you are musician who would like take part, your help would be welcome.
Call 452-4500 or 456-6300 for more information.
In addition to the Silver Spur, the Music Mart and Laborers Union Local 942 are backing the event. Donations will be accepted at the door.
If you have an items you would like to donate, bring those items to the Silver Spur by Friday. Re-gifting is acceptable. Donations of spaghetti, canned tomato sauce and hamburger would be welcomed.
If you want to sell raffle tickets for the $1,200 guitar, contact Melissa at the Silver Spur, 456-6300.
Donations can be made to the Erica Tomsha Benefit Fund at Denali State Bank. Send checks to Denali State Bank, Box 74568, Fairbanks, AK 99707
•••
ELTON JOHN: A lot of celebrities and pop stars have appeared in Fairbanks over the years and there is no objective measure of who is the biggest show biz name to perform here, but Elton John would be close to the top.
Who else? Among the names that come immediately to mind are Ray Charles, James Brown, Bob Hope and Louis Armstrong. Send me a note on where you think John belongs on the all-time list.
The tickets for the local show are to be $75 and $115, plus fees. The tickets in Las Vegas for his show at Caesars Palace range from $131 to $296, but those come with one drink coupon.
Community Discussion
Newsminer.com doesn't necessarily condone the comments here, nor does it review every post. Read our full user's agreement.
We need to show up in force tonight and let the GVEA board know in no uncertain terms that we need to diversify our power generation. With crude oil setting new records everyday this can not wait! The current 50% fuel surcharge we now pay based upon $80 a barrel crude prices 3 months ago. When the next rate cycle begins we will be paying close to 25 cents a kilowatt! Unlike Juneau we will be paying this rate until GVEA can shut down their diesel and naptha generators. We need to demand that the GVEA board immediately develops a long term plan that relies on petroleum products from the refinery as a BACKUP fuel source only. Coal and natural gas rates have NEVER been as volatile as the petroleum prices. As of today coal is nearly 8 times CHEAPER per BTU than the naptha and diesel that provides 40% of our power.
Renewable wind and hydro power has a large capitol cost but pays huge dividends in the long run. The lowest cost generation in Alaska comes from hydro projects that seemed expensive at the time. If the political will is there we could tap into the BILLIONS and BILLIONS of surplus oil revenues to fund capitol energy products to benefit all Alaskans!
Do not be complacent! This is your member OWNED utility and tonight is your chance to get involved.
Elton is not worthy of shinning the shoes of Bob Hope,, how dare even compare the two;,,,
Dermot, you're too defensive of the GVEA Board. Independent oil experts and academics predicted peak oil more than 20 years ago, just when GVEA was making decisions to shy away from Hydro and Coal in favor of oil. For example, in the mid- 1950's Dr. M.K Hubbert, a former Shell oil geologist, predicted that the US peak oil discovery/depletion curve would occur in the early 1970's, and it did. Shortly after, he went on to predict world peak oil to occur sometime about the turn of the century. A decade ago, others, such as Dr. K. Deffeyers, who spoke in Fairbanks last year, used the same techniques to refine the world peak oil estimate to about 2007-2010. What we are experiencing in energy costs is absolutely no surprise -- it was predicted not by gloom and doomers by respected academic economists and geologists.
Yes GVEA, like the government, may have been complacent in the 1980's and 1990's for GVEA to have decided, and been permitted to put most of it's energy eggs into one oil basket, but there WAS plenty expertise yelling loud and clear that diversification would be better. Decisions to build more oil-fired power plants were being made just when the peak oil predictions were deemed reliable by many observers, not just some fringe groups. That is why diversification on the GVEA Board is so critically important. Except for one member, their Board is very susceptible to groupthink.
The GVEA coooperative is to be lauded for its SNAP program, but unfortunately that is too little to late. We need a "Manhattan" like project to develop and implement alternatives like hydro, wind, solar, and of course our greatly sought-after North Slope natural gas. Hopefully we won't be so stupid as to put all our egss in that basket either. In the meantime, I'll keep writing letters to politicians and cutting more firewood and looking into solar electric and hot water.
Sustainable, renewable power is possible. Kodiak has recently mandated that 95% of it's power will be from renewable sources by 2020. Copper Valley is currently planning on increasing their hydroelectric generating capacity in the wake of rising oil prices. GVEA in the meantime is burying it's head in the sand and hoping that oil will go back to $40 a barrel. Wind generation plants in Healy and Delta could replace our dependence on refined petroleum products. A fast track approach to developing the Nenana gas basis could completely change the energy outlook in Fairbanks. The Susitna hydro project could turn back our rates 10 years and provide renewable power till 2110. Come on GVEA pull your head out of the sand!
What's going on with the unused clean coal plant in Healy?
Our state government has been complacent in addressing our energy needs all across Alaska. Fairbanks is just beginning to feel the extreme end of the energy stick. We must have a state-wide energy policy and plan so that ALL Alaskans can enjoy low cost energy.
We need to insist that our state legislators call themselves into a special session to address our energy crisis in our communities. They need to create an Energy Czar by legislation and convert the Alaska Energy Authority into the Department of Energy to work on our energy needs.
While we are waiting for long-term solutions, we have to address the energy problems we are having now. We need to make a call on our Alaska State Royalty Oil, have it refined at Flint Hills, and have the heating fuel, gasoline, aviation fuel, diesel, and propane delivered to ALL Alaskans at no more than $3.00 a gallon.
Finally we must ask our legislators to develop an energy reimbursement program that would reimburse communities that waive a sales tax on electricity and fuel sales.
don't waste your time with the GVEA clowns! It is never their fault that our electric bills are so high....it those BIG OIL CLOWNS they say. But wait BIG OIL says its not their fault either. Never ending shift in blame. We as consumers should just get used to taking where the sun don't shine and shift our energy from complaining into finding a second job to support the corporate greed of GVEA and the like! What criminals!!
In addition to my earlier commments on energy, we need to create a state-wide energy grid to tie all of our communities together into one grid so that we can really diversify our energy sources. This strategy would ensure that we have long-term, low-cost, reliable energy into the next century. We cannot be thinking of only Fairbanks, Anchorage, or Juneau. We need to be working together to make sure that all of our state can develop and all of our people can become wealthy.
hey andora....distract yourself with some more useless energy savings crap. Your doing exactly what GVEA and the BIG OIL companies want you to do and that is waste your time ignoring the root of the problem....corporate greed. We should all bike to work and move into tent communities that heat their tents with fecal matter and eat tree bark! Get realistic and get your head out of the clouds. Look what alternative fuels like ethanol have done to the global hunger problem. It takes 400 lbs of corn to produce 25 gallons of gas. Great alternative when people around the world are starving to death. Environmentalism is a luxury not a reality to the majority of the world.
andora: DEAD CENTER OF THE BULL'S EYE. Addressing the Royalty-in-kind issue for the benefit of ALASKAN energy needs at affordable and stable rates would have the quickest short term relief.
Fairbanksgas: I agree with you that coal and other alternative energy solutions including wind power for diversification and long range energy solution needed to be fast tracted.
spruce: RIGHT ON about GVEA's SNAP program of being to little to late. The SNAP program needs a heave dose of kick in the pants to get alternative energy solutions out of the clouds and into service.
We need to get the other Healy coal plant online now, no reason for it sitting the last 10 years not being use....... also need to work on hydro power, if we can't get Susitna hydro project, need to look at some smaller hydro projects, the Jack River in Cantwell would make a good small hydro project, it could possible put out the same amount of power that the older power plant in Healy produces now.... and it is close the the Sub-station in Cantwell, it could be one of the cheapest and quickest power source to build, alot cheap then the 280 million plant setting in Healy not running..... Get some wind Power going in Healy and the Broad Pass area.......
Gordon-
I can't recall all the stories.
Why isn't it in use?
GVEA sued or counter-sued who? The state? Because the plant alledgedly didn't work as was expected? Will it work good enough to help get us through in the immediate?
I mean, what is up with the Healy coal plant?
Did GVEA use our so-called coop money for the suit? Is that one of the "projects" they say upped our bills?
What about the intertie? How are all the much-touted battery back-ups or whatever helping?
I don't trust anything that comes out of GVEA's mouth anymore.
GVEA is a cooperative. If you don't like the way it is run,then get involved.
Name-calling is not productive.
In fact, it's the easy way out.
There are solutions,but they require work and greater involvement by members of the cooperative. Dismissing GVEA's board as "clowns" is not fair to our neighbors and will not lead to progress.To quote Red Green, "We are all in this together."
Dermot: Thank you for the reality check, "clowns" make you laugh. There is more than enough blame to go around; it is solutions to the problem that requires answers and implementation.
And as newspaper, there are some hard questions as to why the State of Alaska's royalty oil price to GVEA is what it is, as well as, why rural Alaska is paying the highest price for fuel and electricity in the Nation. ALASKAN's need to know.
Does anyone else see the humor in Dermot not wanting us to call the board "clowns" and then quotes Red Green?
I do not believe they are clowns but just unsure what to do as there is no immediate answer to the problem.
Everybody should go to GVEAs web site and read about the Healy coal plant as it does explain who paid for what and why it is not running. I have nothing to do with GVEA except paying huge bills. I also believe GVEA could have done more to settle the ownership issues of the new Healy plant but the more goverment agencies involved the slower it goes. It seems to me that GVEA was looking ahead and trying to keep rates down with the new Healy coal plant. Unfortunately for all of us the new technology did not work and GVEA did the right thing by not accepting ownership of something that did not work. If they had we would be paying for trying to fix it.
The only one who can fix this is the state. They are the only one in Alaska getting rich over this high oil at the expense of the residents. Most of our politicians are acting like a bunch of little kids standing around the Christmas tree wondering how much they are going to get. The only way that all the residents of Alaska can get immediate help state wide is for the state to drop the price of royalty oil to the refineries and require the refineries to sell at that reduced rate. It would cost less for the refineries to make our heating oil. They have to pay more for the oil they use in the refining process when prices are high also. GVEA could lower electric rates because of cheaper oil. Our heating oil would go down. Fuel flown in to villages would go down. It is possible even LNG being trucked to Fairbanks would go down because of reduced fuel costs for transportation. Fishing boats could afford to go out. Our economy is going to crash a long time before a gas line is built if something is not done now.
Do you hear all the people calling for "someone" to FIX IT? At the meeting last night, how many local politicos were present? The mayors? How about local legislators or representatives? There wasn't anyone present to carry the message to the State leverl. The level of apathy here is high as ever. We don't like the results, so rather than get involved to see what we can do to help, we name call and insult. Chest pounding and being the loudest voice in the room still doesn't make you the most correct. Turn your frustration into action. Become involved, be a volunteer, get out of your house to do something positive in the community and while you're gone, turn off the lights and turn down the heat, it will help cut your bills. We have become so spoiled in our abuse of resources that we are completely unwilling to accept any responsibility for correcting the problem.
Post a comment
Commenting requires registration.