Regulatory Commission of Alaska Approves Chugach Electric Association's Economy Energy Transactions Tariff

Strategic Insights -

The Regulatory Commission of Alaska has approved Chugach Electric Association's (Chugach) tariff for economy energy transactions, which enables the sale of electricity generated from Chugach's Beluga River Unit (BRU) gas to other utilities. The approved tariff allows for case-by-case determination of the rate for economy energy transactions, based on Chugach's incremental energy cost and the buyer's decremental energy cost. The tariff also includes provisions for documentation requirements, wheeling charges, and late payment charges.

Key Takeaways:

  • The Regulatory Commission of Alaska has approved Chugach Electric Association's tariff for economy energy transactions.
  • The tariff allows for the sale of electricity generated from Chugach's Beluga River Unit (BRU) gas to other utilities.
  • The rate for economy energy transactions is determined on a case-by-case basis, based on Chugach's incremental energy cost and the buyer's decremental energy cost.
  • The decremental energy cost for a unit which would not operate as a result of the economy energy transaction is the average cost of power during the period of the transaction for that unit if it had been used to produce the energy purchased as economy energy.
  • Market price for BRU gas used for economy energy sales shall be the greater of Chugach's opportunity cost of gas for meeting firm load requirements on its system or 90% of the Cook Inlet Prevailing Value of Gas most recently published by the Alaska Department of Revenue.
  • Chugach shall offer BRU natural gas volumes to ENSTAR Natural Gas Company (ENSTAR) for purchase if ENSTAR offers more for the natural gas volumes than the market value of the gas.
  • Chugach shall credit the amount of the proxy market value of such gas to its members if Chugach uses gas sourced from its ownership interest in the BRU to generate electricity for economy energy sales or sells gas from its ownership interest in the BRU to ENSTAR.
  • Documentation requirements include estimating and documenting the margin Chugach will earn on economy energy sales using the market value proxy to determine the value of BRU gas used as fuel.
  • Wheeling charges shall be assessed pursuant to Chugach's Transmission Wheeling Service tariff and applicable ancillary services.
  • Late payment charges will be increased 1 percent per month on amounts unpaid after 20 calendar days from the date the bill is rendered.

Statistics:

  • The tariff was filed on April 9, 2021.
  • The Regulatory Commission of Alaska approved the tariff on May 21, 2021.
  • The effective date of the tariff sheets is May 24, 2021.
  • Chugach Electric Association, Inc. is a member-owned, not-for-profit electric utility serving over 50,000 members in the Chugach region of Alaska.
  • The Beluga River Unit (BRU) gas is a major source of energy for Chugach Electric Association.

Sources:

  • Regulatory Commission of Alaska, Tariff Advice No. 505-8, May 21, 2021.
  • Regulatory Commission of Alaska, Tariff Advice No. 385-121, May 24, 2021.
  • Chugach Electric Association, Inc. P.O. Box 196300 Anchorage, AK 99519-6300.