MEA seeks new power supply as its Hilcorp gas contract winds down

Matanuska Electric Association is asking power producers to bid on new electricity supply, with proposals due Oct. 23. About 84% of MEA's power comes from Cook Inlet natural gas, and its all-requirements contract with Hilcorp, the single deal covering all the gas it needs, expires April 1, 2029. MEA has told legislators to expect member bills to rise roughly 5% a year for three years, with imported liquefied natural gas after 2029 potentially adding $21 to $31 a month to residential bills.

The cooperative wants capacity, meaning generation it can call on, the energy it produces, and ancillary services, the moment-to-moment balancing of supply and demand. It would buy them through power purchase agreements, from existing or new thermal, renewable, storage or regulation projects, including ones outside its territory or shared with other utilities. The one public page of the solicitation gives no megawatt figure, contract term or delivery date.

The rest is not public. A confidentiality agreement must be signed before a proposer receives the documents, and bidders may contact MEA only through a single procurement mailbox.

"Our Board has directed us to leave no stone unturned and keep all options on the table as Alaska's energy landscape continues to change," MEA chief executive Tony Izzo said.

A second MEA solicitation, for dependable generation capacity to meet what it calls near-term resource adequacy, closes Oct. 9. Its public notice states no quantity either.

Two things are happening in the same window. A day before issuing the supply solicitation, MEA began surveying members about data center development in its territory, asking randomly selected members by email and text, through Alaska Survey Research, about rates, reliability, energy supply, infrastructure and community impacts. Very large new customers can spread a utility's fixed costs across more sales, or strain a supply the cooperative is already shopping to replace.

"The survey does not mean MEA has approved a specific data center project or made a decision to bring data centers to its system," the notice says. MEA says its tariff already assigns the cost of serving very large new loads so it isn't shifted onto existing members. State lawmakers have separately advanced bills calling for clear rate-setting and community-engagement rules before data centers connect to a utility's grid.

MEA serves more than 58,000 members across nearly 4,900 miles of line. Izzo retires next spring after more than 45 years in the industry, and Clay Koplin of Cordova Electric Cooperative becomes chief executive Jan. 7. MEA says Izzo will advise it on gas supply into the new year.