RTO tariff subcommittee meets Thursday on transmission costs

A handful of technical experts will meet by teleconference Thursday afternoon to argue over a transmission tariff. It sounds like the dull end of Alaska's energy calendar. It may be one of the most consequential.

The Railbelt Transmission Organization's Tariff Subcommittee convenes at 2 p.m. Thursday to work through tariff matters. It's one of three closed advisory groups meeting this week. All three are shut to the public under RTO bylaws that exempt subcommittees from open-meeting rules. None can set policy on its own. That authority sits with the RTO Governance Committee, which meets publicly.

What they're recommending on is the financial plumbing of the largest electrical grid in the state. The interconnected Railbelt system runs the length of populated Alaska and most of the state depends on it for power.

The Legislature created the RTO in 2024 and ordered it to build an open access transmission tariff. That tariff replaces the wholesale charges each Railbelt utility currently assesses with a single mechanism that fairly recovers and equitably allocates the cost of operating the backbone transmission system. Today, each utility owns its own lines and charges the others "wheeling" fees to move power across them. The new tariff scraps that patchwork and instead allocates the cost of the backbone system to utilities based on the benefit each derives. The point, ultimately, is to let utilities buy the lowest-priced power available regardless of who generates it.

The urgency isn't abstract. Cook Inlet gas fuels roughly 75% of Railbelt electricity generation, and that supply is thinning. Hilcorp, the dominant producer, put utilities on notice back in 2022 that it had no "line of sight" to produce gas beyond its existing contracts. Enstar has said its new five-year Cook Inlet supply contract starting in 2026 will run between $12 and $13 per thousand cubic feet depending on royalty relief. That's up from the roughly $9 range that was typical in the past.

A cheaper, more open grid is the hedge. Golden Valley Electric Association members, at the northern end of the Alaska Intertie, pay some of the highest rates on the Railbelt. Their access to cheaper southern power is limited by the lines themselves. DOE has flagged that upgrades are needed to relieve existing capacity constraints on the Alaska Intertie and to add transmission paths parallel to constrained single lines. That's why the federal government put $206.5 million into a Railbelt grid modernization project involving the state, four Railbelt cooperatives, a municipal utility, the RCA, and local labor unions. Work that still hinges on a state funding match. Among the targets: moving more low-cost Bradley Lake hydro north, with line upgrades from Bradley Lake toward Kenai Lake and new battery storage at Anchorage, Fairbanks and Soldotna.

New transmission only lowers bills if the rules for using it are sound. Writing those rules is Thursday's closed-door agenda.