2026 Alaska Sustainable Energy Conference Wednesday part 3

Thank you very much, ladies and gentlemen, for having me here today and for joining us here in beautiful Alaska. I was born and raised just west of here in the Yukon and have been coming to the Yukon for my entire— or coming to Alaska for my entire life. And so when Governor Dunleavy invited me here to this conference, I naturally jumped at the opportunity.

The relationship between Alaska and Yukon is a deep and enduring one, and I think it's easy for us here across the North to get a little focused sometimes on some of the discussions happening at the national level between Canada and the United States, then we forget sometimes about the importance of those relationships at the state and territorial level. And that's where I want to start. I want to start by saying a brief word about our host and the enduring relationship between Yukon and Alaska. There is no doubt that Alaska is much bigger than the Yukon, both in terms of size and population, but in many ways our histories are shared and linked. Alaska was foundational to the creation of the Yukon back when it was created in 1898, but the relationship goes back much further than that, from the Tlingit people in the south to the Gwich'in people in the north.

There has been travel, trade, and family connections for millennia. Those links still persist today. And as northern jurisdictions tucked up here in the northwest corner of North America, like Alaska, we sometimes feel disconnected from our national governments and our political systems. The distance from here to Ottawa or to Washington is not just geographic, it's political. Political as well.

And like Alaska, that political and geographic distance is a significant challenge for us, but it's also the source of some of our greatest opportunities. Whether it is in the context of the development of our vast natural resources or the dynamics of our ever-changing geopolitical and strategic circumstances, there has never been a time when the North, the circumpolar North, has mattered as much as it does today. But the key to capitalizing on those incredible opportunities is energy, and that's why I'm so happy to be here today, and the timing of the presentation before is actually perfect given the importance of hydro in the Yukon. So I'll speak specifically about the Yukon now as well. As I've said, energy is key, but it's also a huge challenge for us.

It's arguably the biggest challenge that we face in the territory. More specifically, the generation of electricity to meet a rapidly growing demand is the most significant challenge that we face in the territory. In the Yukon, most of our communities are connected to our power grid. We have a— we do have a connected grid in the Yukon, but it is an isolated and islanded grid, so we are not connected to Alaska in the west, or British Columbia in the south, or Northwest Territories in the east. We are an isolated islanded grid.

Depending on the season, our grid has a maximum capacity of somewhere in the neighborhood of 150 megawatts. It's relatively small, and our communities are relatively small, but they, they are connected. And our system is based largely on hydro, hydropower that was built over the course of the '50s and '60s. There are 3 primary dams in the Yukon that provide over 90% of the power that we use in the territory. On an annual basis, those 3 dams provide, as I said, over 90%, and the balance of that comes from a mixture of diesel, LNG, and renewables, a mix of both solar and wind.

It's a system that has served us well, but we are quickly outgrowing it, unfortunately. Our energy planners project in the next 5 years, by 2030, we will need an additional 40 megawatts of solid baseload capacity. That demand is driven strictly by our own organic growth right now, our population growing and the, the increasing demand on our electrical system as a result of changing lifestyles. While this has been a problem that has been building slowly over the years, It certainly came to a head this past winter. Now, for those of you from Alaska, you'll know that this past winter was a particularly harsh one.

We saw sustained periods of extreme cold here in Alaska, but also certainly in the Yukon. In some of our northern communities, they saw just under 20 consecutive days of -40 or lower, which occurred You know, right around the Christmas holidays when it is the darkest and coldest in the— in here in Alaska and in the Yukon, one particular community saw a record-setting -55.7 for a number of days. That is an extreme level of cold even by Yukon or Alaska standards. And so, as you can imagine, that extreme cold put incredible strain on our grid and made us realize to a much greater degree than we had hoped how precarious our grid was at that time.

I was sworn in— I was elected in early November and sworn in at the tail end of November, and within just a few weeks of my swearing-in, I had to take a close look at plans for the Yukon to enact rolling blackouts in our capital city if we saw a continuance of that extreme cold. We didn't get there, we dodged that bullet, but it was an extremely harrowing experience for our energy utilities and for our communities that realized that we were on the verge of not having enough electricity to meet our demand. So that, that has made us realize that we face an extremely large challenge with energy. Both our short-term and long-term goals as a territory are dependent on solving that challenge. In the near term, obviously we have a— we'd like to be able to keep the lights on this next winter, but over the longer term we see incredible opportunity for the development of our natural resources in the mining sector, as well as the implementation of Canada's objectives around investment in military infrastructure in the Canadian North and in the Yukon.

So in order to reach those opportunities, we need to solve the problem of our power grid. So in short, we are doing two things. One, we are investing in the expansion of our generation capacity. So as the previous presenter indicated, that comes with some significant challenges on the hydro front. We're going through all the things that were outlined previously— relicensing, upgrading aging infrastructure.

Our three hydro dams, as I said, were built in the '50s and '60s, and are now at the point where they need to be upgraded and renovated to meet the modern demands of our grid. We're also investing considerably in thermal generation. So we're going to add both diesel and LNG capacity to our grid in the Yukon. Now, that's not ideal. We wouldn't like to be— we wouldn't choose to do that if we didn't need to.

But the situation requires it as we need that generation in place this coming winter. So we're going to add 15 megawatts of either diesel or LNG immediately. Permitting is underway and construction will begin this summer. And then we plan to build an additional 45 megawatts of thermal capacity over the next 5 years. The issue with thermal generation in the Yukon is clear.

It's probably the same as here in Alaska, or it's a bit different than here in Alaska. 100% Of the hydrocarbons that we burn come up, driven up in trucks from southern Canada. So there's obviously a significant cost with that. Although the thermal generation is reliable and dependable and works even at -55, it is costly. As well, we are looking over the long term at the possibility of joining our grid to the south.

So the Government of Canada has identified the possibility of connecting Yukon's grid to the lower, to the southern part of our country as a possibility over the next number of years. Now, that's not going to be an easy task. It's going to be one that's going to take some time. Could take as many as 10 or 15 years, but it's something that we are looking towards. And on the other side, we are looking to decrease or reduce the growth of our demand in the Yukon.

So the growth of demand has been driven by population growth, economic activity, and the explicit policy direction of electrification. Well, I think that electrification is a reasonable measure to take and a good step, But in the case of the Yukon, it's simply not tenable in the near term. So we've scaled back a number of the previous government's commitments around electrification. So we've reduced— we've eliminated the electric vehicle mandate that was in place. There were subsidies in place for electric vehicles.

We've removed all of those, and we have removed the policy imperative of pushing electric heat in the territory. I don't particularly like doing those kind of things, but it's absolutely necessary given the context of our need to reduce or at least slow down our rapid growth. So that combination of policy measures, both trying our best to reduce the growth of our demand and investment in the relicensing, upgrades to existing hydro, and addition of thermal will, we hope, in the near term stabilize our grid and allow us to return to a view where we can add additional renewable capacity to the territory's grid. That's our goal, and that's where we're going right now. And I think that's— it's a relevant conversation because I think it's very similar across the Circumpolar North.

You'll see similar situations in the other territories in Canada's North. Northwest Territories, Nunavut are different but face similar challenges. And certainly even here in Alaska, where you are isolated as well from the rest of the country by virtue of your geography. But I truly believe that if we can solve for that challenge, if we can solve for the challenge of energy, we will unlock incredible potential here in Alaska and across the North. And I think the way that we do that is by working together.

And that's why I'm so glad to be here in Alaska having conversations with the Governor, with the State of Alaska, talking about how we can work together to solve these mutual challenges. Because as we look across the Canadian North, we realize that the, the North is probably at a peak time in terms of attention being paid to us. There is obviously geopolitical strategic considerations that are driving that, economic development opportunities that are driving that, and the potential is great. But we need to solve that question of energy. And so that's why I'm so glad to be here today to have these kind of conversations with you, to connect with our colleagues here out, out, out west, and in some cases down south in Alaska, which is a rare one for, I think, most people to say.

But I am so happy to be here. So with that, thank you very much for the opportunity to provide you a bit of perspective on what's going on west of here— or east of here in the Yukon. And I look forward to connecting over the course of the rest of the conference. So thank you so much. Enjoy the rest of the conference.

Thank you, Kerry, for sharing that important perspective on building sustainable energy systems across the North. And now I believe we have some brief remarks from Alaska Senator Lisa Murkowski. If you would turn your attention to the screens, please.

Well, hello to all attending the Alaska Sustainable Energy Conference, and thank you to the governor and his team for again gathering so many great energy leaders, innovators, investors, policymakers, and community partners. The fact that so many of you are present underscores how much the conversation about Alaska has changed. Because you're not just there to discuss Alaska's future. You are there because you recognize that Alaska is the future. Alaska matters to our nation's energy security and our economic strength.

And Alaska remains geostrategic, capable of supplying not just the U.S. West Coast, but our allies and partners via beyond the Pacific. We can do that because we have world-class oil and gas resources. We have endless opportunities for hydropower, geothermal, wind, solar, biomass, and more. Unparalleled stores of critical minerals and precious metals, and equally important, the people. The people with the expertise and the determination to lead.

Working together with strong partners like Secretary Burgum, who we're excited to have back in Alaska, we've made some great progress at the federal level over the past year. As a delegation, we've built on a whole host of positive administrative steps, like the record-breaking NPRA lease sale and the partial lifting of PLO 5150, with significant legislative wins. And taken together, Those achievements will provide Alaska with greater access to our lands, new opportunities across our state, and more revenues from responsible development. I'm very proud of the progress that we've made and how hard the delegation is working to lock in every one of these opportunities. To refill taps, to commercialize our stranded natural gas, reverse our nation's dependence on foreign minerals, and of course, to pioneer the development of new technologies.

And all the while, creating good jobs for Alaskans, diversifying our economy, and strengthening our state budget. We know there's a lot to celebrate right now, but we also need to be mindful of a couple things. One, this work is still ongoing, and we have to see it through in securing as many investments, approvals, and permits as we can in a manner that will stand up in court when the challenges inevitably arrive, and then avoiding setbacks at all levels. And second, we cannot lose sight of the immediate challenges that many Alaskans are facing, particularly in our rural communities when it comes to high energy costs. Our state treasury cannot enjoy the benefit while our residents struggle with paying gas prices of, of up up to $15 per gallon, unable to power their communities or to fill their gas tanks to subsistence hunt or fish.

These costs are anything but sustainable and need to be a part of the conversation this week. We must find relief and flexibility to tide Alaskans over this summer and possibly into the winter. But we also need to deploy new systems using local resources that can lower costs over the longer term. So thanks again for the invitation to share a few words. More than that, thank you for being part of this conference and for contributing your ideas, your investment, and your expertise to Alaska's future.

Thanks so much and take care.

Thank you, Senator. Our next presentations pick up on that message from Senator Murkowski and our initial speakers this morning on addressing solutions to the cost of energy, particularly to rural Alaska, where communities are actively navigating the transition from diesel-dependent systems towards hybrid microgrids and new energy technologies. From Diesel to Hybrid: What the Evidence Shows in Rural Alaska Microgrids will explore the real-world performance of these systems, including reliability, affordability, operational challenges, and the lessons being learned as communities integrate renewable energy, storage, and advanced controls into existing grids. This discussion will also examine how community engagement, ownership structures, and local operational authority influence long-term project success and energy resilience across rural Alaska. Bailey Gamble is an engineer with more than a decade of experience serving rural Alaska through energy innovation, microgrid modeling, heat recovery, and control systems work.

Also joining us is Katya Karkanovich, who has led the development of numerous rural Alaska energy projects, including hydro, wind, solar, battery storage, wind-to-heat systems to— designed to reduce diesel use and strengthen community energy independence. Please join me in welcoming Bailey and Katya.

Hi, everybody.

Just waiting for the presentation to queue up.

Well, my name is Bailey Gamble. And I am an engineer with Alaska Village Electric Cooperative. And today I'm going to talk about an example project where we added a battery energy storage system to an existing wind diesel system in the village of Shaktoolik. This is a project that I poured a lot of life and time and brain power and even muscle power into, so I'm very happy to share about it. I think it was a successful project and it was also a tremendous learning opportunity that I hope to be able to share to others looking to, to develop or fund similar projects.

Alaska Village Electric Cooperative— we are a nonprofit utility cooperative serving 59 communities in rural Alaska.

The communities that we serve range in size from average loads of just under 100 kilowatts up to Bethel size with average load in the 4 to 5 kilowatt range. Um, Shaktoolik, a village in the Norton Sound region, is on the smaller side of that spectrum with an average load of around 128 kilowatts and a peak load of around 250 kilowatts. Um, AVEC, we own and operate a by the best supplier, Krones. And the microgrid controller is an AVAC custom developed by our now retired but forever legendary electrical engineer, Bill Thompson. I want to note on heat here, because this is a critical piece of the integration puzzle, any AVAC system that includes wind turbines also includes an electric heater tied into the cooling loop for the engines.

And the original reason for installing that was to have it serve as a dump load and provide frequency support as somewhere that we could send excess wind-generated power. Now, as we add battery and gain the ability to operate in a different way, sometimes turning diesels off, We gained a new need to come up with a heat source and were able to repurpose this electric heater as a source of heat. It's also important to note that all AVEC power plants use recovered heat, heat from the engines, to keep the offline engines warm and to heat the spaces, the power plant itself, employee living quarters, and storage spaces.

So maybe from that first slide, you can start to get an idea for why Shakhtyulik would have been a good candidate for the addition of BESS. You've got an average load of 128 kilowatts, and when you don't have battery, even if you have enough wind to cover the load of your community, you still have to keep a diesel engine online. And the reason for that is that you need to have that backup capacity in case the wind were to drop off. And you need the diesel to form the grid, to establish the voltage and the frequency on the grid. So you always have to have an engine online at a minimum load.

A typical minimum load for an AVEX system would be 50 kilowatts. So if you take that average load of 128 kilowatts, you subtract that diesel minimum load, that's how much wind power you can put onto the grid. So you can see that we could encounter quite often where we have excess wind that we're just having to curtail, that we're not able to put to use. And so those two problems of curtailing wind, not getting the most out of those turbines, and needing to have some sort of reserve capacity in the form of the diesel gensets, those problems are solved by integrating the bus. And that's the reason that Shaktoolik, based on its sizing of its components and its load, was a priority and compelling candidate for the best project.

We could talk shop about the challenges of the logistics of making construction projects happen in rural Alaska. All day, so I'll just touch on a couple of the ones that really stood out for me on, on this project. When we do a large project like stand a megawatt turbine, it will make sense for our contractors to barge out high-capacity heavy equipment. But for a relatively smaller project like a bass installation, we are going to have to work with the equipment that we have available in the village. And in Shakhtylyk, they have quite an impressive fleet of heavy equipment, but batteries are heavy and they are, you know, spread out over a large footprint in those modules.

There was, there was nothing, there was no piece of equipment in town that could lift that battery module fully loaded with the batteries. And it was the most physically demanding workday of my life when we realized that we would have to remove 80 120-pound battery cells in order to lift that module up onto its foundation and then put them all back in and quickly before they got rained on.

This is the best module. The battery lives in a conics-type container. The vendor, the supplier of the battery in this case was Cronus. It uses 9 40-kilowatt Oztec inverters for a total of 360 kilowatts power capacity and 432 kilowatt-hours of lithium iron phosphate battery cells. Those were Pylon Tech brand.

The heating for this, you know, because we're near to our power plant, we bring over hydronic heat and we have an electric backup. Layout, that was an important lesson for us. This is our second AVAC-owned battery. Our first is in the village of Stebbins, where we have a 1-megawatt turbine. That's a larger village.

And so in Stebbins, we packed in twice the storage capacity, and that meant a real packed battery container, 2 rows of battery cells. You wouldn't have been able to walk around in that one. Batteries would have been accessed from the exterior. And we encountered more challenges in temperature management in that layout than we did in the Shektoulik module where we have just one rack of batteries along one wall. You can walk inside of there and access those batteries from the inside.

And so we really landed on this layout. You know, if we needed twice this capacity, we'd do two modules next time. That was a successful aspect of this project. And then just to note that the location of this battery you know, over the berm in the back there, you have the Norton Sound. So it's also subject to that marine environment.

Year 1 performance, we were able to capture 178,000 additional kilowatt hours of wind. And that's a pretty big deal for a community of this side— offset of this size, offset an additional 11,000 gallons of diesel fuel. We were able to turn the engines off for 900 hours and put 20,000 additional kilowatt hours towards heat. We didn't quite meet the targets that we had initially set for ourselves, but we were really happy with this performance. You know, this was an active year of refinement and troubleshooting, and We're very hopeful that we'll beat these numbers in the next years.

We knew this, but we really learned it firsthand, me specifically, this being my first battery project. It's not something that you can build and walk away from. It required a lot of attention in order to optimize the integration. I'll hit on just some of the key points here. You know, we— the programming for the controller, the microgrid controller, was done by an engineer with decades of experience who has seen all kinds of scenarios and can anticipate those and include programming to accommodate edge cases.

But still, always, there's going to be events or scenarios that occur that you don't prepare for. So inevitably there will be a need for adjustments to programming, and we found that here. We also found that genset load sharing paralleling, that the best ones to see maybe a little bit tighter meeting of the parameters needed to share load than two diesel gensets needed. And so there was a need to Better understand and refine operations of the existing diesel system. And then a big one that we're still working on.

These are old plants. You know, some of these plants are decades, 4 or 5 decades old, and they were built in a time when no one would have imagined that they would be operating with the engines off on purpose for extended periods of time. They were built to cool engines, to remove heat quickly. Now when we add BESS and turn the engines off, we want the plant to be able to do exactly the opposite, to tighten up and not lose heat so that we can keep the engines and the space warm and so that we can do that with the least amount of energy possible. And so We have that existing electric heater.

We're able to use that as a heat source. I think we were surprised by just how much of that heat we needed. Plants are leaky because they could be, and it was helpful to be when the main objective was cooling. Now we have to be able to heat them too, so we're still actively working through that. I would say that overall, these kind of best projects, um, reveal our plants to to ourselves, and not necessarily flaws.

Of course, some flaws, but force us to understand our existing system in a new way.

So the battery technology works, and the battery was really is one of the lesser fussy components on the system. I think not meeting our targets It really was more due to just need to refine programming, some turbine downtime, some engine downtime. But the technology works and it works for rural Alaska. Integration does require time and attention in year one especially, but after year one as well. You know what continuous improvement looks like for us is continuing to dial in those controls to deal with this plant heating design.

You know, how do we tighten that plant up without making cooling harder for ourselves? O&M and training. You know, we've got more complex systems. We need a wider skill set amongst our team in order to be able to support these systems long term, continuously improving the operations of, of the base system, of the gen sets, and applying these lessons as we move forward.

I want to plant a seed really quickly here. We did get to put some color on this module while we were out there doing some repairs to the roof that occurred during barge transport. In between putting that repair paint on, we put some, some color and some life up on the battery. And in this case, we didn't have the time or the, or the budget to involve the community in the design and creation of the artwork. But that is something I have had the chance to do in a previous role with ANTHC.

And I just want to plant this seed because the battery is a boring rectangle from the outside, but it's doing some heavy lifting, right? It's really helping us optimize penetration of renewables and reduce that dependence on imported fossil fuels. But if you just look at it, you wouldn't know the miracle of what's going on inside there. So I think there's a lot of power and beauty in the use of art as a tool for engaging the community in these types of projects.

Sisto, to sum it all up, the technology works. The battery technology works, and it works for rural Alaska. These projects, they do reveal the nuances of our plants, of our systems to us, and it— that takes time. We need to get the system online and give it time to operate in order to have these nuances revealed. And also, we need time to be able to respond to those, such as this challenge of heating.

And so it's important to, to budget for that in, in, in these types of projects. And ultimately, we do it again. We are doing it again. Tuxuk Bay, Quinahawk, New Stuyahawk are the next villages in the queue. So thank you all so much for listening to this presentation.

If you are interested in any aspect aspects of this or AVEX work, please introduce yourselves and chat outside of the presentation. Thank you all.

Thanks, Bailey. That was really great. I really enjoy coming to these conferences so I can get the updates, the annual updates on the things we try and what works and what doesn't. And while my presentation gets queued up here, I'll just introduce myself. My name is Katya Karankewich, and I'm a project manager in the Rural Energy Program at ANTHC, the Alaska Native Tribal Health Consortium.

And I've been there for over 5 years. And usually my color palette for conferences is black navy, camel, sand. And I'm trying to step out here, so— Go ahead and step into it. Woo! Thanks.

I'll try to step out a little bit so you can admire what's going on here. Today I'll be talking about how you can catch more and bigger fish and also save on diesel fuel which is in rural Alaska sort of this big bleeding problem, right, that we have kind of indefinitely. A mic? Okay, great.

Cool. Thank you for that opportunity. So the case study that we'll be talking about today is Usinki and how we're using the intermittent hydro, the seasonal hydro that they have there, and we're pairing it with solar and bus to make the community money, to stop the flow as much of diesel being purchased and leaving the community, and instead we're kind of revolutionizing it, so to speak, in the rural Alaska sense. So to give you background, Eezinki is on Spruce Island. It's on an isolated microgrid.

It is literally an island. They must provide their own power. And they are about a 15-minute bush plane ride from Kodiak City and/or a 45-minute skiff ride if the weather is good and can allow them to get to the main island of Kodiak. There are about 120 residents. They have a seasonal hydroelectric dam that is owned by the utility.

That's the city in this case. The hydro also supplies their drinking water. And we're adding in a solar and BESS system this summer. We're starting construction in a month, so it's very exciting. And we should be finished and commissioning in September.

And that'll be a tribally owned system. So why not do rooftop solar? A lot of folks ask me, both rural Alaskans living in these communities and also folks on the road system here. I've got rooftop solar on my house here in Anchorage. It works great.

But there's some— there's some cons to rooftop solar in small communities, and I'll talk about those. So ANTHC, previously our program, we went into 12 different communities off the road system that are on their own isolated microgrids, and we put kind of that we slapped as much solar on to washateria, which are laundry facilities for those of us who aren't familiar, and water treatment plants. And the goal was to reduce water and sewer costs for all these community members. So what we found is the installation was more expensive than we thought. It was much more complex than we expected, and the impact was smaller than we predicted, and some of the savings for some customers were shifted as the costs onto others.

—Those fuel costs get redistributed. One other limitation of rooftop solar in rural and remote small microgrid places is that it creates balancing issues. Grid balancing issues become a big problem. And because of that, a lot of rural utilities, AVEC included, have put size restrictions on the total community behind-the-meter solar. So that means that if I get rooftop solar and Bailey gets rooftop solar in a place like Shaktoolik, then all of a sudden the utility goes, okay, that's enough, no more.

And so that becomes kind of an equity issue, right? Like why— You know, why is that fair or not fair? So what we're doing at ANTHC, we think, has a bigger impact and more equity in the way that we would like to distribute these, you know, lower cost, these renewable intermittent energies. And that is the IPP solution, the independent power production solution. It doesn't lower residential bills because of the Power Cost Equalization Act.

But it can lower commercial rates. It doesn't lower the total kilowatt hours that are used annually, which is good. It displaces more diesel, which is good, and it provides a new funding source that stays in the community, which is also good. But a lot of folks ask, why not utility-owned solar? Why wouldn't that be the solution that is the best case for rural Alaska?

And there are some pros and cons in green and red there. So if the electric utility owns the solar, it lowers the power plant fuel use, which is good. It also lowers PCE, the power cost equalization that the residents get, which is bad. It also has the ability to lower commercial bills, which is good, but residential bills stay the same. And a lot of community members care about that more than they care about some of these other things.

In a— you guys knew that the fish pictures were gonna come out, so. Here they are.

I'm under that striped marlin back there. The non-utility owned, in our case of what we're building in Uzinky as an independent power producer, that lowers power plant fuel use. It doesn't lower PCE, and it can also lower commercial bills, and residential bills stay the same in all of these scenarios because of the Power Cost Equalization Act. But what it does create that's a benefit that all of these other scenarios do not in ownership is that the power sales can create a fund to fund infrastructure projects or maintenance and repairs or provide, in our case, an offset to water and sewer bills, which generally are pretty high in rural Alaska. Not only are energy bills in that 50, 60, 70-plus cent per kilowatt range, they're water and sewer bills in communities where water always wants to be frozen.

Keeping it thawed costs a lot of money. So this is what our agency is trying to do. So back to Euzinkie and their particular example. In this case, this is about a $4 million project between all of the different grants and the cash match. We got the Euzinkie Native Corporation to put up over $1 million of their own cash that they will get back with investment tax credits, which the National Hydropower Association guy was talking about earlier, that the solar and the wind credits are being phased out.

We're still taking advantage of them because we're— our construction is starting very soon, uh, but the, the battery credits are, are still there and the hydro credits are still there, uh, so the, their, um, aliquot of cash will be returned after the project is commissioned. So this costs the community $0, and in a community of 120 people, a lot of which are retired and elderly, there isn't a whole lot of free-floating cash, right? There isn't a whole lot of tax base with which to collect funds to do infrastructure projects like this. So this is a 1-megawatt BEST system and almost 300 kW DC system, 250 kW AC. So that's pretty big.

And with their existing hydro from the small Alpine Lake, it's going to have a big impact. So here's a little graph. You can see almost kind of two opposing U shapes if you squint and use your imagination. So hydro and solar really complement each other. In times of the summer, where that orange graph is highest, that's your solar irradiance in this community.

And in the winter, it is opposing because this is an alpine lake that's filled with rainwater that they use for hydro. So in the winter, it's highest, which is really nice. So what this large 1-megawatt battery will be able to do after commissioning and et cetera is it allow the community to go up to 35 hours of diesel off, which is really big because they've been suffering a lot of blackouts in the community when they need to change the oil on their diesel generator and their backup isn't working very well. So this allows their frozen food stores to not be in jeopardy of thawing out and being spoiled. So we'll— we're switching the hydro from running in peaking to running in baseload.

That will increase the efficiency of that system. And then the diesel will be running in peaker mode or off seasonally, hopefully like the Shakhtylyk example where they got to have lots of hours of diesel off opportunity. The financials, all of this translates to up to a 65% reduction in diesel with the solar hydro battery combination. And currently that's about $184,000 in diesel savings annually with this. And that's before this, you know, Middle Eastern crisis that is going to be spiking the next barge shipment.

This— I made this presentation a couple of months ago, so it will be saving more than that. Hopefully that's just a short-term situation. But for the, the tribe who is selling power to the city, they'll be making about $75,000 to $90,000 a year in annual revenue that they can use to lower other expenses like water and sewer bills or create a fund for critical spare parts for their water and sewer system, which in this case for Usinky, we're doing both of those things. They were amenable to that. Integration is— anybody who's worked in rural Alaska in these kind of hybrid diesel systems, this integration is the most important part.

We know that these projects often fall flat on their face right at the end because we don't spend enough time and money doing these things of having a year or two after the system is commissioned to actually work out the kinks and make sure that the refinement is there, because the arbitrage between the battery and the solar and the diesels and the intermittent hydro, you know, when and where to dispatch is really critical. And in this case, it's even more critical because the hydro source is also the drinking water source for the community. So if there are times of low rainfall, we need to make sure to titrate down the hydro so that the community still has drinking water available. So, um, pre-conclusion, you know, fuel price volatility globally ends up hurting remote Alaska the most, more than us on the rail belt in Alaska and way more than us in the lower 48. We need to be independent with our own energy production in remote places as best as we can, and we need to take advantage of the federal, the state, the tax credits, all of the free dollars that are out there.

We should be taking advantage first and I'll just pitch that the battery energy storage system tax credits are still available, right? You can get 30, 40, 50, and in some cases 60% off of your total project cost through tax credits if you put up the cash, install a system, and it is eligible for, for certain things. So integrating renewables, as anybody knows, in diesel microgrids is extremely complicated. But the diesel bleed that we're experiencing kind of indefinitely, it won't stop if we won't become experts in this, right? There aren't a whole lot of experts worldwide other than, you know, islanded nations in like tropical areas that know how to do this stuff.

So, so we need to also become experts at it. In conclusion, you can catch bigger fish by using Photoshop. And you're welcome to call upon us at ANTHC to help you figure out, if you're living in a remote community, if you're living off the road system, how we can lower your bills, how we can lower your electricity costs, how we can lower your water and sewer costs. So take a photo of my cell and give me a call. I'll be around for the next couple hours here at this conference for any questions.

And thank you guys.

All right, thank you, ladies. Ladies and gentlemen, we will now adjourn to the breakout sessions. They'll begin here in about 10 minutes or so, so check out the conference app.