April 18, 2024 Juneau Commission on Sustainability Session - Dock Electrification

Direct, just once in a while.

All right, good evening, everyone. Let's go ahead and get started. So welcome to the final sustainability session. Of the spring series that the Juneau Commission on Sustainability has been putting on. My name is Nick Waldo.

I'm the chair of the Juneau Commission on Sustainability, or JCOS as it's commonly known. We've been putting on these sessions as a way to kind of spread the word about a lot of the sustainability initiatives that we've been advocating for in Juneau. Our role as an assembly-appointed commission is to make recommendations related to sustainability and identify things that Juneau as a community could be doing better on. And sustainability is largely environmentally defined, but also, I mean, economically and other ways of, you know, making sure Juneau can keep doing what Juneau does for the foreseeable future. So for this final session, we are embracing a topic that JCOSS has been active on for a large number of years, We are talking about electrification of the cruise ship docks.

We started out with the idea of talking about sustainability as it pertains to cruise ships in general. That is a huge topic, so we are going to be splitting it into two sessions. Tonight we're talking about dock electrification, and then when the sunny months are over and we start hosting these again in the fall, we'll be tackling a lot of other cruise ship related topics at our first sustainability session I believe September, we're going to be starting up again. So why is this such a big issue, uh, and what is tonight's going to be about? Um, dock electrification is something that JACOS has been talking to the assembly about for over a decade.

It's a topic that appears in the Juneau Climate Action Plan, the Juneau Renewable Energy Strategy, And what it basically boils down to is cruise ships are huge users of energy. These are 5, 6, 7, 8,000 people getting full hoteling services. And if they aren't hooked up to city power, they are getting all of the electricity for their lights, for their heating and air conditioning, for their entertainment systems. From burning diesel and then putting those diesel fumes out right in the middle of downtown Juneau. And so instead, being able to shut those giant diesel power plants off and have the ships running off our nice clean hydropower from the Juneau grid instead would be a nice gain for greenhouse gas emissions, reduce the amount of CO2 coming out of smokestacks, and also have health benefits for the people of Juneau because we're no longer generating that smoke, which is full of particulate matter and other things that could potentially be unhealthy, again, right in the middle of downtown Juneau, where a lot of people work and live.

So this is why JACOSS has been advocating for it for so long. The reason it hasn't happened yet boils down to money. Like so many things, it, you know, costs money to get the electric cables down there. We're going to hear a lot more about that tonight. Both in terms of what the engineering challenges are and what the city could do to potentially fund it.

We are eventually going to have 3 panelists to speak about this. Unfortunately, our Docks and Harbors representative is running a little bit late, but I'm assured he will be here soon. So in the meantime, we have Alex Pearce from the city and Lori Soa from AELNP. So with that, I will let you take it away. And with that, we cue Carl Jukatel walking into the room, getting ready to take his seat.

All right. Welcome.

Eventually we're going to put you up at the table, so you have to help answer questions too. Yep. Come on up now.

Of course. So, I'm Alex Pierce. I'm the tourism manager at the City and Borough of Juneau, and I'm going to talk a little bit about kind of the project broadly, strategically, and then defer to the technical side of the table over here on the more technical aspects of the project, both in terms of, you know, kind of community-wide electrification and our project specifically. So as many of you know, Juneau was the first in the world to construct cruise ship shore power back in 2001. And as Ben said, The reason we haven't built shore power since is it all comes down to money.

We approved our cruise ship docks in 2016. That was a big step in the right direction. And now we're working aggressively to construct shore power. And these are complex and expensive projects. Total project budget right now, I think, is $55 million for both docks, give or take.

And, but, you know, it's— they're also important for a number of reasons. Electrifying our dock.

Well, a docks will reduce ship emissions, supports Juneau's role as a first mover in the Pacific Northwest to Alaska Green Corridor, which is working to decarbonize shipping by 2050. That's a directive from the International Maritime Organization. And these green corridor projects are popping up all over the country and across the world to help do demonstration projects and start to facilitate those, what, what the supply chains and what the fuel technology of the future looks like. And any of these big ambitious environmental shifts are complex and really expensive projects, and they take big investments like federal government level investments, whether we're talking about the US or the EU where they have their Fit for 55 program where they're working to, to electrify a lot of ports and reduce emissions through alternative fuels on, on their own program. And, you know, ShorePower, it also has reduced rates for residents in Juneau and it helps facilitate cruise, the cruise industry deployments and schedules.

A lot of destinations want cruise ships to stay for longer. You know, if a ship is coming, you want it to kind of maximize its economic impact and kind of minimize the congestion push that happens when you have a ship in port for a short amount of time. Because of the International Maritime Organization's Carbon Intensity Index, there are all these factors that require ships to run slower in order to burn less fuel. Time plugged into shore power helps that ship run faster between ports and then allows it to stay longer, whether it's in Juneau or whether, you know, it means a longer call for Ketchikan and more revenue for Ketchikan. And, you know, we care about our regional neighbors.

That's really important. So our current project is partially funded. We have about, if assuming the assembly budget passes, we have about $10.5 million, and we are looking at an EPA Clean Ports grant to hopefully fund the, the balance of the project. We're in applying for that right now. In fact, we encouraged JCOSS to hold this sustainability session before the grant deadline so that we could talk about it as part of our public outreach in our grant grant application.

The people who are eagle-eyed may have noticed that there's $10 million for ShorePower in the Senate, State Senate budget. Assuming that everything goes well, we can expect at least some of that to, to come to Juneau. If we have some gaps between state and federal funding opportunities, you know, we have options. We can construct one dock. We can do debt financing for a portion of the project with marine passenger fees.

Those funds are highly restricted in how we can use them, and they're cruise ship passenger dollars going to support things that support the ship, which is, which is what we're required to do with that money. So We, we have a number of options. Of course, we're hoping to get some sort of state or federal investment. The state money would come through cruise ship passenger fee dollars too, through the state commercial passenger vessel excise tax. So that would not be state general fund budget going towards dock electrification.

And so regardless of the funding source, we're committed to building shore power. And it's an important initiative for the Assembly. It's important. It's an important initiative for the community. And I think that Docks and Harbors and AEL&P deserve a lot of credit for taking this holistic approach of looking at our entire port, looking at all of our needs, and coming up with a more comprehensive project than just Let's, let's get this done as quickly as possible.

And so I can turn it over to Carl and Lori to talk about their, their sides of the project. And I think Lori has a little bit more community context.

What? For me? Yeah. Yep. You're next.

Thank you. For people that don't know me, I'm Carl Yucatel. I'm the port director. I apologize for being late. I'd like to introduce Bahik Hadidian, who's with H3 Solutions.

He's an electrical engineer from Pasadena, California. And so he's been here all week and basically we've been running him around from meeting to meeting. We went to the Navy League meeting on Tuesday. We went to Docks and Harbors board meeting last night. We were, were late because we were at the yacht club for an event.

I took Vahik to the American Society of Civil Engineers luncheon on Wednesday, so just trying to get him out and about and meeting the general public as best we can. So this is ideal to be able to have this forum. We were kind of chatting on the way up. I don't know if there'd be time for Vahik to speak of what his initial thoughts are about the challenges here in Juneau, but we could do that if so inclined. Basically, where we're at from the docks and harbors perspective, dock electrification has always been a priority.

It's always been something we've wanted to do. There are challenges. There's financial challenges. There's technical challenges. There's energy challenges.

It just seems like now everything has really aligned to having— I don't want to say the backbone, but things kind of line up with the finance, the finances, the green corridor, the support of the industry to move forward at this time. So we have been working diligently. AL&P, I'll give a lot of credit to Alec and Darryl Weatherall for, I guess we're going on about 18 months of just deliberate investigations onto how do we make this happen. It is complicated to bring shore power to a dock that, it's complicated any place you go, and it's more so in a remote community with limited uplands. But where we're at right now is Docks and Harbors has exercised an MOA with ALMP for ALMP to take the lead on the design efforts.

So Although it— I think I should— I can say that the ALMP has not yet inked the contract with H3 Solutions. It'll be forthcoming at, um, in the coming weeks. Um, the heat came up to just, you know, find the lay of the land, see what's going on, meet with people. Um, and so that's all been extremely productive for from my perspective and all, as well as from AEL&P's perspective. But the process will probably be in excess of a year's worth of design efforts.

And when the design is complete, we will work on— there's lots of details to work out, of course, but, you know, whether AEL&P exercises the contract to build or we, Docks and Harbors, exercises the contract to build. All those things will have to be resolved in the coming months. And we are confident that we'll be able to provide the services. As Alex mentioned, we strategize on, you know, chasing the money and what makes our strongest case for a grant. This EPA Clean Ports Grant, it's a $3 billion grant.

It's under the IRA, the Inflation Reduction Act that was passed, I think, in 2022. It sounds like a lot of money. Everybody is chasing this money as well. And we, over the— I don't know how far back I need to go, probably since 2019, we've been applying for BUILD grants, RAISE grants, PIDP grants, trying to, you know, carve out monies for the project. We also applied for an EPA DERA grant.

The DERA grant's a Diesel Emissions Reduction Act grant. And so we chase a lot of the grants. We think we're lined up very well this year.

We have a— we kind of breaking from tradition that we're going to have a grant writer or grant writer in-house in CBJ. CBJ has a grant writer, and Ashley will be— is putting together that grant. So we're optimistic that we'll get money through the EPA grant. I suspect we will ask for the full monty, the full $55 million or whatever we, whatever number we land on. We will provide 20% local match.

We'll probably apply as if it's scalable, meaning that we could do one up to, you know, one up to two docks. So I think that's probably strategically the best angle for us. Um, if we're unsuccessful, um, there's other options for revenue bonds or, um, through head tax. So there, there are other options, but it is an expensive, uh, process to bring power down the docks. Um, when we completed the 16B project, the new cruise ship docks back in 2017, that pro— the construction project was $53 million.

So it appears that we're going to be spending as much money on dock electrification for the 2 berths than what we paid for construction. So I think— do I need to say anything else? Covered like my first 4 slides, so it's great. Oh, okay. And maybe at the end, well, he give his, um, his high school report on visiting Juneau, how I spent my summer vacation.

Okay, I'm gonna pull this This one's working, but I'm gonna need to move this slide. So, um, hello, my name is Lori Soa, and I'm the Director of Energy Services with AL&P. Um, I'm gonna give a fairly high-level overview of this project. Um, as Carl said, he works very closely with Darryl Weatherall, who's the project manager for AL&P. He's an electrical engineer and the head of our transmission and distribution department and is working closely with Vehiik as well too.

And so if you have very, very technical questions, I was going to say I could send them to Darryl, but we can send them to Veeq probably. And I've also got Alec Mestag, the CEO of ALMP, here too to help answer questions if there's anything that I need to phone a friend for. So if this presentation looks familiar, it's because it's very similar to the presentation that Alec recently gave to the Committee of the Whole. Um, but it really covers, I think, the relevant topics that, that folks are interested in. Um, so we're gonna go through that today.

Um, the— start out with the project status update, which, um, Carl really just gave us, so that's great. Um, and then I've got some slides that show what the dock interconnection equipment actually looks like. Um, so what are all the parts of the puzzle that we have to figure out in the design process? Um, and then we'll talk some about energy and power supply, because that's a big question in the community. Do we have enough energy Do we have enough supply?

Good.

Yep. Uh, but it looks like so nice to have IT support. Yeah. It's perfect.

And then we can just do, uh, presentation. Yep. There you go. Okay. All right.

Back to it. Okay. So, um, we'll talk about energy and power supply, um, and then some of the regulatory and sort of financial issues, um, in terms of rates. That we think about. So I'm gonna just blow by these slides 'cause Carl just gave a great update on where we've been, but it's been a lot of research.

It's been a pretty in-depth research project that Darryl and Alec and Carl have been undergoing for the past 18 months. As Nick pointed out, these ships take a lot of energy and we're a really small pond, right? So bringing on additional ships is something that we really have to think very carefully about because of the proportion and the sizes that we're dealing with. So there was a lot of research into sort of the state of the industry, other ports, different out-of-the-box vendors, equipment suppliers, and so on and so forth to come to the point where we are now. Is it still not working?

Apparently the wrong screen. I'm sorry. Okay. But it looks right. I know.

It looks right on our— She's so nice. One day we'll get really good with virtual and in-person events. Oh my gosh, one day we'll all learn when to unmute ourselves, mute ourselves in the meeting. How we still all struggle with that 4 years in. While you're still doing that, Kate, I forgot to say I just want to introduce a couple of my Docks and Harbors employees that are here as well.

Matt Creswell is harbormaster, Kevin Dugan is a supervisor downtown, and just the commitment of Docks and Harbors. Matt Creswell is on a professional certification route with, with an organization called the American Association of Port Authorities, and so part of that he's been It's been a 3-year, um, program, and we sent him to Miami, uh, 6 weeks ago just to study how Miami is going— how, how Miami is bringing shore power to their facility, just so that we could get smarter at the port level. Thank you. I was just filling time. Thank you.

I think we've got our online people now seeing the right screen. Oh, perfect. Excellent. Okay, so in terms of where we are, folks probably remember that we had to order a new transformer for the South Franklin substation in order to be able to bring additional ships online, and that has to do with being able to adjust the system voltage on the load side or the ship side of the system. Right now we actually have to sort of adjust the voltage for the entire community.

Again, that's a, that's a product of the fact that the size of our system is not that big compared to the size of the ships, right? So that's going to allow us to have the flexibility to bring more ships online. We've got our MOA in progress, and the kickoff meetings are happening this week, as evidenced by Fik being here.

Okay. So if we look at, you know, what makes up the dock interconnection equipment, what are the parts and pieces? So we need, first of all, to connect to the transmission line. And this is another sort of unique feature of where we are here. In other communities, because, you know, the distribution system is so large and the substations are so large, they have transformers.

And yeah, correct me if I say anything that's wrong, but the transformers are large enough to actually support the load of a cruise ship. Here, they're not, they're not even close, right? We have to get a new dedicated large transformer to serve that ship. So we have to connect directly to the transmission line, and that's what's shown in blue. And then from the transmission line, we bring power into a substation to a transformer where the voltage is adjusted down to what it needs to be to serve the ships.

So we have to find a location for a substation. Which is one of the things I think that was going on this week, was, was walking around trying to find a suitable location for a substation. And then once that substation is sited, distribution lines come from the substation to the shoreside equipment. And another aspect here is the capacitor bank. So I won't get really into the details of this, but basically because of the type of power that's required by the ships.

There are a lot of what are called inductive loads, a lot of motors, and that sort of thing. It, it creates a poor power factor, which can require actually more power than what they use. So we have to offset that with a capacitor bank system. And so that's another important aspect of a shore power connection. And then we've got the shoreside equipment with switches and ground switches, protective devices.

And then once we're sort of at the dock, we have to figure out how to get those cables to the ship, and that's the cable management system. And so the current system that we have is a static dock where the ship moves based on the tidal fluctuation. And so there's a hoist system that's used to get those cables to the ship based on whatever elevation it's at. So that's what we have at the South Franklin Dock. And those are the major design features that.

Víjek and Darryl and Carl are looking at in trying to design this next system. And so this is the location, obviously, for the two city docks. And if we zoom in a little bit, we can see the blue line up there. Again, that's the transmission line. So we have to find a place to tap into that transmission line and build a substation.

And again, I think this is something that's been worked on this week, trying to find a suitable location. This is also, you know, avalanche and landslide area. So that's a consideration as well. Um, this, uh, the shaded portions here are actually CBJ property, um, and the shaded portions here are AJT property. Um, so, so that's kind of the next big design step is figuring out where that substation is going to be.

You want to talk about AJT? AJT is a sister company to ALNP that holds the property. So it's basically a big land holding company that is a non-regulated sister company to ALNP. Yeah, for our guests online, the answer we got from the ALNP representative in the audience was that AJT is a sister company to ALNP that holds some property, and so it's functionally land that is available to AEL&P.

Okay, so another, um, difference with these, uh, the new dock connections, um, is the fact that these are floating docks. So like we talked about before where we have, you know, a static dock and then a hoist system to get the, the cables where they need to go, now we have cables that are going to be moving with the tides. And, and that's a significant design consideration to make sure that we have a robust system and that it's gonna be able to manage that sort of movement as part of it. So there are some out-of-the-box solutions for shore power connections, and this is one of the reasons that those aren't really an option for us here. We're gonna have to find something that fits with our particular situation.

The next thing I'm going to talk about is, is on the energy and power supply. Maybe I'll ask at this point, Vahik, do you have anything to add about the infrastructure side that you want to talk about before I move on?

Step up this one. That's easier. Oh, yeah, there we go. First of all, thank you very much for the confidence that the board and ALP, and Port has put on H3. Just for the audience, I am a previous Port of Los Angeles chief electrical engineer, harbor engineer, which we have done about 7 container terminals and 2 cruise terminals, 3 actually, in LA with under my supervision, or I was the engineer of record.

So, these challenges are nothing new. Every port, every community have their own particular challenges, and Juneau is not an exception, although I don't want to minimize the uniqueness of the challenge. But with today's technology, these challenges can be overcome. I always believe the 3 Ts—time, talent, and treasure—can solve everything. So if you have the time, talent, and treasure, we can do this as well.

As far as the technical difficulties or challenges or the cables moving up and down, yes, the dynamics of up and down is very unique to Juno. You have about 20 feet up and down, but that's not the only movement. The yesteryear's design was fixed location, fixed jibs, or fixed holes in the ground or vaults, but Today's technology now gives us flexibility not only up and down, but also laterally. And so there are solutions, manufacturers that have caught up with that challenge and they provide us solutions. By the way, the names that were listed on your— one of your slides, most of them are either manufacturers or contractors, and they have vested interest to either sell you products or sell you services.

H3 is not a contractor and will not connected to any manufacturer. So we are— I am an independent consultant who have had 30-some years of doing this, and my objective is to provide the lessons learned in other places that we have done to another application available. And it's been a privilege and honor to be here. Thank you very much. If you have any questions, we'll take it up later on.

Thank you.

Will this go back now to— is it this one? Is that right? Okay.

I know I'm screen sharing. Okay. All right. So now I want to get into a little bit of background on our electrical system here to give sort of context for when we talk about do we have enough energy to supply the ships. And some of this is well known to some of the folks in the audience, I know.

But basically, you know, at ALMP, we operate 5 different hydro facilities, and we're very proud of the fact that we're able to provide 100% base load from hydroelectricity 99% of the time is how Scott Willis used to put it. And I think that's a really great way to think about it. Under normal circumstances, we're able to supply, you know, Juneau with hydropower all the time. And it's— it comes from these 5 plants, hydro plants. And then we also maintain diesel backup, emergency diesel for situations when hydro is not available.

So that's what provides the reliability in our system.

Um, and then, you know, thinking about gener— just the overall system. So we have our generation facilities, that's where we produce the power. Then we have a transmission system where we push the power, bulk power, to different parts of town. Um, and then from there, uh, substations and transformers will step down the voltage to be able to send, um, to distribute that power through town. So we've got generation, transmission, and then distribution.

And being a vertically integrated utility, we do all of those functions here at AL&P, whereas in a lot of other places, you know, there's different companies doing different aspects of that. And so when we talk about energy and power, we need to think about those terms in two different, you know, as two different separate things because they are. So energy is the ability to do work, right, if you remember from physics class. And so our energy supply is really water in a hydro system. And we're really fortunate that we have not just run-of-the-river systems that are dependent on flowing water, we have all of these reservoirs.

You know, 4 of our 5 plants have reservoirs, and so that's storage, and those are our batteries, right? So we're able to store the electricity and then use it when we need it. Power is more of an instantaneous, you know, term. So power is the amount of energy that can be delivered at any one time. So if you remember back to the last slide when we have 5 different hydro plants, if they're all operating at full capacity, and that's what our generation engineer likes to call full boogie, when everything's going full boogie, that's the total amount of electricity that we can supply at one point in time, right?

So that's power.

And in these next slides, we're going to talk about our energy supply and our power supply and how that impacts when and how often we can serve cruise ships. So first we'll talk about energy and then we'll talk about power. So like we talked about in a hydro facility with lake storage, that's really our energy supply for the year. And so that is a major function of our generation department is managing the lake levels, right? Managing the lake levels, predicting, you know, how much use is going to happen and ensuring that we manage those lakes in a way to provide everybody with power.

And so this is a curve that we look at weekly as a management group for all of the different lakes in our system. And so that red line at the top, which definitely was dashed when I put this together, it's not dashed now, I don't know why, but that's the spill elevation. So that's the elevation at which we're spilling water out of our reservoirs. The black line, the dark black line is the current, lake elevation. So this is where we are in Long Lake, which is the largest lake that serves Sneddisham, our largest, um, power plant.

And then the rule curve, which again, that was dashed when I made this, um, is the gray line, and that's the curve that we want to stay above, right? So if we can keep our lake levels above that rule curve, we can feel really.

Confident that we're going to be able to supply all of the power. And now certain— or energy, I should say. So, um, something to, to notice there is this is set up on a scale that's the water year. So it begins in October, um, and the lake levels are the highest in October, right? Because it just rained a whole lot.

And so ideally, our lake levels are full November 1st. You know, October 1st would be great too, but, but that's what we aim for. Um, and then from there, We expect over the winter that we are going to draw down those lake levels. That's when our highest demand is for electricity, is in the winter. A lot of places it's summer because of air conditioning.

We don't have that problem here. And so the other thing that's going on is while we're using a lot of electricity for, for space heating and lights, we're not getting inflows into our lake because at that point everything's frozen, right? So it's storing in the hillside, which is good. But we're not getting inflow into our lake, so we're not getting that replenished unless we have a really wet point in the year. This is, you know, evident there for earlier in this year.

But that's generally the pattern, right? So our highest use occurs at a time when we're not getting inflow into our lake. So that's kind of our dilemma, right? And that's what we spend a lot of time trying to manage and predict Our generation engineer has 100 years of precipitation data that he uses to model when trying to make decisions about if we need to make changes to our system. So that's a lot of what we do to try to understand where we are in the year.

And this year we had a ton of precipitation and a pretty warm winter, so our lakes are looking really good right now.

Okay. So, so that's our energy supply, right? And then this picture is the penstock at Salmon Creek, and the penstock is a big pipe that brings water from the lake, from the reservoir, into the powerhouse. And you'll see the date on there is from 1913, right? So we've got a lot of really, um, great old infrastructure that still works really well, um, but it's time to replace this penstock.

Um, and so that's a project that we have ongoing. Um, and one of the potential benefits of that project is that, uh, when we replace that penstock, uh, we are going to reduce what are called head losses. Um, so if you think about water flowing through pipes that has, you know, turns and twists and a really rough inside, it loses energy. It kind of slows down as it goes through that pipe. By doing this work and replacing this penstock, we're going to reduce those losses.

And so what happens is we can get more energy out of the water we have in that reservoir. So it's, it's not negligible, right? The amount that we're going to gain as part of this project. So the reason that I say that is that You know, the, the amount of time that we are going to be able to serve cruise ships can potentially increase with projects like this that are going to increase our supply of energy.

The other thing that's important to note is that right now, on an average year, we sell all of the energy that we produce to firm customers and also to interruptible customers as well. As we get more precipitation and higher than average precipitation, that means that's additional energy that we have for additional customers, additional interruptible customers as well. And the trend that we've definitely seen is that things are getting warmer and wetter. It's definitely not going to be linear, right? We still have our cold snaps, but that means more energy in our system.

And this— now we're moving on to power supply, and this is a graph that shows a fairly typical fluctuation in load in late May. All right, so if you think about what's happening in the community in May, we're coming out of winter, it's still kind of cold, we still have some heating load, but we're getting into the time of the year when our loads are generally lower. But you can see how they're moving up and down, right? So our loads are higher during the day and lower at night. So when we think about adding ships to our system, probably the most challenging timeframes for that are going to be early spring—.

Not early fall, I guess early spring is probably the point in time where that may be the most challenging. If we have a cold spring, And so our heating requirements are still high enough that our loads are still high. Trying to bring on additional cruise ships can be challenging. And that's just, again, going back to the idea that these ships use a lot of electricity. At some points in time, that ship that's in town is using 15 to 30% of the entire amount of energy that we're using as a community.

And that's a huge proportion. So you think about adding additional ships, that could be a challenging timeframe to bring on, you know, say 4 additional ships. But it's kind of a maybe, right? I mean, there's a lot of situations that we would have to take into account that make those kinds of decisions. And that's something that I think is really frustrating and can be hard to communicate and talk about is, you know, when we get the question, well, is there enough energy or power for ships?

It's really frustrating for you to hear and for us to say that it's sometimes, right? And then if we want to go further down that trail, like in talking about, well, what does sometimes mean? There are all the factors that we just talked about that will influence that, right? So if we have enough power or energy to supply the ships, it's really based on what's going on in the community, what our firm customers are demanding and how that load changes over time. It has to do with the amount of precipitation that we've gotten this year, or, you know, whatever time we're talking about.

And it has to do with the temperatures that we're seeing as well. So there's a lot of factors that play into that. And maintenance. Okay, good, good point. So the other thing to think about is that summertime is when we do our maintenance.

It's great that we have 5 different power plants because that allows us to take one offline and then, you know, be able to do maintenance on that one while we have the other plants serving the community. And generally we do the maintenance in the summer, and so that's when the ships are here. So that's another thing to think about in terms of, you know, how often and how consistently we'll be able to supply ships. You know, we already work with Greens Creek to try to work around their schedule when we do maintenance. We interact with the cruise ships already to try to work around their schedule to do maintenance as well.

But even with the best effort, it's not always possible to do that. So that's another consideration when we're looking at, you know, having enough power and energy for ships.

And then this is the last slide that I have. This is really a depiction of are interruptible customers, and I used 2023 to provide that data. So, so if we go back and we, we talk about what is an interruptible customer and what is a firm customer. So firm customers, we are required to have enough power and energy to serve them, whether it's hydro or diesel, right? So we had— we keep enough diesel generation to be able to support all of our firm loads in the case that our hydro is unavailable.

And it's happened in the past, and we have a lot of work that goes on to try to minimize any of that that would happen. I won't get into the avalanches too much right now because I know we're getting late on time, but it has happened, right? So we have to have those diesel plants for that. Interruptible customers, on the other hand, we We supply them with hydropower when we have it available, and it's a really great way for us to maximize our use of our reservoirs, right? So we are not obligating and overbuilding to supply these additional loads that can support themselves if need be, that are oftentimes not permanent loads, right?

But we can supply them with energy when it's available from hydro. So that's really the difference between a firm customer and an interruptible customer. So the 3 different categories of interruptible customers that we have here are our dual fuel customers. So we have some facilities like UAS and the federal building that maintain both oil boilers and electric boilers, and they get a special rate so that we have the ability, if we have a low water year or have something going on where we don't have hydro available,.

Then we can shut them off and say, you know, you're going to use your oil boiler until we can support you again. So those are dual fuel customers. The cruise ships are in orange. And so this is 2023 data, and this is actually the most we've ever sold to cruise ships. So that's the highest that we've ever sold, and obviously their sales come in the summertime.

And then Kennecott Greens Creek Mine is in blue, and they are a more consistent load. Obviously, they're year-round and significantly larger than the other interruptible customers that we have.

Yeah. Okay. So that's, that's all I have, and I'll turn it back over. All right. Thank you so much.

So that was a lot of great information. We're starting to get some questions posted online. I'm going to start with a couple of those. If you're here in the room, Marian has a microphone on the side here, and we're going to ask that you come over and ask your questions at that so that people online can also hear what your questions are instead of having me try to repeat back what you said at really high frequency.

All right, so our first question, our first question coming from online. So there are two related questions here about financing this. So first, when was the last time Docks and Harbors raised moorage fees on cruise ships at the two city docks?

January 1st, 2024, 9%. All right. So that's, I mean, this year 9% sounds pretty substantial. It is substantial. I will add we do charge significantly less than the private facilities, and we're fixing that.

So what, CBJ will raise our rates at the cruise ship docks pretty significantly in the near future. And this is just my question that I'm interested in. I know that the taxes which are collected on cruise ship passengers, the marine passenger fees, those have to be spent on cruise ship related expenses. Are there similar restrictions on the moorage fees that we charge the city docks?

Um, no. So basically when a cruise ship ties up, they're paying to Docks and Harbors what's called a moorage fee, which is $3 plus 9%, um, $3 plus 9%, so $3.27 per linear foot, and then, um, a nickel and a half per gross registered ton plus 9% starting this year. And those are the two fees that they pay docks and harbors. So the— just for the record, so everybody's talking the same language, The city and borough of Juneau receives three what most people call head taxes. The first is a marine passenger fee, and that's $5 per passenger that comes ashore or that arrives in Juneau.

That's $5 per person, and the intent of that is to mitigate the impacts of tourism to Juneauites. So that's $5. Uh, Miss Pearson, the city manager, through the assembly have a process to apportion that money to various entities that are impacted, that to ameliorate those impacts. There's also a $3 port development fee. So the port development fee is a fee that's intended to pay for revenue bonds and other improvements, infrastructure improvements.

So that's another local head tax. And then the city also receives through the state head tax, and the state head tax is called, uh, Cruise Passenger Vessel Excise Tax, and that's a $34.50 per person state head tax that is collected, but the state reimburses every port that that ship, um, moors at $5. So we get, um, currently the city and borough of Juneau will get $13 per person that arrives in, um, to Juneau.

And so functionally, um, we, we, we roll out our passenger fee budget, that restricted money budget, kind of internally we take into account which fund goes to what, making sure that port development fees are paying the debt service on our docks, etc. If we have debt service for future seawalk construction, if we have debt service for shore power, that's that funding source. But because we had, we were part of a lawsuit, we have a settlement agreement. That settlement agreement actually goes further than the tonnage clause. Of the U.S. Constitution that we're— that these fees are regulated by.

And so we kind of treat the entire budget as subject to that settlement agreement. But anyway, long answer in saying that if we're going to raise a fee, the dockage fees are the ones that we want to raise because it's less restricted and allows the Docks and Harbors Enterprise Fund to build and maintain the infrastructure in the way that they need to. So that actually segues very well into another online question, which was posted in relation to our grant application. Yeah. The question being, in addition to going to the federal government, i.e., our tax dollars, why not have the foreign-flagged cruise ships ponying up money?

Well, I think shore power throughout the country and throughout the world is, it's a major transformative thing that we're working on in both cruise ship ports that they're working on in industrial cargo ports. Decarbonizing global shipping is not a, it's not a case-by-case, port-by-port thing. It's a major generational infrastructure investment. And federal governments all over the world are making this infrastructure money available to transform our transportation networks. And so, you know, Juneau needs to be part of that and needs to take advantage of that.

You know, we could save money through passenger fees, through port development fees, and bond and chip away at this year over year. But we have lots of projects that we want to do. And there's money, there's federal money out there today to support these transformative clean energy projects. And it's a major priority of this administration. There are lots of grants out there that support decarbonization.

And this is just one instance of a port potentially taking advantage of that federal funding in order to help facilitate this big transformative investment. And just to kind of build on that a little bit, you know, being involved in the Green Corridor Project, we're not— it's not just shore power and ships. We're In looking at alternative fuels and trying to determine the fuel of the future, we need to think about supply chains. We need to start thinking about scalability and how to build the networks that, so that there's enough, whatever the alternative fuel is available to power, whether it's cruise ships, whether it's cargo ships, whether it's other types of port infrastructure. And that's really difficult to catalyze with like just a couple customers that are cruise ships.

That needs to be major investment and that needs federal support. Otherwise it, it's just, it's not gonna happen with industry alone, even if the cruise companies and the cargo providers all get together and try to figure out how to make it work.

All right, thank you. Now we're going to come to a question in the room. Yeah, Alex, you said that with the Green Corridor that it would allow ships that are currently running slower to burn less fuel to meet some of the decarbonization goals to run faster and then spend more time plugged in in Juneau. Did I understand that correctly? So basically, we would be looking at a net zero carbon reduction.

That they would be recouping, they'd be burning more fuel while they're at sea powering faster, and in the end we'd have the same amount of carbon into the atmosphere? Not necessarily, no. So, and this isn't a Green Corridor thing, this is the IMO's commercial, or carbon intensity index, which is a long and complicated formula that all maritime Vessels need to apply. But essentially, if a ship is in port plugged into shore power, it is, it's incentivized.

To be there longer. So if we are in Juneau, if a ship is plugged in in Juneau, then it has the ability to, it, it's incentivized to, to stay in Juneau longer. And our local economy wants that, right? And so as we build shore power in other places, we have shore power happening in Whittier, Victoria's making a big push for shore power. Then that allows, you know, ports like Ketchikan that maybe are a couple years behind to also potentially receive longer calls.

So no, I'm not saying this is a net zero reduction. I'm saying that as ports build shore power, it allows the ships to stay longer. Yes, they are going to run faster, but it's not a net zero reduction.

We have our next question in person here.

Hi all. Y'all know me, but I'll mention for the record, I'm Duff Mitchell. I'm a member of the Juneau Commission on Sustainability, been involved with dock electrification before the public dock 16B was built. So I've been involved with a lot of the meetings even before and in the discussions there. Remember the brochure that was sold to the public that, hey, there's going to be dock electrification when we build it.

We're still waiting, but that's just history. And I know the price went from $17 million or $13 million to like $55 million. So sometimes if you measure once or measure twice at the beginning, you can get it done cheaper than trying to do it after the fact. That being said, one of the issues raised is energy and power. We are a winter load community based on AL&P's 2022 annual report.

Our winter load is 88 megawatts. Our summer load is 58 at the low side, goes in the 60s, which is about 30 megawatts of capacity. Or like you were explaining, the pipeline that can go to the ships— each ship is 6, 7, 8. So that's 3, 4 ships just right there in capacity. Greens Creek is the largest AL&P customer, interruptible, truly, but they burn about or they use about 60,000 megawatt hours in 2023.

And if a ship— last year the, the cruise ships took about a little under 7, so 7,000 megawatt hours for the entire Princess cruise ship dock for the entire season. And if you divide that math, you come up with 7 or 8 cruise ships out of Green's Creek's load. Now Green's Creek doesn't like that, but they are interruptible. And they could shape 1 or 2 ships' worth of power into a firm load situation for our public docks so that we could file grants and not say, oh, by the way, we can only do it sometimes, or maybe partially, whatever. We could just say it's locked and loaded.

We could do it all the time. That would have to take some negotiation, and I know that takes part of ALP's business model with, with Greens Creek and resolving it. But what I'm saying is currently there is power. Available because an interruptible customer can be curtailed for any reason, anytime, any— you know, you can cut them off. Now, there's also another thing besides just firm where you have to back up that diesel power.

Nobody's asking you to back up firm or build oil generation to back up a dock because the ship, in the worst-case scenario of an avalanche, or if conditions don't meet like the power lines, then of course they could flip onto, uh, uh, their own— they could, they could run their own power. So it's a firm, it's called a conditional firm. So there might be an opportunity to put the public docks on what we would call conditional firm. You got firm power such that the conditions allow conditional firm, but you could take power from Green's Creek, small amounts as needed, because most of the time you'll be able to take care of them anyways. I just want to throw that out there because I've seen it, what other electric utilities do, and I've seen what other ports are doing, and I just want to move us forward as a community, uh, on this power capacity.

Uh, I think it's really going to help the grants that we're going after if we can say we can do the docks most of the time or all the time rather than part-time. And the last, uh, grant we filed said 25% of the time, and we didn't get it. That was the RAISE grant. And at that time we had over 40 letters of support from everything from the hospital, all the cruise ships, to our state delegation. So I just wanna go with what you mentioned was lessons learned from others.

I wanna take lessons learned from what we did in the past and maybe work how we can work together all to do forward. And I do wanna say I am, for disclosure, I'm with Juneau Hydropower. So hey, if you need power, we, we're, we're here, we're here to help. Thanks.

All right, I'll, uh, can I just add one thing? Um, Carla, to your question, I will put you in touch with somebody who can explain the CII a lot better than I can. I'm off tomorrow, but I'll send you an email next week. And I do just want to say on the record, like, my door is always open. I'm happy to discuss this stuff.

Give me a call anytime. But, um, but I will, I'll I'll find the right person to answer your questions more coherently than I can, because I, I understand it just well enough to not be able to explain it very well. So, all right, um, I was just going to remind everyone, I mean, we heard from Duff. There's a lot of history here. There's a lot of passionate people in the Juneau community.

We do have a survey out. We just had the link dropped in the online chat. There's also a QR code on the poster by the door, so if you want to scan that, you can share your opinions too, either anonymously or with your contact information if you're looking for some follow-up. I mean, that's what we're here for tonight, is to answer your questions but also to get feedback from the community and hear what Juneau thinks about this. We are a little over our scheduled time, but I did want to get to just the one last online question that I see waiting here.

So, do cruise companies pay for the power, and do they pay full price, or do they push back and try to get us to cater to their needs, offer it to them cheap after committing to this course of action?

So the— here we go. The—.

I'm Alec Mesdek. I'm the CEO of AEL&P. So the cruise ships, it is because they are interruptible. You know, one of the things that happens when we price electricity is we price multiple aspects of the services that we provide. So we have, you know, energy costs and we have a cost for delivering power.

And because the way that those costs are incurred are measured differently. And you don't really see that on your residential energy bill because, you know, just for efficiency's sake and the way that utility regulation has evolved, we combine energy and capacity costs into one charge for residential customers. It really mostly what I think a big part of what it does is it saves us a lot of time on the phone and explaining how demand charges work. But when a cruise ship is purchasing energy from AEL&P, because we are not providing them with any guarantee of the delivery of power as an interruptible customer, what we charge them for is only the energy costs that they are receiving. But we are charging them actually the highest energy cost that anyone pays in our system.

We don't allow them to pay the average energy cost in the system. They pay the busbar cost of Lake Dorothy. So the output cost of Lake Dorothy is how their contract is structured. And that's actually the same thing that Green's Creek pays for energy. And there are, you know, there are other little components to the bills, but when they pay for energy, they're essentially paying the output cost of Lake Dorothy, which is right now about 11.2 cents per kilowatt-hour, where— and that sounds maybe like a little bit lower than what you pay at home, but your combined average energy cost as a residential customer is about 12.6 cents per kilowatt-hour on an annual basis.

But the energy component of that charge is only about 6 cents per kilowatt hour, 6, 6.5 cents per kilowatt hour. So they're actually kind of the highest payers of, you know, highest energy charge in the system. And no, they don't try to beat us down on the price or anything like that. That was a negotiated contract, and we had to demonstrate to the commission when that contract was approved that it was just, reasonable, and in the public interest.

All right, thank you. With that, we're a little over time and we have gotten through our line of people with questions here, so I will let everyone go back out, enjoy the sunny evening that we have here. As I said, we're taking a break from these sustainability sessions for the summer in advance of all the nice weather coming our way, but keep your eyes out in September. We're going to get together again to talk about all of the other sustainability aspects of the cruise ship. You know, today we are very focused on this one project, but there are other issues with what they're.

Into our air, our water, our landfill. And I know everyone in Juneau is very passionate about that, this topic. So with that, let's just take a moment to thank our panelists for being here today. If I could add something, I want to do a— set up environmental ship tours for people this summer for anybody who's interested in going on board and learning about the systems on board cruise ships. It's interesting and it helps provide some context to kind of our understanding of this stuff.

So if anybody in this audience is interested, you know, you're all engaged citizens. So yeah, I definitely want to get Jay Koss on there. That's, yeah, that goes without saying, but please send me an email and I'll start to to set up groups. So, you know, want to balance it across cruise lines and different groups that are subject to the Open Meetings Act. So we're not getting the whole Assembly or all of JCOSS on there at once.

So if I can have a number of small groups, that would actually make it easier.

That it? All right, good job, good job. Thanks.

As, as you're closing up there, we have one.