Alaska Energy Conference 2026-05-19 - part 2

Time to get a mine permitted is 15 years, 18 years. That's crazy. No business can plan on an 18-year cycle, yet alone 18 months. That's just not how business works, the world works. Things change too quickly.

So our approach, and Dr. Verdin said it perfectly, is to use innovation to allow us not to compete doing the things we used to do. We're not going to play by the rules that we established in the '50s around how you mine, how you are a steward of the environment, how you process, refine, make metals, and then make things. It's going to be a whole new, a whole new type of mining and processing. So the thorny issues are trying to get regulatory bodies to execute at the same high standards of protecting communities and the environment, doing their job to ensure that these mining projects or refining projects are creating value to the community and not harming the community. But with technology, we're doing that better than ever.

To get those regulatory bodies and that permitting sped up so that industry can happen. A place like Alaska has 95% of the critical minerals designated by the Department of the Interior. You have the largest graphite deposit, definitely in North America, maybe top 2 or 3 in the world. You are leaders in zinc, in copper, in tungsten, in antimony. Alaska could lead— not just lead the country, but lead the world in the production of things like these materials.

Which are necessary for AI, which are necessary for every part of our modern world. But we have to be able to permit, we have to be able to process. To do that, you need energy. So it's the intersection of all of those difficult issues around reconciling with the last 30 years of not doing this and, and addressing the serious need today to, to innovate with what we're doing at the National Labs and to execute with our government partners and state governments and communities. Those are all the thorny issues, and we haven't even talked about workforce.

That's a separate, that's a separate thorny issue. But Governor, those are, those are top-of-mind issues, issues for me. And one of the reasons we're so excited to have this presence in Alaska and a partnership with the University of Alaska in Fairbanks is that we want to bring everything the government has to offer, everything our other national labs have to offer to benefit Alaskans, to benefit Alaska, which benefits the United States, which benefits the world. Very good. Director, Director Verdin, your thoughts?

Yeah, I think, you know, a couple weeks ago in Golden, we had a partner forum with about 170 different participants on critical minerals, and the Secretary was there, and the general feedback was We need—. We need—. There's the policy issues, there's the speed to market issues, there's the— what is the energy mix that's going to provide, regardless of whether it's coal or natural gas or solar or wind or hydro? How do you have affordable energy but then build up the workforce and innovate and create a market so it's sustainable and enduring? And I lived in eastern Washington State for a lot of my career.

I walked through the aluminum smelters that used to be on the Columbia River and the magnesium smelters. And there's a few low snowpack years and it was more profitable to sell electricity than to keep those plants running. We could sure use those kind of things. So I think the thorniest issue is how you put all these pieces together. I hate to say strategy or roadmap, but especially Alaska's different.

Alaska's different and we need to have a strategy that allows us from a technology point of view or a system point of view, say, how do we get from here to there? So when large investments come in, technology is filling the gaps to make it more— the performance better, the grid more stable, energy more affordable, and kind of put that plan. The national labs— and there's other national labs in the room, a lot of great colleagues here— what we're good at is objectively looking at all options and giving objective, independent views on technologies. And how to optimize a system. Right now, you know, especially in the lower 48, we do one-offs, and I think Alaska has a system challenge, and you described it.

It's the rail belt, it's logistics, and it's remote villages, and it's the amount of energy that has to be used in the middle of winter. Yeah, and I agree, and I'll add one more that I think is a thorny issue, and I'm not going to ask people to raise their hand, but I'm sure that half, if not three-quarters at least, of the audience would raise their hand. Going forward, you know, the critical minerals issue is an issue across the board, but also as it relates to national security. If we have to rely on the— rely on the Chinese— whenever you have to rely on another country, especially a country that isn't necessarily considered to be a long-term ally, share the same values, etc., you run a risk. Again, it's a— there's going to be a risk premium interjected in all this.

And so by bringing the— this process back to America, both the mining but also the processing, is going to be key. But in order to do that, and this is the part that I think the audience would agree, especially investors, we've got to make sure that we get some congressional acts on lawfare and permitting. Long-term certainty, as you mentioned, in some cases I've heard it's 20-some years for mining. You can't, you can't ask your board or you can't invest in an environment like that if 2 years later, a new administration comes in, and it's— the rug's jerked out from underneath you. And so from that perspective, the permitting process I think is in the hands of Congress.

But whatever we can do there I think is going to really, really interject certainty in the investment world, and not just in Alaska, but across the United States. But also lawfare. Making sure that when there are lawsuits, that they are genuinely serving a purpose for the greater good in terms of protecting human life and health, not being used to grind down the time and grind down the process so that investor says, what's the point? I'll go overseas where we don't have to deal with this. So I— from my perspective, along with the mix that both of you have just mentioned, those two I know for states and investors are going to be absolutely crucial going forward.

Yeah, I would agree with you, Governor. The The amount of capital required for industries you and your state know well, like oil and gas, tremendous capital upfront. It can be very small margins depending on where, where, what you're selling. The same is true in critical minerals and mining. You have huge capital requirements with long durations.

Granted, they also have long lives to these assets, but without the certainty that the regulatory framework's gonna change, The United States government, hopefully we will have policies in place that are durable and enduring to allow a framework for those businesses. Obviously oil and gas is clear, but for the emerging mining and processing industries, the new businesses that are going to start in Alaska, you know, our office has— we've issued over $1 billion in funding opportunities and have spent time talking and working with many companies here in Alaska that have projects that will allow us to be free from foreign adversarial nations that control the supply chains necessary to our economic security and our national security. Antimony is a key requirement for defense systems. We need to make that here in the US and we need to mine it here in Alaska. Yeah.

Great. So, um, I think we have one last question here, but let me ask How are you thinking through the AI applications and opportunities to utilize AI to safeguard and advance Americans' access to affordable, reliable, and secure energy, and as it relates to critical minerals? Any thoughts on that? Do you want to go? I mean, I'm happy to talk about AI.

It is going to transform every part of our lives. It is the next— as our Secretary likes to say, it's the next Manhattan Project. If you have kids, you know that it is changing the way they learn. It's changing the way they operate. It will change their job opportunities.

When we think about the power to iterate and innovate in an AI environment, it is going to allow us to move forward with a speed and precision that hasn't been possible before. Uh, if we wanna just talk about critical minerals alone, uh, we've, uh, both with the National Lab of the Rockies and laboratories across the United States as part of our national lab complex. And with the Department of Energy's Genesis Mission, which is our singular AI effort leading the United States government in, in these arenas, we talk about the ability to build a digital twin of a processing facility, for example. So if there's a company in Alaska that wants to build a processing facility for graphite, In a digital environment, using AI, we can help maximize not only how you build and structure that facility, but how you maximize its energy efficiency, how you maximize its ingress and egress, what's the right place to site it, how do you take in environmental considerations, how, you know, all of the various things where smart people would sit around a table, lots of engineers would work on projects, it would, what would take, months or years we can do in minutes now. And that will absolutely revolutionize both the efficiency of how you mine.

Mining subsurface innovation is huge. You know, there's a lot of— there's a lot of subsurface technology in oil and gas. That subsurface innovation is just starting in the mining space. How are we going to have smart mines where where AI allows us to target specific ore bodies, where we're able to identify ways to mine more efficiently, more effectively, more environmentally friendly, how we deal with tailings, how we reprocess. Those are all, those are all tangible activities dealing with real-world tangible assets.

But in a digital environment, we can maximize how we execute those. So AI will be absolutely transformative. It is something we're looking at. And investing in at every stage of our value chain, from how we deal with solar interconnects, how we deal with batteries and data centers, how we deal with hydro projects, how we can assess the, the benefit of installing a new turbine at the, at the Copper River Dam. There's all kinds of ways that we can use AI to make decisions more quickly and execute more effectively.

Director Verne, you get the last word here. I would just, I would just say it's going to, as the Assistant Secretary said, it is just going to transform everything we do. And maybe there's two parts of it. There's the application of AI, which probably everyone in this room is trying to figure out, how do I use it most effectively? But there's the other war we have to win is we have to have the data centers in this country and, you know, with affordable energy.

And one of the things we're doing at the National Lab of the Rockies is we are working with hyperscalers who are sending their vendors to, you know, our facilities at Flatirons to do big megawatt-scale testing because these data centers are very complicated. You can have natural gas, you can have batteries, you need to be interconnected to the grid, you need to be able to manage loads within the data center, you need to be able to manage loads on the grid. And as we start to collect that data, there's no better way than AI to help optimize that. And so win the physical infrastructure of where data centers go and make sure they exist in this country and they can run affordably. And then there's the application space, which I agree with the Assistant Secretary, it's kind of the imagination is the limit right now on that.

And I think in the R&D world, what we're doing is trying to build off those platforms that are going to be built by the Genesis mission. But for critical minerals, I also see another really important area that we could work on together, especially with the universities and all the national labs, which is the next generation of the workforce needs to be AI literate. And so even if you went out, I'm imagining now, even if you went out to a remote mine, it would have, it would hopefully have the latest computational AI tools to optimize how that mine is run, whether you're using robotics or drones or, you know, self-driving vehicles, and you're worried about safety and productivity. We can put all that together and train the next generation of workforce that is going to be better than I am at it, you know, but it'll be kind of the entry-level skills that everybody needs. Well, folks, thanks for what you're doing.

Thanks for being here in Alaska and being part of this. And again, thanks for what you're doing for the country and this administration. So let's give them a round of applause. Thank you, guys.

Thank you, Governor. Thank you very much. Really appreciate it. Look forward to talking with you a little more. Thank you, Lieutenant Governor.

There we go. As we continue today's discussion on the future of energy infrastructure and innovation, our next panel is turning to one of the fastest-moving forces shaping global demand and investment. And this panel we just heard has touched on it— artificial intelligence, or AI as we all know it. The rapid expansion of AI and data centers is transforming how we think about power generation, transmission, reliability, and long-term energy strategy. Here in Alaska, conversations have already been underway about what it could mean to attract the growing industries to the Last Frontier and what opportunities and challenges will come with that growth.

And as has been stated previously, we want to have a workforce that is ready to grasp those opportunities. The panel you're about to hear is going to explore how AI is driving unprecedented increases in electricity demand. It's also placing new pressure on an already constrained transmission system, and it's creating powerful new tools for forecasting grid optimization and accelerating transmission planning and development. So joining us for this discussion today are leaders from across across the country, utility policy, reliability, and innovation sectors. So I'll introduce them by name and tell you a little bit about each one, if they would like to come up.

Crystal Angvist serves as Executive Director of the Alaska Power Association and brings more than 25 years of experience in Alaska's electric utility industry and statewide energy leadership. Venkat Bennunnarayanan is Vice President of Integrated Grid at the National Rural Electric Cooperation Association, where he focuses on integrating emerging technology which will support a reliable, affordable, and resilient grid. Jim Robb is the CEO of the North American Electric Reliability Corporation and brings more than 4 decades of experience across the North American energy sector. Joining them is Kyrsten Sinema, former U.S. Senator from Arizona and a leader behind major bipartisan legislation, including the Bipartisan Infrastructure Law and the CHIPS and Science Act.

Kyrsten has deep experience in infrastructure, water, and technology policy. And finally, David Terry, who's president of the National Association of state energy officials. And David leads national policy and coordination efforts on behalf of the state and territorial energy offices across the country. So please join me in welcoming our panel, which will talk about AI, its impacts, and its opportunities.

Good morning, and thank you so much for that introduction, Lieutenant Governor Dahlstrom. Really appreciate that. That Now we're right on schedule, and I don't know about you, but it's hard for me not to get energized when I'm at this conference. It feels like old home week. It's nice to see so many familiar faces in the audience, as well as people from around the nation and around the world.

And it's really hard not to share the passion that our Governor has for Alaska's energy leadership. And, you know, if it would be all right, this is his last ACEC conference, and I've been in the industry 25 years, and he's really spearheaded so many fantastic initiatives and focused on energy. And I would, if you wouldn't mind, could we please give the governor a round of applause for ACEC? Thank you.

Well, I'm excited about this panel, and no, it's not because I'm moderating it that I'm excited. But it is a star-studded panel, as you can see. So I'm going to start with my good friend Venkat from NRECA. So Venkat, can you briefly describe the role of the National Rural Electric Cooperative Association and also tell us about the members that you represent? And to get the mic to work, you just push up.

All right. Good morning, everyone, and thank you, Crystal, for inviting me. To the panel session. I've been to Alaska quite a few times, and every time I come here, I learn something new, and I don't think it's going to ever stop. So thanks again for inviting.

Yes, we— NRECA is the National Rural Electric Cooperatives Association. You know, we are the trade advocacy and research association for the 900-plus member cooperatives all across the U.S., including Alaska. You know, we had the pleasure of representing and the privilege privilege of representing rural electric cooperatives in Alaska. What makes us unique among trade associations, the counterparts are, as you know, Edison Electric Institute and APPA, American Public Power Association. We have a pretty broad and deep applied research capabilities.

You know, we collaborate with a lot of national labs, the National NLR that was on stage today, and then other labs that you see the exhibitor booths there outside. We do a lot of— and with other partners, with vendors and organizations such as EPRI and so on. So we do a lot of those partnerships and do projects through those partnerships to scale and then bring those solutions to electric cooperatives and anybody else who want to really adopt them. So that's who we are and looking forward to the session. Thank you.

And I am quickly just going to toss you another question and then I'll turn it over to Mr. Rob. So Sorry, I didn't prep you for that. No problem. So how are electric utilities in the lower 48 preparing for the significant load growth associated with data centers and AI-driven demand?

Yeah, that's— I prepared a page full of comments on those questions, but we don't have a time. Oh, you're going to make moderating challenging for me, aren't you? But here's the thing, right? And one of the things I did when I was doing some research is that there's a lot of solutions that's being talked about. For very similar challenges, right?

What are those challenges? One is full cost recovery from a cost causation principle, right? No member subsidies of any sort, right? How do you assure that? Second is financial risk mitigation.

Now, when you invest in T&D and a lot of power supply, you know, how do you make sure, you know, the contracts do materialize, the data centers do materialize, and then the planning that goes with it? One of the biggest challenges is filtering speculative projects. You know, there's tens of gigawatts and hundreds of gigawatts across the country that's been proposed. How do you know which ones are real? A lot of times there are duplicate applications across the country in many states, right?

How do we know that? So that is— and then, of course, preserving reliability for all members. You know, at the end of the day, it's the co-op, the founding principles is safety, and for all electric utilities, really, safety, affordability, and reliability. Right? So that is, that is very important.

So what we see as common mechanisms, eligibility thresholds for making sure the right rate classes are assigned to the right loads, depending on the size of the data centers. Again, back to the subsidy issue. The other thing is minimum bills. If you have a contracted capacity, whether you take that capacity or not, you pay the minimum bill because that capacity has been planned and constructed for that purpose. And then moving from monthly to weekly to daily billing.

And one co-op we know is moving to daily billing of data centers. It's so large that they want to make sure that they realize that revenue and realize that bill on a daily basis. And then you have— and then, of course, margin calls in power markets. So, for example, if there are co-ops in power markets, then the collateral that the data center puts up, if the energy prices go high, if collateral goes low, then there is a margin call. So that happens.

A few other quick things here is, of course, upfront infrastructure payments. All T&D, transmission and distribution infrastructure, upfront 100% gets paid by the requester, which is in this case a data center. And then load ramp schedules, if 100— say a 500-megawatt data center is proposed, not all of it is coming in at once. Which year, how much load is coming, and when, and then planning for it becomes a big challenge, right? So getting that.

I'm giving you 30 seconds. 30 Seconds. And then finally, depending on the financial creditworthiness of the developer or the proposer of the data center, letter of credit, early termination fees, and I mentioned collateral. So those are some of the key things. And then one last thing is contract term, aligning that with, for example, the building lease.

The building a data center, 15 to 20-year lease, aligning the power purchase contract with that 15 to 20 years so that there's some certainty in terms of offtake. Those are some of the best practices. Thanks. Thank you so much. And actually, the reason why I threw you that question is I knew that you were going to set Mr.

Rob up to talk about key topic, which is reliability. So Jim, if you could tell us about what is NERC, the North American Electric Reliability Corporation. Sure. And you can give me more than a 30-second warning. Come over and kick me if I'm droning on too long.

So NERC is quite a unicorn in the world of energy. We were—. We were basically designed to be the trade association for the physics of the grid, although not everybody uses that term but me. We were set up really in response to the 2003 Northeast blackout. And our goal is to set mandatory and enforceable reliability and security standards for the bulk power system across the interconnected parts of North America.

Now, that does not include Alaska. But interestingly, Alaska over the last couple years has created a similar organization— I think it's called the Rail Belt Reliability Organization— to do— perform similar services to what we do in the lower 48 and the Canadian provinces. What's important to know about us is that we are fundamentally a nonpartisan partisan, independent organization. We're funded by ratepayer assessments. So the great thing about me is I don't have to carry anybody's water, right?

I can look at what's going on on the grid. And we talk a lot about the dynamics. We research the issues on the grid and make sure that we're kind of factoring that into the reliability requirements that the utilities have to conform to. So that's us in a nutshell. Thank you.

Thank you. So I understand that NERC recently issued a reliability guideline and a Level 3 alert related to large computational loads. Can you tell us about these developments? Yeah. So we formed a— I mean, this large load, what we call large loads, is truly a transformational issue for the power grid.

We've not seen this kind of load growth since really since the post-World War II era. And we haven't seen loads of this size, uh, uh, really ever. Uh, so it's a really kind of a generational, uh, moment. We formed an advisory group consisting of, uh, you know, utility leadership, data center leadership, uh, the trade associations. And the one thing that came through very clearly is that everybody wants clarity, uh, consistency, and they want it done yesterday in terms of how to interconnect these very, very large computational loads onto the grid in a way that promotes and preserves reliability for everybody.

So two of our tools are a reliability guideline, which we issued 3 weeks ago, and then a Level 3 alert. And we've only issued 3 Level 3 alerts since we were formed. And a Level 3 alert lays out the— what we would describe as the essential actions that utilities ought to take when they contemplate interconnecting a load of the scale and nature of the data centers. It's not enforceable, right? So we don't audit utilities to it the way we would a reliability standard.

But it does lay out a very clear expectation of what utilities should be doing in terms of modeling, commissioning loads, making sure that there's good interchange of information between the load and the utility so that as the load operates, the utility.