Emissions Rule Lowers Costs Associated with Diesel-Generator Emissions for Small Alaska Communities
January 17, 2013
In recognition of the challenges faced by Alaska utilities, the rule specifically references the “high energy costs, extreme weather conditions, lengthy travel times, inaccessibility, and very low population density.” Exempted utilities will be able to comply with management measures designed not to increase the already high costs of electricity in Southeast Alaska’s urban centers and rural Alaska at large.
Earlier drafts had a more narrow definition of rural Alaska that exempted many rural communities. It would have exposed the Copper Valley and Valdez residents, who are reliant on smaller diesel generators, as well as the larger Southeast Alaska communities of Ketchikan, Sitka and Juneau, which use diesel generation as a backup to hydropower plants, to higher costs.
In a letter to the EPA, Alaska’s Congressional delegation stated, “Utilities throughout most of rural Alaska share a reliance on stationary diesel generation for base-load or backup generation. In addition, those utilities are confronted by great distances and high transportation costs for diesel fuel, goods and services; long, cold winters with low levels of light; extremely low customer density and a small number of ratepayers who can share additional costs; and a lack of connection to a major electric grid.
Juneau, Ketchikan and Sitka, the three largest communities in Southeast Alaska face similar issues as the small rural communities. These larger communities predominately rely on hydropower; however, they maintain diesel generation for emergencies, exceptional peak demand and times of low water. Relative to towns in the Lower 48 served by the national grid, the costs to comply are extremely high, and issues of distance, cost and extreme climate apply to these communities.
A couple of examples illustrate these dramatic costs. The City of Ketchikan, served by the Alaska Marine Highway System, predominately uses hydroelectric power but employs backup diesel generation. It would costa an estimated $1.5 million initially and a few hundred thousand dollars per year for Ketchikan to comply with the new standards. According to the letter to the EPA, this is roughly the equivalent of 25 cents per kilowatt hours, even though its backup generation on average is utilized only 1.18 percent of the year. Both Alaska Power and Telephone Company and Copper Valley Electric Association, which serve small, isolate towns, will have to spend hundreds of thousands of dollars each year, raising already high retail rates by at least 6 cents per kilowatt hour, for negligible reductions in pollutant levels.
The letter stated rural generation seldom constitutes a significant source of hazardous air pollutants given the small populations served by widely geographically dispersed utility generation facilities.
U.S. Senator Lisa Murkowski (R-AK), U.S. Senator Mark Begich (D-AK) and Rep. Don Young (R-AK) wrote EPA Administrator Lisa Jackson about the proposed rule in December 2011. Formally, it is called the National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines (NESHAP); New Source Performance Standards for Stationary Internal Combustion Engines, and is referred to as RICE (Reciprocating Internal Combustion Engines) NESHAP.
Edited by Mary Kauffman, SitNews
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