Alaska
Inside the 'titanic' legal case that will help determine Alaska's energy future: an analysis
Should Anchorage residents who consume more electricity, and use up more of the region’s dwindling supplies of natural gas, have to pay a higher price to reflect the steeper cost of the imported fuel that will replace it?
How much will developers of wind and solar projects have to pay to move the electricity they generate across power lines they don’t own?
And how can businesses and residents be encouraged to reduce their energy use and thereby delay the need for expensive gas imports?
All those are questions that now must be answered by the gubernatorially appointed members of the Regulatory Commission of Alaska, following the recent conclusion of a month-long public hearing.
Their ruling will help decide the future of Anchorage’s energy supply; the price of electricity for the city’s residents, businesses and other users; and the costs that developers of wind and solar farms could face to connect their projects to the grid.
The wide-ranging hearing addressed a request by Anchorage-based Chugach Electric Association, the state’s largest utility and one of its largest buyers of natural gas, to raise its rates for all types of customers by an average of 5.5%.
The proceeding, known as a rate case, involves a sprawling array of subjects connected to Chugach’s operations and its 90,000 members — including efforts to delay the impending depletion of the region’s natural gas deposits.
That’s where a request from Renewable Energy Alaska Project, or REAP, an advocacy group that intervened in Chugach’s case, comes in.
Citing a state law that calls for the “conservation of resources” in electricity generation, the Anchorage-based advocacy group is making an unprecedented request: that the commissioners force Chugach to create a new payment scheme for its residential customers to reward reduced consumption.
Chugach wants to charge those customers 15 cents per kilowatt-hour of electricity, regardless of their total use. REAP, with help from the environmental law firm Earthjustice, is asking for two tiers of charges.
The first tier would charge residential customers 13 cents per kilowatt-hour to use up to 450 kilowatt-hours a month — roughly the same amount that the median Chugach member household now uses.
The second tier would boost rates to 17 cents per kilowatt-hour for each one above 450 — an increase of roughly 30%.
That increase, REAP says, would align the second tier with the higher prices Chugach customers will face once the company fuels its power plants with imported liquefied natural gas, instead of local supplies. REAP says the bump in cost would send “an appropriate price signal to consumers.”
“The gas supply crunch will arrive sooner if the commission does not promote conservation of gas through Chugach’s rates,” Hannah Payne Foster, an Earthjustice attorney working with REAP, said in her closing arguments at the hearing last month. “Our proposal is to send real cost signals to consumers that reflect the true cost of their consumption decisions.”
Chugach’s attorney, Dean Thompson, didn’t directly address REAP’s proposal in his closing arguments, and a spokeswoman for the utility, Julie Hasquet, declined to comment.
But in its final written brief, filed last week, Chugach said that REAP’s expert witness, under cross examination, couldn’t predict just how much gas would be saved by the organization’s “drastic and novel recommendations.” The proposal, Chugach added, would “arbitrarily” boost prices above costs and send “signals to consumers that may not be in the consumer’s best interest.”
A $10,000-an-hour hearing
REAP’s proposal is far from the only one that asks the commissioners to adjust the rate increase requested by Chugach: A dozen other parties, from businesses to utilities to government agencies, also intervened in the case.
Each is asking the commission to adjust the proposed rates that Chugach wants its members to pay.
The monthly checks that those members have to write to the utility are not solely tied to the number of kilowatt-hours of electricity each of them uses. Instead, they hinge on complex formulas that divide up the utility’s different cost categories — like fuel, power plant construction and customer service — and assign shares to different classes of members, like residential customers or large users like hospitals and universities.
Though they have drawn little public attention, the technical arguments over those components, and how they’re divided and assigned in the future, have filled hundreds of pages of written testimony to the commission.
That’s in part because of the huge stakes of the rate case, with commissioners asked to decide how to apportion payments of the roughly $260 million in yearly revenue that Chugach needs to operate.
Some of Anchorage’s biggest power consumers — including the federal government, the University of Alaska Anchorage and JL Properties, a major commercial real estate developer — are participating in the case. At the commission’s month-long hearing, so many attorneys and experts were present that one of them referred to the proceedings as “titanic” and estimated they were costing the parties, collectively, some $10,000 an hour.
Several key areas of dispute have emerged since Chugach initially filed its rate request in June 2023.
One is the profit margin that the commissioners allow for Chugach, calculated using a financial benchmark called “times interest earned ratio,” or TIER. Chugach wants to raise its TIER — a ratio expressing how much the utility’s yearly earnings exceed its required debt payments — to 1.75 from 1.55.
Critics, like JL Properties, say the TIER increase would add $9 million to Chugach’s profit margin and isn’t needed because the utility’s financial health is already sound. Chugach argues that the higher TIER would allow it to borrow money at lower rates, better respond to unexpected costs and emergencies and maximize its options as it brings renewable power projects online and contends with the natural gas shortage.
Another major disagreement is over Chugach’s proposed 19% increase in the rate it charges other utilities to ship electricity across its transmission lines.
Chugach says that hike aligns with inflation over the years since the rate last went up, and would help cover the cost of infrastructure Chugach acquired when it bought Anchorage’s city-owned utility in 2020.
That infrastructure sits between a major power plant on the Kenai Peninsula that sometimes ships power through Anchorage toward Fairbanks.
But the city-owned utility did not previously require payment from the other utilities whose electricity traveled across its lines.That’s one of the objections that those other utilities, including Kenai Peninsula-based Homer Electric Association and Fairbanks-based Golden Valley Electric Association, are making to Chugach’s proposed boost in transmission charges.
The other utilities also argue that higher transmission rates will discourage construction of large-scale renewable power projects, which would face steeper costs to ship their electricity through Chugach’s territory.
REAP targets “gas supply crunch”
The proposal from REAP, meanwhile, is most focused on Chugach’s residential customers, as is a proposal from the Alaska branch of the AARP, a group that advocates for the interests of Americans over 50 years old.
Broadly, the two organizations want Chugach’s rates to be more reflective of the overall amount of electricity used by customers and less influenced by other elements of the cost-setting formula — a structure that would give those customers more ability to control the size of their bills.
If adopted by the commission, they say, their proposals would encourage consumers to use less natural gas. They say their proposals would also give Chugach flexibility to tinker with per-kilowatt-hour rates to help match demand with the variable power supplies generated by wind and solar projects.
One of AARP’s arguments targets Chugach’s request to boost its monthly flat-rate, customer service fee for its pre-existing households — those that were members before the 2020 acquisition.
Those pre-existing households had been charged a flat fee, regardless of the amount of power they used, of $8 a month, in addition to their per-kilowatt-hour bills. Chugach now wants to raise those flat fees to $13.68, to match the higher service fees charged to former members of the city-owned utility who are now Chugach customers .
The AARP’s expert witness, in his written testimony, said that proposal could boost overall monthly bills as much as 16% for the Chugach households that consume the least amount of power. The witness, Ron Nelson, proposes that the flat fees instead be set at $10 for both sets of customers.
Both the AARP and REAP also target substantial charges in Chugach’s current pricing formula, and its proposed new one, that are tied to customers’ highest single hour of electricity use over the course of a year.
Those charges are intended to account for the fact that utilities must build and maintain power plants to meet the peak demand of their entire system — even if far less power is being used during the rest of the year. As a result, rates are often designed to assign the cost of maintaining plants to meet peak demand to customers that contribute to that demand the most.
REAP argues that Chugach has long had more than enough generating capacity to meet peak demand — and that its newest power plants were built not to meet its system’s maximum load, but to boost efficiency and reduce fuel consumption.
As a result, REAP argues, the demand charges should be reduced, since the newest power plants weren’t built to meet the system’s peak load. Instead, the group says, Chugach’s rates should be more tightly linked to the overall amount of electricity each customer consumes. That would give customers even more incentive to reduce their power use — and, consequently, Chugach’s use of natural gas.
“We are in a system with significant excess capacity built primarily not to serve peak demand, but to produce energy more efficiently,” Foster, REAP’s attorney, said in her closing arguments. “And this system runs primarily on natural gas, for which we are facing a major supply crunch within this decade.”
The public hearing on Chugach’s requested rate increase ended July 18.
The commissioners are expected to issue their final ruling within the next two months. Any of the parties involved can appeal the decision to the courts.
Nathaniel Herz welcomes tips at natherz@gmail.com or (907) 793-0312. This article was originally published in Northern Journal, a newsletter from Herz. Subscribe at this link.
The state agency leading some of Alaska’s most polarizing development projects has approved a new communications budget, saying it needs to do a better job telling its own story amid attacks from critics.
The state-owned Alaska Industrial Development and Export Authority is run by a former chief of staff to Gov. Mike Dunleavy and is charged with promoting economic growth and expanding natural resource extraction and exports.
It is leading work to develop state-owned oil leases in the Arctic National Wildlife Refuge and also hopes to build two controversial new roads to access mining prospects in Northwest Alaska and outside of Anchorage.
Those projects have drawn sharp opposition from conservation organizations and other critics, including lawsuits, critical op-eds and campaigns that have labeled the agency “Bad AIDEA” and caricatured its leaders.
At a meeting in Ketchikan this month, board members, with no public discussion, authorized AIDEA’s staff to spend up to $700,000 a year on a new communications budget — formalizing a plan that the agency says was previously budgeted inconsistently through spending on individual projects.
The new communications plan, the agency said in its formal resolution authorizing the spending, will “ensure proper public engagement, transparency, and stewardship of the authority’s mission.” The money could go toward trade shows and conferences, responding to media inquiries and “other communications-related needs,” according to the resolution.
The agency’s executive director, Randy Ruaro, referred questions about the plan to Dave Stieren, an AIDEA employee who ran an advertising agency and hosted a conservative talk radio show before joining the Dunleavy administration.
Stieren said he could not provide exact figures on AIDEA’s past communications spending, but he acknowledged that the new plan should allow the agency to meaningfully boost its public profile.
The $700,000 a year, he added, is a limit, and the agency will set a final budget through a request for proposals process.
“Mothership AIDEA has done, frankly, little to nothing on a consistent basis to tell our story,” Stieren said in an email — particularly when it comes to its loan programs that have helped finance tourism and hospitality businesses, like the Alaska Club fitness chain and Anchorage’s Bear Tooth pizza restaurant and theater.
“We’re far more than roads,” Stieren said. “But since we’ve really not promoted or showcased our efforts in traditional finance areas, I understand the narrative or lack thereof that folks may have.”
Stieren has also personally defended AIDEA on social media, including over the weekend — when he posted a conservative news website’s positive story about an agency-owned shipyard and said that “when commie libs attack AIDEA, they attack projects like this.”
AIDEA’s board chair, Bill Kendig, declined to answer questions about approval of the new communications budget when reached by phone.
At the Ketchikan meeting, one AIDEA critic, Melis Coady, credited the agency with formalizing communications spending as a “step toward accountability.” But she said that the plan doesn’t “deliver the transparency it describes” because it gives Ruaro, the executive director, authority to approve communications spending, and only requires that he report it to the board if asked.
“The authorization is broad, the dollar amount is undefined, and expenditures are approved solely by the executive director,” said Coady, who leads a conservation group called the Susitna River Coalition.
Ruaro, in an email, said AIDEA will issue reports on communications to board members “whether requested or not.”
Nathaniel Herz is an Anchorage-based reporter. Subscribe to his newsletter, Northern Journal, at northernjournal.com.
In exchange for living in what is perhaps the country’s most beautiful state, Alaskans sometimes have to do without: professional sports teams, Trader Joe’s and, well, sunlight for half the year. But we make up for it with the Iditarod, reindeer sausages and chasing the aurora borealis. In other words, we often have to make our own fun. And by “fun” I mean “beer.” Those words are interchangeable, right?
Beer is a big part of life for Alaskans. We hike with it, camp with it, boat with it, cook with it and pair it with foods like the stuffiest of sommeliers. We throw it monthly birthday parties like the First Tap events at Broken Tooth Brewing Co. (otherwise known as Bear Tooth Theatrepub and Moose’s Tooth Pub & Pizzeria), complete with national musical acts like Modest Mouse, Clinton Fearon, and Norah Jones. We even occasionally do yoga with it (at downtown’s Williwaw Social). In other words, we take it everywhere and we take it seriously.
Beers from the state’s biggest brewery, Alaskan Brewing Co. based in Juneau, might already be in your refrigerator if you live in one of the 25 states where it’s available. Established in 1986 by Marcy and Geoff Larson, it was the 67th independent brewery to open in the country. With a steady line of signature brews, including their most recent “Wildness” beer, it’s the most well-established of all the state’s breweries. Expect seasonal specialties that incorporate ingredients like cranberries, raspberries, locally roasted coffee, locally grown white wheat from the Matanuska-Susitna area and even Alaska spruce tips. Ubiquitous around Alaska, this is our Papa Beer, if you will (I’ll show myself out).
But Alaskan Brewing is just one out of the more-than 50 breweries, distilleries, meaderies and cideries in the state (for an excellent list visit brewersguildofalaska.org). And while almost half of them are in Anchorage or within a short drive of our state’s largest city (including the relatively populous communities of Girdwood, Eagle River, Palmer and Wasilla), some of our most remote ports of call and tiniest towns are also in on the brewing action (I’m looking at you, Cooper Landing Brewing Company in Cooper Landing, population 231).
The ever-expanding Denali Brewing Co. in Talkeetna (population 997) may be a small-town hero, but it’s anything but small. Their four signature beers — Mother Ale, Chuli Stout, Single Engine Red and the ever-popular Twister Creek IPA, as well seasonal brews like Slow Down Brown and Flag Stop Milepost #3 — are year-round mainstays of summer barbecues and winter bonfires around the state.
This brewery is also home to the more recently established Alaska Cider Works, Alaska Meadery (featuring “Razzery,” a mead made with raspberries, sour cherries and apples) and Denali Spirits (featuring vodka, gin, whiskey, and “smoke” whiskey), because when you’ve fermented one, why not ferment them all?
(Denali Spirits’ canned cocktails, especially their blueberry mojito, have been so popular in Anchorage that at one time there was a Facebook page largely dedicated to tracking them down. Luckily, supply has since caught up with demand.)
Some breweries are even more remote. Ports of call and island hopping here can be one way to get your fill of hops. Breweries can be found in Ketchikan (Bawden Street Brewing Co.), Kodiak (Kodiak Island Brewing & Still, Double Shovel Kodiak Cidery, and Olds River Inn), Homer (Homer Brewing Co. and Grace Ridge Brewing Co. for beer, and you can also check out Sweetgale Meadworks & Cider House for hard cider and locally sourced meads featuring ingredients like nagoonberry), Sitka (Harbor Mountain Brewing), Seward (Seward Brewing Co. and Stoney Creek Brewhouse), Valdez (Valdez Brewing and Growler Bay Brewing), and Skagway (Klondike Brewing Co. and Skagway Brewing Co.).
Of course, many trips to Alaska begin and end in Anchorage. And if, during your travels, you’ve foolishly left some beers untasted, you can make up for lost time in our state’s biggest city which boasts — let’s face it — a ridiculous number of exceptional craft breweries.
Downtown’s Glacier Brewhouse specializes in oak-aged English and American West Coast-style beers, 13 of them, from blondes to stouts. Beneath the floor of the Brewhouse is a “Wall of Wood” comprised of casks of special release beers that are conditioned in oak barrels once used to age wine and bourbon. The history of the oak imparts “mother tongue” flavor characteristics, like vanilla and coconut, into these limited edition brews. Opt for one of these unique beers or choose from their flagship choices like raspberry wheat, oatmeal stout, imperial blonde, Bavarian hefeweizen or a flight that includes them all.
Down the street is 49th State Brewing Co., which expanded into Anchorage from its original location in Healy, at the edge of Denali National Park and Preserve. If you are unable to visit their flagship location, where you can sip beer while playing bocce or horseshoes on the lawn, you can catch up with them here. There’s a unique selection that includes beers like Smok, a smoked lager, as well as seasonal offerings like the Tiger’s Blood Sour, an homage to shave ice described as ”ferociously fruity.” Or there’s “Apple Fritter Ale,” with hints of cinnamon, icing, caramel, and vanilla. This location also boasts some of the best views in Anchorage and an expansive outdoor rooftop patio.
Just about all of the full-service restaurants in downtown Anchorage proudly feature some variety of Alaskan beers. In the heart of downtown, Humpy’s Great Alaskan Alehouse prides itself on a huge selection of beers, both international and local. Tent City Taphouse offers a diverse and carefully curated list of 24 rotating local brews, including their house beer, Tent City Tangerine IPA brewed by Glacier Brewhouse. Tent City regularly hosts “Taste of the North” beer dinners featuring Alaskan brewers. One, in collaboration with Grace Ridge Brewing Company, featured smoked salmon canapes with Black Pepper IPA, classic beef Wellington with an Oystercatcher stout and roasted honey lamb chops with a Winter Cranberry Ale.
If you have transportation around the city, treat yourself to a brewery tasting-room tour. Found in unassuming little side streets in the more industrial areas of Anchorage, some of our best beers can be sipped and savored at the source. Finding these funky little spots can feel like being invited to a secret party. And it’s a glimpse into Anchorage’s most authentic beer culture.
In midtown, Onsite Brewing Co. has unique, small-batch brews in a funky relaxed environment. Further south, King Street Brewing Co., Turnagain Brewing, Cynosure Brewing, Magnetic North Brewing Company, Brewerks, and one of our newest, Ship Creek Brewing Company are all within a stone’s throw of one another. If you’re lucky, you might run into one of Anchorage’s popular food trucks parked outside, so you’ll have something to wash down with your flights. Depending on the day, you might find reindeer sausages, pad Thai, cheesesteaks or pupusas. On the weekends, Anchorage Brewing Company features a top-notch in-house pop-up restaurant, called Familia, with a rotating menu featuring local Alaskan ingredients.
One of the newest and furthest south breweries, while still in the Anchorage bowl, is Raven’s Ring Brewing Company, which is a brewery/winery and meadery. From a traditional IPA to a Concorde grape wine called Grape Juice to a rotating Vintner’s pour like Sweet Peach Jalapeno mead, this ambitious operation is challenging the notion that you can’t please everyone.
Other Anchorage points of interest for non-hoppy but still home-grown adult beverages include Anchorage Distillery, Zip Kombucha, Double Shovel Cidery and Hive Mind Meadery.
If your travels are over and you still haven’t had your fill, check out the Silver Gulch Brewing & Bottling Co. inside Terminal C at the Ted Stevens Anchorage International Airport on your way out of town. An offshoot of the flagship Silver Gulch brewery in Fox, Alaska (about 10 miles north of Fairbanks), this location has a bar and restaurant, and a retail shop carrying growlers of their own brews as well as those of other Alaskan brewers and distillers. Last-minute souvenir shopping never tasted so good.
Before you start your great Northern beer safari, bear in mind that tasting rooms often have limited and varying hours, so always double-check before planning a visit.
Whether your travels take you to fine-dining restaurants, low-key alehouses or even rustic cabins in the woods, make like an Alaskan and fuel your adventures with one of our beloved, home-grown brews. When in Alaska, drink as the Alaskans do.
Mara Severin is a food writer who writes about restaurants in Southcentral Alaska for the Anchorage Daily News.
WASHINGTON — The U.S. Coast Guard announced Thursday that the first two Arctic Security Cutters will be homeported in the State of Alaska. Anticipating delivery of the first Arctic Security Cutters by the end of 2028, the Coast Guard has begun planning to ensure necessary infrastructure and support are in place to receive two icebreakers. Ensuring these vessels are supported by trained and ready crews, and ready homeport facilities including housing, will be essential to delivering full, enduring operational capability required to meet emerging Arctic security challenges.
“Homeporting these two Arctic Security Cutters in Alaska is a decisive step forward in securing America’s Arctic frontier,” said Secretary of Homeland Security Markwayne Mullin. “I want to thank President Trump for his bold leadership and vision in directing this critical investment, as well as Senator Sullivan and the entire Alaskan Congressional delegation for championing the funding that made these icebreakers possible. These vessels will deliver the enduring operational presence our nation needs to protect sovereignty, deter foreign adversaries, and safeguard vital resources for the American people..”
The homeporting of the first two Arctic Security Cutters in Alaska builds on the historic expansion of the Coast Guard’s icebreaker fleet and underscores an unprecedented investment in the Arctic. This announcement marks a national milestone in U.S. Arctic capability, following contract awards for up to 11 Arctic Security Cutters. Fueled by $3.5 billion in funding in the Fiscal Year 2025 Reconciliation Bill and facilitated by a groundbreaking Memorandum of Understanding (MOU) between the United States and Finland in October 2025, the acquisition of Arctic Security Cutters will fulfill President Trump’s directive to rapidly deliver America’s newest icebreaker fleet.
“Homeporting Arctic Security Cutters in Alaska underscores the United States’ leadership as a maritime power in the Arctic,” said Adm. Kevin E. Lunday, commandant of the Coast Guard. “By strategically positioning these state-of-the-art icebreakers in Alaska, the Coast Guard will maximize our ability to defend our northern border and approaches, while reinforcing America’s maritime dominance in a crucial region of strategic importance.”
Through contract awards to Rauma Marine Constructions Oy of Rauma, Finland, Bollinger Shipyards Lockport, L.L.C., and Davie Defense, Inc. of Vienna, VA, the U.S. will immediately benefit from our Finnish partners’ icebreaker expertise while coordinating the onshoring of that expertise and shipbuilding to the United States. Under the MOU, Finland will construct up to four ASCs for the U.S Coast Guard. U.S. shipyards will build and deliver up to seven additional ASCs. Delivery of the first Arctic Security Cutters is expected by the end of 2028.
Arctic Security Cutters will form the backbone of a revitalized U.S. icebreaker fleet, strengthening American maritime dominance in the Arctic. Fielding specialized capabilities, these icebreakers will defend U.S. sovereignty, secure critical shipping lanes, protect energy and mineral resources, and counter foreign malign influence in the Arctic region. A robust icebreaker fleet will enable the Coast Guard to control, secure and defend U.S. Alaskan borders and Arctic maritime approaches, facilitate maritime commerce vital to economic prosperity and strategic mobility, and respond to crises and contingencies in the region.
Acquisition of Arctic Security Cutters supports the Coast Guard’s ongoing modernization, through which the Service is transforming into a more agile, capable and responsive fighting force.
Memorandum on ASC Homeporting
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