CEA Candidate Questions: Fritz Krusen
Chugach Electric Association will be accepting paper ballots for its board of directors election until May 14, and electronic ballots until May 18. Until then, the Alaska Energy Transparency Project will be asking candidates how they see the cooperative’s future and what part they intend to play in it.
Here are answers from Leslie “Fritz” Krusen III, one of three candidates running for the single open seat on the Chugach board. Krusen, a retired electrical engineer who worked for ConocoPhillips, was also vice president of the Alaska Gasline Development Corporation. His candidate profile can be found here.
Fritz Krusen — from his CEA candidate profile
Questionnaire
Q: Why do you want to be a CEA board member?
I believe that CEA is a well-run organization, but with my experience I can help guide it to an even higher level of cost-effective service to the CEA customer-members.
Q: Are there any particular projects or ideas you would champion as a board member? Are there any you would oppose?
I do not have specific projects/ideas to champion or oppose; I am not running because I have a particular “axe to grind.” I recognize that I do not know what the current Board or CEA management knows, but I do have a number of concerns that I would investigate and attempt to resolve if elected. As per my CEA Candidate Statement, I believe that CEA may be facing the following challenges:
Improving cost structure, considering the high cost of doing business in Alaska.
Ensuring reliable and cost-competitive natural gas supply for power generation.
Developing renewable generation and energy storage opportunities that are truly environmentally-friendly and that make economic sense.
Ensuring that CEA/ML&P merger synergies are attained or exceeded.
Improving Railbelt intertie reliability and efficiency.
Developing new industrial, commercial, and residential loads, to better distribute fixed costs.
Q: If elected you will serve a four year term. If re-elected in the future, you could serve on the board for up to twelve years. What challenges and opportunities will CEA face in the next four years, and in the next twelve? Ideally, what do you want CEA to be like four years from now? Twelve years from now?
My “challenges” list in Question 2 addresses the first part of Question 3. Regarding the 12-year horizon; CEA would have more of its generation coming from renewable sources (again, these would need to be truly environmentally-friendly and make economic sense), while having a robust gas supply for the high-efficiency and low-polluting gas turbine generators that provide local core generation and reliability. CEA will be successful in championing/enabling new consumer and industrial loads, especially electric vehicles for individuals and fleets. Railbelt interties would be improved to where natural resources would be conserved across Alaska (especially within the CEA domain); but local reliability would be preserved.
Regarding the 4-year horizon, CEA/ML&P synergies will be attained or exceeded. Methods to improve CEA cost structure will be investigated and implemented; resulting in containment or reduction of electrical costs to consumers. CEA will be on an arc to achieve the longer-term goals described in the first paragraph, and this would include evaluation/implementation of new technologies such as energy storage.
Q: The price of natural gas fuel typically makes up about a third of CEA’s operating expenses, while depreciation accounts for 17 percent, and administration 13 percent. Of the factors that drive CEA’s rates, which are under the board’s control? What are your plans for managing them?
As per the first two items and the final item on my “challenges” list, I would investigate if there were cost reduction opportunities within CEA; and I would investigate what could be done to increase/prolong natural gas supply or enable cost-effective alternative energy supplies. I would continue and increase CEA’s efforts to develop new loads (especially electric vehicles), since this would better distribute fixed costs.
Q: CEA is currently meeting its power generation needs. What reasons, if any, justify the construction of new generation or the premature retirement of existing generation?
CEA has done a commendable job of replacing older and less-efficient natural-gas fueled turbine-generators with modern, efficient, and low-polluting units. The Southcentral Power Project is a stellar example; with both the selected equipment and the project execution being “best in class.” CEA has also done an admirable job incorporating hydropower into its generation portfolio, with the Bradley Lake and recent Battle Creek augmentation serving as examples of “environmentally-friendly” renewable energy. Given the present stasis of electrical loads, it is difficult to envisage new generation required within CEA, unless there was an economic and environmental incentive to replace existing less-efficient generation. Replacement and retirement would need to meet CEA’s reliability requirements and the cost tolerance of CEA’s customers.
Q: What approach should CEA take to Railbelt-wide cooperation? What potential problems or opportunities exist for CEA in the ongoing process of forming an Electrical Reliability Organization? What would you see as an ideal outcome for CEA’s participation in an ERO? What is an undesirable outcome?
I can’t provide a good answer to this question until I am on the Board (if elected) and better understand CEA’s current Railbelt efforts (noting that CEA is currently a member of the Railbelt Reliability Council). Railbelt intertie cooperations seems to have improved since I lived in Kenai from 1989 – 1995; but I imagine that further improvements are possible. With that said, the Railbelt interties are somewhat tenuous and subject to physical interruption (wildfires, etc), so I understand if some of the Associations and Utilities wish to retain local facilities despite possible efficiency gains. The goal might be “best cost and efficiency, all things (especially reliability) considered.”
Q: How would you have voted (or if you’re an incumbent, how did you vote) on these recent CEA board decisions? Why?
Acquiring Municipal Light and Power. If in support, are there aspects of the acquisition you would have managed differently?
I strongly support CEA’s acquisition of ML&P, but I don’t know enough to second-guess any of the decisions. I would determine if there is a schedule to attain expected synergies; and if so ensure that the schedule is met or accelerated. In addition, I would challenge CEA management to search for new synergies that were not envisaged during the acquisition.
Establishing a Member Advisory Council.
I would want to discuss this item with my fellow Board members (if I am elected) before I reply. It’s unclear to me if the CEA Member Advisory Council (MAC) was proposed as a one-off for the CEA acquisition of ML&P, or if the intention was to make it a permanent Committee. I am certainly not opposed to a Member Advisory Committee, but also wonder if it is a bit redundant to outreach efforts by CEA and the Board. I do like the idea that the Member Advisory Committee would provide structure to what might otherwise be intermittent or ad-hoc outreach efforts.
