HEA Candidate Questions: Louie Flora
With the HEA board of directors election underway until May 5, the Alaska Energy Transparency Project is asking each candidate how they see the cooperative’s future and what part they intend to play in it.
Here are answers from District Three Candidate Louie Flora, running to represent the Kenai Peninsula south of Kasilof (find HEA’s district map here).
Flora is a commercial fisherman, primarily in the Bristol Bay driftnet fishery, and Governmental Affairs Director for the nonprofit Alaska Center. He’s served on the board of the Renewable Energy Alaska Project since 2015 and from 2004 to 2014 was an aide to several state legislative committees. His candidate profile can be found here.
Louie Flora — from his HEA candidate profile.
Questionnaire
Q: Why do you want to be an HEA board member?
I would like to help HEA move toward lower cost power generation, and to unlock benefits for member-owners through a fair rate structure for electric vehicle charging, revisiting HEA’s customer fee for net metering, and creating on-bill financing program for energy upgrades on homes and businesses as a way to lower overall thermal energy costs.
I believe the current statutory requirement (via Senate Bill 123 which passed in 2020) for the creation of an Energy Reliability Organization (ERO) will ultimately benefit customers with lower costs throughout the railbelt. The ERO should be governed by experts in economic dispatch of power, renewable integration and reliability – as is the standard in regional transmission entities in the Lower 48. The ERO should be informed by input from a diverse stakeholder panel including utilities, consumer advocacy, renewable energy, independent power producer and other groups. Railbelt utilities should NOT have majority control over the ERO, as this will create undue regional conflict and political maneuvering among the utilities. The future for the Alaska railbelt energy is through an independent, expert run ERO.
The HEA board needs to think broadly about the long-term implications of the ERO, and the new mandate for integrated resource planning railbelt wide. I want to be a board member to learn more about the HEA perspective on this new mandate, and work to adopt its terms to the benefit of the HEA service area. I would advocate for investments in transmission redundancy, as this builds resilience in the system which is important considering the harsh terrain, and weather conditions of our vast service area, as well as the increase in climate related wildfire risks.
Finally, I think HEA has the opportunity to lower our rates by steadily moving to renewable generation. This is a lower cost alternative to Cook Inlet natural gas which has been subsidized by the state legislature for many years, and is now increasing. With some of the highest electric rates in the nation, we need to make sure we are getting away from costly generation sources.
Q: Are there any particular projects or ideas you would champion as a board member? Are there any you would oppose?
A Pay as You Save model of on-bill financing is a financial mechanism that allows a utility to cover the upfront cost of a distributed energy solution and to recover its cost on the monthly bill with a charge that is less than the estimated savings. This program can be capitalized within HEA through a zero interest USDA Rural Development loan so there would be no net impact on the utility’s finances. I would like to revive the discussion of thermal heat pump incentives, as heat pumps can offer a good offset to energy costs for those currently on diesel or propane and their use is growing rapidly in Alaska. An on-bill financing program is a good way to pay for a heat pump as you would save money on overall thermal heat costs and use the savings to pay off the heat pump through your electric bill.
The use of this type of financing increases access to renewables like solar that can increase the value of homes, and businesses. It also opens up access to renewables for those in a lower income bracket who might not be able to afford the initial capital outlay.
I would also champion the creation of a Member Advisory Committee to the Board. This concept has worked for Golden Valley Electric Association in Fairbanks, and creates increased community buy-in for utility programs and projects, and serves as a good place to build future board members.
I would oppose new hydroelectric projects that ruin salmon habitat.
Q: If elected you will serve a three year term. If re-elected in the future, you could serve on the board for up to 9 years. What challenges and opportunities will HEA face in the next three years, and in the next nine? Ideally, what do you want HEA to be like three years from now? Nine years from now?
Challenges for the next three years include the rising cost for Cook Inlet natural gas, climate change related impacts to transmission infrastructure, lack of charging infrastructure for electric vehicles in the service area, steep electricity prices for consumers, lack of member engagement, lack of effective communication with membership on challenges and solutions.
Challenges for the next nine years include lowering the cost of electricity while generally increasing the electrification of the service area for heat, air conditioning and and transportation. Additionally there will be challenges in implementing the new railbelt wide transmission entity, the ERO, which will require a new approach to management of transmission and generation in the region. Merit order dispatch of electricity thoughout the railbelt will likely lead to decreased use of HEA natural gas generation facilities that ratepayers are still on the hook to pay for.
In three years I would like HEA to be regarded as a key component in decreasing a customer’s overall personal and commercial energy costs, including for home heating and transportation. In nine years I would like HEA to be a leader in renewable energy generation on the railbelt.
Q: The price of natural gas fuel typically makes up about a third of an HEA member’s bill, production and transmission costs are usually another third, and distribution costs about a quarter. Of the factors that drive HEA’s rates, which are under the board’s control? What are your plans for managing them?
The Board functions to set strategic goals, board policies, the budget, and to vote on large projects. Within these authorities, the board should look at long range price forecasts for Cook Inlet natural gas, as well as trends in the cost for other forms of energy, factoring in the high likelihood that a carbon tax will be imposed at the federal level – all of the major global fossil fuel companies have already built this into their modeling – which will increase the cost of natural gas and coal in the future. Alaska utilities need to be at the table with our congressional delegation and in line for federal infrastructure funds should congress approve a funding package. Federal funds can help offset utility costs and help move the whole railbelt toward less expensive energy sources.
Q: HEA is currently meeting its power generation needs. What reasons, if any, justify the construction of new generation or the premature retirement of existing generation?
With the passage of SB 123 and the requirement for integrated resource planning across the railbelt, new construction of utility-owned generation projects will require approval from the Regulatory Commission of Alaska. The likely approach to integrating low cost renewables in the near-term will be through the purchase of power from Independent Power Producers (IPP). Legislation under consideration this spring in the state legislature – SB 69 – extends an exemption from RCA regulationfor IPPs. The main reason to buy IPP power would be if that power is cheaper than natural gas.
Premature retirement of an HEA natural gas generation facility may occur due to the new statutory requirement for a regional approach to load balancing and economic dispatch of lowest cost power
Q: What approach should HEA take to Railbelt-wide cooperation? What potential problems or opportunities exist for HEA in the ongoing process of forming an Electrical Reliability Organization? What would you see as an ideal outcome for HEA’s participation in an ERO? What is an undesirable outcome?
The railbelt utilities are voluntarily participating in a structure called the Railbelt Reliability Council (RRC) to adopt a cooperative management structure with stakeholder governance which ultimately could become the railbelt ERO. If this voluntary effort falls apart, or is not certified by the RCA, the RCA can craft and certify an ERO on its own. HEA is at the table in the RRC s and should continue to be there to ensure that other, larger utilities, like Chugach Electric Association do not have the dominant voice in RRC discussions. HEA should advocate for a truly independent RRC/ERO that is governed by diverse stakeholder groups and informed by experts in regional transmission systems. Railbelt utilities must not form a majority vote or the independence of the new system will be compromised.
An ideal outcome of an independent system operator is the delivery of lower cost power and the broad incorporation of renewable energy up and down the railbelt. An undesireable outcome would be that HEA is not at the table, and the new governance structure moves forward without HEA input and consideration for circumstances unique to the HEA service area.
Q: How would you have voted on these recent HEA board decisions? Why?
Contracting with Tesla for a Battery Energy Storage System
Yes. I think the cost/benefit analysis should have been more of a public process at the early phase in the discussion. I have heard concerns from employees about the cost of the battery, but generally I believe that this is critical to achieving increases in renewable energy.
Participating in the Battle Creek expansion of Bradley Lake hydro project
Yes. Bradley Lake currently provides the cheapest energy on the Railbelt. I support increasing its capacity. I do not know about the salmon protection measures incorporated into the Battle Creek diversion, though I do not support the destruction of salmon populations, so would support strong mitigation measures to protect
salmon in future projects.
Selling the Soldotna-to-Quartz Creek transmission line to the Alaska Energy Authority
Maybe? - I do not know enough about this sale to comment on a specific vote. Generally I believe there needs to be increased investment in Railbelt transmission capacity and redundancy with a system wide approach that factors in the new Energy Reliability Organization structure. The Alaska Energy Authority should work with all Railbelt utilities, the ERO, and the federal government to develop a long term plan for Railbelt wide grid modernization.
Setting the goal of meeting 50% of HEA’s energy needs with renewables by 2025
Yes. This policy sets the stage and direction for HEA for the years ahead. Like the State of Alaska Energy Policy I believe that this is more of an aspirational goal but a good and ambitious step. I expect to see state legislation move forward that proposes a Renewable Portfolio Standard for the entire Railbelt in the next few years. The new ERO for the railbelt will require supply and demand of electricity in the southcentral region to be balanced together, creating a large load balancing area which will make it much more cost effective for variable renewable power to be incorporated into the energy mix.
