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HOMER – Railbelt utilities are returning to Juneau this year in search of $125 million for new transmission lines that they say would keep electricity costs low and reduce the number of blackouts in southcentral Alaska.  A similar effort failed last year after critics argued the economic benefits of the powerlines did not justify the cost to the state.

Supporters of the project say chances look better this year not because of new cost- benefit numbers, but because the state has more money to spend.  "We have the cushion of the windfall to pay for other things, which we may never have again," said Rep. Gail Phillips, R-Homer, who has co-sponsored a bill with nine other representatives to fund the powerlines.

Six lobbyists have signed on with Railbelt and state utility organizations to make a now-or-never push for the $125 million.  A draft feasibility study released last month by the Alaska Energy Authority also supports the project, though it says the economic benefits of the powerlines remain hard to quantify.  But Sen. Sam Cotten, D-Eagle River, a leading opponent of the project last year, said he still has to be convinced the state investment would make a difference on electricity bills in his district.  "Are we really building something that would otherwise be built by the utilities and be paid for out of consumer rates?" Cotten said.  "Or are we building something that would be nice to have if the state has the money to spend?"

The Railbelt intertie project consists of two new transmission lines, one between Kenai and Anchorage and one between Healy and Fairbanks.  Existing lines over those routes are too light to carry all the power utilities want to move, the utilities say.  In addition, the existing Kenai Peninsula transmission line through the mountains is exposed to avalanches, they say.  Cost of the two new lines, together with improvements in between, is estimated at $152 million to $161 million.  The utilities have agreed to pay any costs above $125 million, along with future maintenance costs.

The money the utilities want to spend is the last of the Railbelt Energy Fund, a $280 million fund originally set aside for Southcentral energy projects after planning for the huge Susitna hydro project was dropped.  Some of that fund was committed to the Bradley Lake hydro project near Homer and a planned coal-fired electric plant at Healy.  The last $100 million was set aside last year in an intertie fund.  The compromise left it up to this year's legislature to decide whether to spend the $100 million, plus interest, on the interties or on other projects. The rest of the $125 million requested by the utilities would come from the state's general fund.

One new wrinkle this year is that two alternative routes are being considered for the Kenai Peninsula portion of the project.  The original 70- mile route would string the transmission line across mountain frontage in the Kenai National Wildlife Refuge. Possible environmental problems prompted a look at an alternative route up the coast of the Kenai Peninsula to Point Possession, according to energy authority economist Richard Emerman.  Both alternatives would follow pipeline rights of way and use submarine cable to cross Turnagain Arm to Anchorage. A longer underwater crossing for the Point Possession alternative makes it more expensive, at $83 million compared to $75 million for the route across the wildlife refuge.

Refuge officials have not yet taken a position on the powerline but would prefer to see it go up the coast, said refuge manager Daniel Doshier.  The coastal lands were taken out of the refuge with just such transportation and development in mind, he said.  "It seems like there's one project after another that wants to come across the refuge," said Doshier.  "They could go up the coast and make development of the private property up there more possible."

The arguments for and against spending state money on the lines remain the same as last year.  Some utility officials say the project should be judged as a subsidy not to utilities, but to everyone in Southcentral who pays electricity bills.  "It's a project that will benefit over 90 percent of the people in the Railbelt," said Bob Klein, Homer Electric Association manager of administration.  "I don't think there's any other project that can claim that."

But critics contend the benefits are so marginal the utilities would never build the transmission lines with their own money.  Alan Mitchell, who critiqued past studies as a consumer advocate consultant for the state, said the state could better use the money to retire existing utility debt. "That way if the utilities really think it's a good idea they'd acquire another $150 million in debt to build the lines," Mitchell said.  "It would force them to make a rational decision."

The cost-benefit studies argue over such esoteric matters as reliability and potential savings from the flexibility of switching between generators in search of the cheapest power.  Even energy authority economist Emerman concedes these are tough numbers to pin down.  The new energy authority report weighs the past studies and supports the project, citing consultants who say the existing Railbelt transmission system does not meet national industry standards for reliability.

Even before the new report, authority executive director Bob LeResche was a public supporter of the project. Emerman, author of an earlier study that said the project didn't make economic sense, said the new report was drafted to explain the reasons for the position reached by LeResche and the agency's board.  In the past, Emerman said, Alaskans have tended to accept occasional power outages rather than build expensive backup systems.  The energy authority study notes the difficulty of applying national reliability standards to Alaska.  "One argument is that reliability in Alaska during the winter tends to be more valuable than in most other areas because of the climate," the study says.  "A contrary argument is that the consequences of an outage in cities such as Chicago or New York are likely to be more severe because of their higher level of dependence and expectations."  In any event, expectations in Alaska are higher today than in the past and will continue to grow, the report said.