Independent Power

The Cost of Electricity from Alaska Independent Power Producers

Alaska’s growing independent power producers provide good, fair, reliable and long-term value for investment for Alaska’s energy ratepayers. Alaska’s Independent Power Producers invest their resources and must meet or beat market costs in order to be feasible and therefore successful. The independent “can do” spirit that is the hallmark of Alaska’s entrepreneurial legacy of our members. The cost of electricity generated by clean energy producers is equal to or less than the cost of electricity generated by Alaska’s public and municipal utilities. The Alaska Independent Power Producers assist Alaska in meeting renewable energy goal of producing 50% of Alaska’s power by renewable energy by 2025 by utilizing private know how and private capital to invest in and develop Alaska’s energy resources for Alaskans now and for years to come. Here are the facts:

The role of independent power producers in Alaska helps Alaska produce renewable energy

  • The federal and State government cannot do everything for everybody. This is especially true with Energy and energy costs. The State of Alaska has substantial and continuing subsidy expenditures in Power Cost Equalization payments, emergency energy payments and power programs to assist Alaskan communities. Some Alaska communities have no alternative to subsidies. However, many Alaskan communities need capital and know how to develop local resources in a market driven environment. In these communities, our members excel in filling the market niche of opportunity with know-how, efficiencies and precision of execution with accountability for financial resources. The members of the Alaska Power Producers provide low cost energy benefits that reduce the demand for governmental expenditures by using private capital, investments and know how to produce economically and market feasible projects. Market feasible is defined as the ability for a power project to stand on its own financially and sell power at or below market rates without the intervention of the government. The ratepayer, the utility and the state government all win. There are no losers with private competitive power.

  • Alaska is blessed with vast renewable and non-renewable energy resources and Alaska Independent Power Producers seeks to support the Alaska Constitution Section 8.4: where Alaska’s resources “…shall be utilized, developed and maintained on the sustained yield principle….”

  • The State of Alaska cannot meet its energy goal of 50% renewable by 2025 without the infusion of private capital and investment into developing Alaska’s renewable energy resources. AIPPA represents a non-centralized planning and non-governmental approach to developing Alaska’s renewable energy resources.

  • Alaska faces declining oil production and subsequent revenues. This decline will place governmental aid and assistance at risk. AIPPA reduces the pressure and need for future governmental subsidization by providing real energy answers to Alaskans needs now and in the future. AIPPA member project’s displaces governmental energy expenditures and saves Alaska funds that can be more wisely allocated to other important areas.

Good, fair and long-term value for money for Alaska’s ratepayers

  • AIPPA members represent private enterprise that is borne from opportunity and competition. AIPPA members must deliver reasonable cost power in order to meet market values. Every dollar that an Alaska Independent Power member invests saves the ratepayer funds that would have been invested by their utility and these energy investment dollars stay in Alaska.

  • AIPPA members develop renewable energy projects where the price is fixed in a contract in today’s dollars for terms of 20, 30, or even 40 years. Alaska’s independent power producers provide a long term hedge against commodity inflation and the rising cost of fossil based energy supplies.

  • Utilities and municipalities can enter into independent power producer long-term power contracts, thereby creating a hedge against market variations and eliminate price uncertainty for its ratepayers with the financing risk left to the independent producer.

  • Renewable energy is forever and every kilowatt produced provides Alaskans with much needed long term energy security providing good quality of life that is provided by reasonable and low cost energy.

Growing Alaska’s rural and urban economies

  • To date, Alaska’s independent power producers existing and developing operations have or will have created 100’s of full time jobs of employment. Many of these jobs are in Alaska’s urban and rural communities that welcome these jobs. Developmental projects hire Alaskans and Alaskan companies for environmental services, planning, engineering, and construction of projects and logistics services.

  • The renewable energy sector has contributed more than over $150 million to the State economy and has attracted private capital to develop energy producing infrastructure for Alaska. These investments are growing as Alaska improves its business climate to support private investment and job creation in the renewable energy sectors.