• The Alaska Natural Gas Pipeline: What's It All About?

      Gorsuch, Lee; Tussing, Arlon R.; Persily, Larry; Larsen, Peter; Goldsmith, Scott; Foster, Mark; Fischer, Victor; Colt, Steve; Bradner, Tim; Berman, Matthew (Institute of Social and Economic Research, University of Alaska., 2005)
      Alaska has collected nearly $100 billion in oil revenues (adjusted to today’s dollars) since it became a state. Almost all those revenues have been from oil produced on the North Slope, where the largest known oil field in the U.S. was discovered in 1968. Construction of the trans-Alaska oil pipeline in the 1970s made development of that oil possible. The North Slope also has one of the largest accumulations of natural gas in the country—and for 30 years Alaskans have been hoping for construction of a second pipeline, to carry that gas to market. Gas pipelines have been proposed at times over the years. But none has been built, because investors did not think it was economic. Now, with higher natural gas prices and changes in the North American market, many people think a gas project may be possible. Alaska stands to gain a ot if a gas pipeline is built—a new long-term source of state revenues; more jobs and increased business activity; an increased local property tax base; and a potential new in-state source of natural gas for home heating, electricity, and industrial uses. With future supplies of natural gas from Cook Inlet uncertain, many Alaskans want one or more “spur” pipelines to be built from the main pipeline, to make natural gas available to Alaska communities. But access to the gas will come at a price, and not all Alaskans will benefit equally.
    • Alaska's $5 Billion Health Care Bill - Who's Paying?

      Goldsmith, Scott; Foster, Mark (Institute of Social and Economic Research, University of Alaska., 2006)
      Spending for health care in Alaska topped $5 billion in 2005. Just how big is $5 billion? It is, for perspective, one-third the value of North Slope oil exports in 2005—a year of high oil prices. It’s nearly one-sixth the value of everything Alaska’s economy produced last year. In 1991, health-care spending in Alaska was about $1.6 billion. Even after we take population growth into account, spending for health care increased 176% per Alaskan in 15 years. These soaring costs are taking a growing share of family and government budgets, increasing labor costs, and putting businesses at a competitive disadvantage.
    • Determinants of the Cost of Electricity Service in PCE Eligible Communities

      Foster, Mark; Townsend, Ralph (Institute of Social and Economic Research, University of Alaska Anchorage, 2017-01-20)
      This report is one of two companion reports ISER prepared for the Alaska Energy Authority. The other report, “True Cost of Electricity in Rural Alaska and True Cost of Bulk Fuel in Rural Alaska,” is dated October 26, 2016. That report estimates the full costs of providing electricity in rural Alaska, including the costs of subsidies provided to lower the price consumers pay. This second report assesses how the costs of electric generation in Power Cost Equalization (PCE) communities are or might be affected by three factors that are not related to the differences in electricity generation costs. Those three factors are the organizational structures of utilities, postage stamp rate design, and managerial information available on energy subsidy programs. 1. Organizational Structures of Utilities Electric utilities in PCE communities are organized as cooperatives, are run by local villages and municipalities, or are investor-owned utilities. The scale of these utilities varies widely, and includes regional utilities that manage separate electric grids in multiple communities. A review of those organizational structures indicates that: 1.1. There are significant differences in distribution, customer service, and general and administrative costs (DCG&A) across utilities. These differences are correlated with the utility size and organizational structure, with the smallest utilities having significantly higher DCG&A costs per kWh. 1.2. Small local utilities that have merged with larger regional utilities have benefited from reduced costs and professional management. Incentives to encourage small local utilities to join larger, more efficient regional utilities should be considered. 1.3. The cost of borrowing for large local and regional electric coops remains low compared with that for stand-alone local villages, municipalities, and investor-owned utilities. 1.4. The state government should consider allowing a return on equity as an allowable expense within the PCE cost of service [AS 42.45.110(a)] to enable utilities to build equity, enhance debt coverage and facilitate the expanded use of private capital, and reduce dependency on limited public capital resources. This private capital may take the form of investor capital for investor-owned utilities or member capital for cooperatives. 2. Postage Stamp Rate Designs 2.1. Postage stamp rate designs—a single rate for electricity for some set of customers—can help reduce costs and improve affordability in smaller, remote communities through an implicit cost subsidization from customers in larger communities. 4 2.2. The subsidies in postage stamp rates may decrease incentives for utilities to manage their costs, because higher costs may be subsidized by postage stamp rate-making. 2.3. The increase in cost in subsidy-providing communities risks inefficient bypass by large commercial or government users. This could increase the total cost of electric service and leave the remaining customers with higher rates and diminished affordability. Separating communities into rate groups according to their cost structure may mitigate, but not eliminate, the risk of self-generators bypassing the local electric utility. 3. Efficiency in Governance of Energy Subsidy Systems 3.1. To assess whether the PCE program is achieving its goals, transparent information about the allocation of the subsidies and about the operation of the subsidized utilities is required. The companion report to this one identified some issues about reliability of information generated under the current reporting system. Improvements in the reporting requirements could address these issues. A common issue is inconsistency in accounting for capital that state and federal agencies contribute to utilities. Those capital contributions include both grants or low-interest loans to finance capital projects as well as sources of short-term government financing, such as annual fuel loans, emergency loans, and write-offs of operating loans for troubled utilities. If capital investments for generation were separated from other capital, investments to reduce fuel costs (such as wind power) could be assessed more directly. 3.2. The PCE program is one of several programs that subsidize energy costs in rural Alaska, and an understanding of the interaction among these programs is required. An annual compilation of all state and federal heating and electrical subsidy support systems by community would enable better understanding of both individual program impact and also the collective programmatic impact of the subsidies on energy affordability. 3.3. Information on system reliability, usually measured as outage hours, is required to fully assess utility performance. 3.4. Currently, there is no information on how well the PCE program and other energy subsidy programs in rural Alaska target families and communities that face the greatest energy affordability challenges. Because of limitations on income data in small rural Alaska communities, assessing how well subsidies are targeted may be challenging. However, in light of general information that energy subsidies are often inefficient at poverty reduction, this is an important question. 3.5. The environmental impact of energy subsidies for rural Alaska, including the PCE program, through CO2 emissions and PM 2.5 emissions, has not been assessed.
    • Renewable Power in Rural Alaska: Improved Opportunities for Economic Deployment

      Crimp, Peter; Colt, Steve; Foster, Mark (2007)
      Sharp increases in the price of distillate fuel have led to wider economic opportunities for local renewable energy resources in the over 180 rural Alaskan communities that are served by electrical microgrids isolated from larger population centers. Between 2002 and 2007 the median price of diesel fuel for utility power generation in rural Alaska increased by 72% to $0.71/l ($2.70/gal). During this period the median unsubsidized residential cost of power increased by 20% to $0.468/kWh. The Alaska Rural Energy Plan, based on 2002 fuel costs, indicated widespread opportunities for cost-saving measures from end use efficiency, diesel generation efficiency, diesel combined heat and power, and wind energy. This paper assesses economics of small hydroelectric, wind-diesel, and biomass-fired combined heat and power under a range of future oil price assumptions.
    • Sustainable Utilities in Rural Alaska Effective Management, Maintenance, and Operation of Electric, Water, Sewer, Bulk Fuel, Solid Waste Final Report Part A: Overview

      Goldsmith, Scott; Wiita, Amy; Colt, Steve; Foster, Mark (Institute of Social and Economic Research, University of Alaska., 2003)
      Two reports are provided Part A is an overview - reliable and affordable utility services remain out of reach for thousands of Alaskans and between $1.5 and $2 billion of public investment is potentially at risk due to the inadequate operations, maintenance, and management of electric, water, sewer, bulk fuel, and solid waste utilities in many small rural Alaska communities. This report provides a foundation of facts and ideas that can be used to move toward sustainable utilities in these places. Part B contains supporting material and examines the maintenance, management, and operation of rural Alaska utilities.
    • Telehealth Business Models: An Assessment Tool for Telehealth Business Opportunities in Remote Rural Communities

      Berman, Matthew; Foster, Mark; Frazier, Rosyland (Institute of Social and Economic Research, University of Alaska., 2006)
      The purpose of this report is to provide an overview of when the potentially offsetting considerations favor telehealth investments. To that end, we provide users with a financial template to assist them with the business model question of “how is value delivered to my customer and at what cost?” – assuming that the customer(s) may include a primary care provider, a specialist, an insurance company, a health care system, the entity paying for travel, and patients. The financial template allows users to enter their site specific estimates regarding changes in referral patterns with and without telehealth and the revenues and costs that result from the changes in referral patterns. In addition, we provide a spreadsheet to enable the user to estimate the potential value of patients’ time saved by avoiding travel and the value to patients of reduced wait time in the queue for specialty care. In addition, we provide a number of illustrative business cases primarily designed to show the potential complexity of the inter-relationship of parameters and assist users with understanding how they might use the template to build business cases for their particular circumstance. We also provide several examples of sensitivity analysis to assist users with understanding how they might use the template to develop “break-even” analyses and identify when the changes in referral patterns and case mix might trigger a need for increased staff or result in longer queues.
    • Understanding Alaska: People, Economy, and Resources

      Foster, Mark; Cravez, Pamela; Cole, Terrence (Institute of Social and Economic Research, University of Alaska., 2006)
      Understanding Alaska is a special series of studies by the Institute of Social and Economic Research (ISER), to examine economic development issues and help Alaskans understand how their economy works. The studies began in 2001, and here we highlight some of the work so far. The University of Alaska Foundation has provided most of the funding for Understanding Alaska which examines how Alaska’s economy works, why it’s different from those in other states, and how Alaska’s unique circumstances affect economic development. This publication divides Understanding Alaska research into three categories: People, Economy, and Fisheries. At the end of each section is a list of the full reports or presentations excerpted for this overview. In some cases, we’ve updated information specifically for this publication.