Goal 3. Preserve and improve quality of life in the Kenai Peninsula Borough through increased access to local and regional facilities, activities, programs and services. FOCUS AREA: ENERGY AND UTILITIES HEADLINES Enstar Natural Gas Company has contracted with AIX Energy for gas supplies through 2021. The resurgence of independent oil and gas companies in the Cook Inlet Basin is providing new supplies of gas and long-term contracts. Bradley Lake expansion via the Battle Creek diversion will add about 37,300 megawatt hours per year from the hydroelectric facility. The Alaska Energy authority owns Bradley Lake Hydroelectric Project, but contracts with Homer Electric Association (HEA) to operate it. HEA provides electricity to the southern and central portion of the Kenai Peninsula. Ocean Renewable Power Company applied to surrender the preliminary license for a proposed East Foreland tidal energy project in Cook Inlet. FERC granted a preliminary permit in 2011 to conduct a feasibility study for constructing the East Foreland tidal energy project. Tidal energy is viable, but the strength of the conventional energy market in Alaska affects the integration of new technology, making it financially infeasible (Marine Energy 2016). The Borough does not provide utilities but assists in utility provision through its platting authority and by requiring dedication of utility easements on new subdivision plats. Private utility companies, some cities, and the U.S. Public Health Service provide utilities to residents in the borough. Borough subdivision plat review is coordinated with private utilities and cities to ensure easements are adequate to serve future utilities. WHERE HAVE WE BEEN? WHERE ARE WE NOW? WHERE ARE WE HEADED? Energy Homer Electric Association (HEA) provides electricity to the southern and central portion of the Kenai Peninsula, including: Kenai, Soldotna, Nikiski, Homer, Seldovia, Nanwalek and Port Graham. HEA is a partner in the Bradley Lake Hydroelectric Project and receives approximately 12 percent of the project’s electrical output. HEA operates several power generation facilities. They are listed below, along with the electrical output received from each: • Bradley Lake Hydro: 14.8 megawatts (MW) • Nikiski Generation Plant (fueled by natural gas and recovered heat): 80 MW; a steam turbine uses waste heat to create enough steam to produce 18 MW of power without using additional natural gas • Bernice Lake Generation Plant (fueled by natural gas): 80 MW Kenai Peninsula Borough Comprehensive Plan | Final, Adopted November 5, 2019 Goal 3: Energy and Utilities | 129 • Soldotna Generation Plant (fueled by natural gas): 48 MW • Ninety-three member-owned generators interconnected with 34 wind energy installations and 59 solar panel installations produced 216,708 KWhs of electricity in 2016 HEA also provides service to the south side of Kachemak Bay: Halibut Cove, Seldovia, Port Graham, and Nanwalek. A submarine cable crosses Kachemak Bay and comes ashore at McKeon Flats, where overhead power lines transfer power. A generation plant in Seldovia fueled by diesel provides back-up and can generate 2.4 MW of electrical output. Renewable energy is important to reducing the cost of electricity for borough residents and fortifying the power grid for the utilities. Since 2010, some members of HEA have generated electricity through wind and solar installations that in turn have fed into HEA’s grid. HEA was the State’s first utility to adopt net metering standards, which were designed to encourage members to develop renewable energy systems. Chugach Electric Association (CEA) provides service to the eastern Kenai Peninsula, including Cooper Landing, Moose Pass and Hope. CEA operates the Beluga power plant located on the west side of Cook Inlet near Tyonek and produces 381 MW of electricity. Chugach and another utility, Municipal Light and Power, purchased ConocoPhillips’s one-third interest in the Beluga River Unit gas field. Hilcorp owns one third of the West Cook Inlet field and is the operator of the 52 field on behalf of the utilities.49F The City of Seward operates its own electric utility. It purchases electricity from CEA and owns a 12 MW diesel generator for back up. Seward also owns one percent of the output of the Bradley Lake Hydroelectric Project. The City of Seward has an interesting renewable energy project. Seward utilized a grant from the Alaska Energy Authority’s Renewable Energy Fund to install a seawater heat pump system at the Alaska SeaLife Center. Additional funding came from the Denali Commission’s Emerging Energy Technology Grant Program and from local matching funds. The seawater heat pump system supplies space heating to the SeaLife Center and has been operational since 2012 when the fuel oil boilers were shut off. The seawater heat pump system has offset the equivalent of more than 100,000 gallons of diesel fuel. A seawater heat pump renewable energy project is part of the Alaska Energy Authority’s Renewable Energy Fund proposed for FY2019. This project-located in Seward’s tidal zone- would use a ground source heat pump to capture warm subsurface ocean water inundating the gravel. The heat pump would be part of a district loop that provides heat to five public buildings. The heat pump project would displace approximately 20,020 gallons of diesel annually. The natural gas fields on the Kenai Peninsula and west side of Cook Inlet are a resource for cleaner burning fuel and potential lower heating costs. ENSTAR extends natural gas service to portions of the Kenai/Soldotna area, including Sterling and North Kenai. There is a 33- mile natural gas transmission pipeline from the Kenai gas fields to Ninilchik and Happy Valley. The natural gas transmission line was extended in 2013 to Homer, and later a distribution system was built to include Kachemak City. Gas mains were recently extended across the Kenai River to portions of the Funny River area. Covering the cost of extending underground gas lines is challenging. Costs must be offset by density of development and customer demand. 52 Alaska Journal of Commerce. “Utilities purchase share of Beluga gas field. Elwood Brehmer. February 10, 2016. Kenai Peninsula Borough Comprehensive Plan | Final, Adopted November 5, 2019 Goal 3: Energy and Utilities | 130 The Borough has developed guidelines for establishing a Utility Special Assessment District (USAD). These guidelines are found in the Kenai Peninsula Borough Code of Ordinances Chapter 5.35 (KPB 5.35). The USAD is a process for financing the extension of main lines of service of public utilities or of city-owned utilities to areas outside the boundaries of the city. The utilities encompass electric, natural gas, telephone, water and wastewater systems. The allocated cost of the utility extension is assessed to each benefitted property through a special assessment lien. A property owner wanting to bring the utility to their property or neighborhood can initiate the process to implement a USAD. The initiator of the project can coordinate the project on behalf of a group of property owners. Further details can be found in KPB 5.35 Special Assessments- Public Utilities. Water and Sewer Public water and sewer utility service in the borough is concentrated in higher density development areas within the cities of Kenai, Soldotna, Seward, Homer, Kachemak City and Seldovia. These cities operate their own water and sewer utilities to serve residential, commercial and industrial demand. The City of Soldotna, which is experiencing increased residential and commercial growth, completed a wastewater master plan in 2015 and a water master plan in 2016. These water and wastewater master plans complement Soldotna’s comprehensive plan adopted in 2011. Many of the unincorporated communities such as Port Graham, Nanwalek and Tyonek have water and/or sewer systems funded by the U.S. Bureau of Indian Affairs through the Alaska Native Tribal Health Consortium and the State’s Village Safe Water Program. The Department of Environmental Conservation administers the State’s village safe water program. Many of the water and sewer improvements depend on federal funding. Nanwalek received approval in 2016 of a Masterplan Update to replace their water distribution system and solid waste landfill but the projects are pending federal funding. ENERGY AND UTILITIES OBJECTIVES AND STRATEGIES What We’ve Heard The 2005 Comprehensive Plan addressed the need for provision of appropriate utility rights of way and easements through the subdivision plat approval process. However, the link was not established between land development patterns, existing utilities, and the cost of extending utilities to accommodate this development. Future overall satisfaction with services in the borough will entail proactive coordination of land use and extension of utilities. From the June/July 2017 telephone survey of residents, outlined below is a sample of the energy and utility-related issues that can make living in the borough a challenge: Cost of electricity. High utility costs, fuel oil and gasoline. The cost of winter, energy costs. The cost of utilities, some people have $700 electric bills and can’t afford to eat after paying their light bills. Utilities, gas and electric are too high. The amount that we spend on heating costs in the winter. 2017-2018 KPB Comp Plan Survey Participants Kenai Peninsula Borough Comprehensive Plan | Final, Adopted November 5, 2019 Goal 3: Energy and Utilities | 131 Note: “Near-Term” strategy indicates a priority to focus on and/or accomplish in the next three years. Objective A. Encourage coordination of residential, commercial, and industrial development with extension of utilities and other infrastructure. Expansion of natural gas service would reduce heating costs and promote economic development in a number of unserved areas. In most areas, central water and sewer systems are not practical due to low- density development or high cost. 2005 Kenai Peninsula Borough Comprehensive Plan Strategies 1. Near-Term: Maintain existing easements (especially section line easements) in addition to establishing adequate utility rights of way or easements to serve existing and future utility needs.