Alaskan crisis demonstrates pocketbook power.
Michael T. Burr is Fortnightly’s editor-in-chief. Email him at burr@pur.com.
A series of avalanches thundered down the sides of coastal mountains near Juneau, Alaska, early in the morning on April 16. No people were hurt—not directly. But the avalanches took out several transmission towers that carried electricity from the Snettisham hydroelectric dam, cutting Juneau off from its primary source of power.
The resulting crisis turned into an instructive experiment for Alaska Electric Light & Power Co.—Juneau’s privately held utility—as well as the industry in general. Namely, it showed that consumers can and will take extreme measures to reduce their power consumption when electricity rates go through the roof.
More interestingly, though, it showed that consumption won’t necessarily spring back to normal when rates come back down.
Elasticity Experiment
Like many cities and towns in rugged and sparsely populated Alaska, Juneau’s power grid is an isolated system. Fortunately AEL&P had anticipated it might get cut off from the Snettisham plant someday. So when the avalanche fell in April, the company fired up the fleet of diesel generators it keeps on standby, averting a power crisis that could have crippled Alaska’s capital city.
That doesn’t mean, however, that all was well in Juneau. Burning $3.50-a-gallon diesel fuel to serve the electricity appetite of 31,000 residents (about 1,000 MWh on April 15) caused a secondary crisis in the city—a financial one.