The sound of Kodiak’s electricity costs going up is coming from truck-sized, yellow Caterpillar generators as they burn diesel at a local powerplant. Kodiak Electric Association, the utility cooperative, operates three powerplants with diesel generators on the Kodiak road system. But the main one is on East Marine Way across from a popular sushi restaurant formerly known as the powerhouse. The others are located at Swampy Acres and on Coast Guard Base Kodiak.
According to the utility’s CEO and President, Dan Menth, the main facility started running three of its four on-site diesel generators 24 hours a day, seven days a week, on Sunday morning, Oct. 18. He said that powerplant alone uses roughly a thousand gallons of diesel per hour.
“When we're running all three, I mean, around the clock, you got....You might be pushing 18,000 to 20,000 gallons a day over a 24-hour period," Menth said.
And as of Oct. 21, at current diesel fuel prices, it will cost the electric association at least $122,000 per day.
Menth said this is a temporary but necessary cost because the association can’t put as much strain on its hydropower facility – Terror Lake. The water levels in the lake, which is in the interior of the island southwest of the city, are below ideal range according to Menth.
“It would be good, ideal to end the year, Dec. 31, at approximately a lake level between 1,390 [feet] and 1,400 [feet]," he said. "As of today we’re sitting around 1,368 [feet]."
Menth said the last time the lake was this low going into the end of the year was in 2019.
"We ended the year around 1,375 [feet] elevation. It took four years for us to fill the lake back up," he said.
Several factors came together in a “perfect storm” to reduce the water in the lake to this point, including what Menth calls one of the worst snowpack years at Terror Lake they’ve ever recorded. The lake has also received less rain than average over the last year, wind power has not been as consistent with one wind turbine still offline, and runoff water into the lake stopped flowing more than a month earlier than usual.
For now, the association is relying on the Kodiak powerplant’s three diesel generators together to produce more than half of the load Kodiak needs this time of year, according to Menth. The rest of the community's electricity will still come from a reduced amount of hydropower at Terror Lake and wind power from the five working turbines on Pillar Mountain, sitting just above town.
Menth said he’d rather not rely on diesel right now, but that system was kept as a redundancy to still provide electricity to the community if the utility can’t rely on Terror Lake.
“Even when fuel prices are low, we don't want to be burning diesel. But now, especially with the costs where they're at, avoiding any diesel usage is critical," he said.
The association uses a specific financial charge called the Cost of Power Adjustment or COPA to adjust for rising diesel costs. Any electricity residents use this month will be charged two cents per kilowatt hour on their next montly bills according to KEA, which is a 1,900% increase from the previous rate of $.001 per kilowatt hour.
Menth said the slight rate increase won’t show up on residents’ electric bills until November. But it’s still unclear how long the association will need to burn diesel.
According to Menth, the Kodiak plant will run two to three diesel generators 24/7 until Oct. 25 and then reevaluate the water level at Terror Lake before deciding to run them for another week, or potentially longer.
