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In Juneau, electricity is inexpensive

Gold was not the only thing extracted from Gold Creek when Juneau became a mining town in the late 1800’s. In 1893, an electric generator attached to a water wheel was placed in Gold Creek, thus marking the beginnings of Alaska Electric Light & Power.

 

This act 121 years ago continues to impact every single person living in Juneau today, because along with efforts made to acquire the gold came the even more impressive effort to create energy sources to power our city’s mines. While the original gold mines are gone, the electrical legacy they left behind means we get cheap (yes, cheap) power more than a century later.

 

We live in paradise, but we pay a price to do so. The cost of living here is one-third higher than the average U.S. city. Prices are higher across the board: food, housing, healthcare, and transportation. A single banana will cost you 44 percent more here than in the “average” city. These statistics will not surprise you. What might surprise you is that there is one item for which we don’t pay more, and that is electricity.

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This chart compares the cost of living in Juneau by expense area to National Average. Source: C2ER (via JEDC) and Energy Information Administration. Analysis by Rain Coast Data.

Juneau’s electricity rate of 11 cents per kilowatt-hour is equivalent to the average U.S. rate, and is the eigth lowest among Alaska’s 185 communities with electrical rates.

 

How is this even possible? We are landlocked, construction costs are high, energy sources in remote areas have to be developed and connected to town using underwater cables. We say we can’t even build affordable houses in our community, yet energy development happens in impossible terrain. Based on everything we know about our costs here, energy is the No. 1 item for which we should expect to pay the most, and yet comparatively, we pay the least.

 

Part of the answer is history. Finding quality sources of low-cost energy was the top priority of those who ran the early mines in Juneau. The mines wanted a source of energy that would be cheap in the long term — even if it meant substantial capital costs. If you really want to be impressed, read about the development of the Salmon Creek and Annex Creek dams built between 1914 and 1916 (and still powering our town today). At the time, Juneau led the entire world in energy innovation and technology. The power grid and electrical resources established then were state-of-the-art and rivaled those of much more sophisticated, highly populated cities.

 

History, of course, only takes us so far. We got a good head start, but AEL&P continued to innovate and be forward thinking during all of its 121 years to a degree that is unmatched by anyone else in the private or public sector throughout Juneau’s history. The relatively new $78.5 million Lake Dorothy Hydroelectric Project — requiring an enormously complicated lake tap — means Juneau uses 100 percent renewable energy resources. Yet somehow AEL&P managed to make these investments while keeping the costs low for us.

 

What is the price tag of our energy savings? If our electricity costs were equal to our overall cost of living rate (32 percent higher), Juneau homes, businesses, and government would pay an additional $14 million per year in electricity costs. If we had to pay the average Alaska rate of 50 cents (non-weighted average), our costs would be $156 million more per year. Juneau would look very different if that were the case. There would be fewer businesses and public services, and all of the other costs of living would be driven up even higher.

 

AEL&P has been owned by the local Corbus family for 118 years, and it is Juneau’s oldest local business. The contributions that this family and this company have made to our community during the last 100-plus years are staggering, and not always fully appreciated or understood.

 

In July, the sale of AEL&P to Washington-based Avista Utilities will be finalized. As a lover of our community, our history, and our economic wellbeing, I wanted to take this moment to pay tribute to the outstanding economic leadership and community stewardship that AEL&P has provided for Juneau. Thank you Corbus family and AEL&P. I expect we will continue to be indebted to you for the next 100 years as well.

 

• Meilani Schijvens, a lifelong Juneauite, is the owner of Rain Coast Data and authors a monthly column by the same name. She has 20 years of professional and academic experience in the fields of economics, transportation and natural resources relating to Southeast Alaska.