ALASKA VILLAGE ELECTRIC COOPERATIVE Energizing Rural Alaska since 1968 The challenges of providing power in rural alaska Bia providers conference November 29, 2018 Meera Kohler, President/CEO Alaska Village Electric Cooperative

Alaska Village Electric Cooperative Member owned, not-for-profit 58 Alaska communities 90 full time employees 95 village plant operators 11,400 services 48 power plants 8.5 million gallons of diesel 36 wind turbines serving 20 villages 2 Solar PV projects Two tug and barge sets

Electricity in rural Alaska is expensive – why? Small population – AVEC's average village is ~400 Small loads – AVEC's average village load is ~140 kW No economies of scale. Expensive power = less consumption Utilities are capital intensive. $17,000 per meter in the village Remote and difficult to access. Shipping costs $1.75/pound Fuel is expensive – delivery and storage often exceeds diesel cost Operations and maintenance is more expensive

AVEC’s Challenges AVEC rates are high – 50 cents +/- Residential/community facilities subsidized by state PCE Program Non fuel costs ~25 cents a kWh, rest is diesel fuel In dense communities (Bethel, 6,300) non-fuel costs ~6 cents a kWh Average village consumption 1,300 mWh No electric heat Heat and transportation need expensive petroleum fuels Economies are mostly non-cash, subsistence dependent 5

How AVEC tackles the challenges Pursuing efficiencies Connecting communities Adding communities Developing technical resources Innovating solutions Optimizing our people Developing partnerships that will lead to a sustainable, self-sufficient vibrant rural Alaska 13 6

State of the Art Metering 11,000 Smart Meters at all locations (none are pre-pay) Meters are capable of two way communication Meters can be remotely (from HQ) connected and disconnected All meters send reads on demand at end of monthly billing period Reads are automatically entered into billing system Bills go out within three working days of month-end Collections are 99.5+% of total billings Non-pay disconnects April – October although winter disconnects not precluded 7

AVEC strategies to reduce power cost Add cost-effective new communities Interconnect villages to improve economies of scale Improve generator efficiency whenever possible Add renewables where economically feasible Capture and sell recovered heat, excess wind energy

Since 2003, AVEC has been reducing the cost of living in rural Alaska by using renewables

AVEC has 11 Wind Farms Community Pop. mWh Sales Average kW load kW Wind Installed Wind Percent Selawik 876 2,700 325 260 2.23% Kasigluk +1 1,163 2,900 348 300 18.86% Toksook Bay +2 1,288 3,300 401 400 19.27% Hooper Bay 1,178 3,200 386 15.88% Savoonga 718 2,300 265 200 7.74% Gambell 713 1,800 223 34.07% Chevak 989 2,400 288 28.86% Mekoryuk 210 800 106 13.86% Quinhagak 724 2,000 248 31.27% Shaktoolik 282 1,000 120 36.69% Emmonak +1 1,571 4,400 542 AVEC has had some sites with significant wind penetration to date 10

We are installing larger wind turbines 900 kW EWT machines installed October 2018 in Bethel (average load 4,500 kW) St. Mary’s/Mt. Village (average load 570 kW) Also planned for Stebbins/St. Michael (average load 370 kW) We are partnering with Alaska Center for Energy and Power, the Office of Naval Research and others to develop high rate-short term storage to optimize intermittent energy production in islanded micro-grids such as ours. We are connecting communities to bring efficiencies and develop local, regional and, eventually, statewide grids. 11

With collaboration, all things are possible! Meera Kohler Alaska Village Electric Cooperative 12