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Consumer Outreach
Alaska Co-op Building Barges
Chartered transport could save money
An Alaska co-op is spending $10 million to build new tugboats and barges to carry diesel fuel under an economic development plan that’s expected to save its consumer-members money.
Alaska Village Electric Cooperative lineman Justin Billings, (right) hitches a ride with a local boat owner to haul a utility pole and other equipment up the Yukon River. (Photo By: Alaska Village Electric Cooperative)
Isolated communities in Alaska depend on diesel fuel for heat, electricity and to power machinery, including most co-op equipment used to generate electricity, as well as boats and snow machines. Almost all of that fuel is delivered by boat, but small shipments are flown in when shortages occur.
“We use more than 5 million gallons of diesel fuel a year, so this has the potential of saving us a lot of money,” said Meera Kohler, president and CEO of Alaska Village Electric Cooperative.
The Anchorage-based distribution co-op serves nearly 7,400 consumer-members in 53 villages, primarily with diesel-fueled generation facilities.
Board members, eager to help the co-op gain more control over its supply chain, authorized construction of two shallow-draft tugboat-barge sets capable of reaching the coastal communities.
But instead of getting into the shipping business, the co-op has inked a five-year contract with a new shipping company that has agreed to charter the vessels. Alaska Village Electric Co-op will be Vitus Marine’s main customer, but the company can compete for other business against three other fuel shippers operating in the region.
The barges also have enough capacity to carry extra fuel, which the shipping company could sell to retail outlets and local governments beginning next year.
“Our savings over five years should top $2.5 million, and fuel costs for generation facilities will be at least 10 cents per gallon less than it’s been in the past,” Kohler said, adding that an additional fuel shipper operating in western Alaska could be good for the region’s economy.
Kohler also said the co-op will be able to use the barges to transport equipment needed for construction and maintenance of its generation sites.
“We now move just about everything we need by barge or small plane,” said Kohler. “Having the option to ship equipment along with our fuel deliveries will help us save time and money on some of our projects.”