Matanuska Electric Association entered into a joint resolution with Chugach Electric Association and the City of Seward supporting the governor's proposed Greater Railbelt Energy and Transmission Corporation (GRETC), that would consolidate the generation and transmission assets of the six utilities serving the region.

The goal of the united power generation component is to provide a reliable and sustainable power source for each of the Railbelt utilities at the lowest cost to the consumer.

MEA's interim general manager, Joe Griffith, and board president, Lois Lester, signed the agreement Nov. 17, committing the utilities support of legislation originally introduced by then-Gov. Sarah Palin. The legislation, House Bill 182 and Senate Bill 143, would establish the new power generation corporation.

Joe Balash, who works on energy issues for Gov. Sean Parnell, said the governor supports the utilities working together for reliable, reasonable and affordable power.

"If your cost of energy is spiking, the likelihood you're going to attract any new business is pretty low," Balash said. "If the utilities want the state to help (with new infrastructure), then from a public interest standpoint we are going to demand it be done in the most efficient manner possible."

Parnell emphasized the importance of cooperation among the Railbelt utilities to the future of energy production in the state.

"Affordable and reliable power is a fundamental building block for economic growth," Parnell said in a written statement. "Cooperation and joint planning is essential for economic growth. I look forward to working with utilities that are ready to roll up their sleeves and work together."

MEA spokeswoman Lorali Carter said the utility supports unifying the transmission and generation functions of Railbelt utilities, building on economies of scale that she said would benefit members. The GRETC proposal, already before the Legislature, is a logical starting place.

But each utility has different circumstances and needs, and the corporation as laid out in the pending bill may not fit for all six, she acknowledged.

"I think the companies are committed to cooperating and participating as much as possible, but at the end of the day, MEA is looking out for MEA first," Carter said. "It's going to be the same situation for everybody else, looking out for their own rate payers."

Supporters of unified power generation say it is important because the supply of cheap and abundant natural gas in the Railbelt is dwindling. With 90 percent of the region's electricity generated by natural gas the best move to provide affordable electricity is to cooperate with each other for the shrinking gas supply, rather then competing and driving up gas costs.

Making the move toward a large single power generation site is far too expensive for any single electric utility to make by itself, said Carter, so it must be done jointly.

"In our opinion, the more the merrier," Carter said. "We are an enormous geographic region, from Homer all the way up to Fairbanks, but we really don't have that many rate payers. Our cost for infrastructure is spread out over a smaller group of people than, say, in the Lower 48."

Right now, not all the Railbelt utilities support the legislation. Homer Electric Association, which supplies power to most of the Kenai Peninsula, has not taken a position on the legislation.

Anchorage's Municipal Light and Power, which is owned by the city, has access to federal bonds and funding that other utilities don't.

Golden Valley Electric Association, which serves Fairbanks, already has invested in power generation upgrades that will supply their demand for the next 15 years.

GVEA executive director Brian Newton said until new transmission lines are strung the 350-plus miles between Southcentral and Fairbanks, GVEA is unlikely to fold itself into a Railbelt corporation.

"We work together; we probably have never worked together better than right now," Newton said of the six. "It's just sometimes hard to work on combined projects ... Everybody's still got to look out for their own needs."

If the bill fails to gain momentum during the 2010 session, Carter said MEA and its partners would be interested in going back to the drawing board, without the state taking a leadership role, and redrafting a way to work together.

In a September interview with the Alaska Star, MEA's Griffith said, "Maybe I'm too optimistic and maybe I'm being arrogant, but we (the Railbelt utilities) need to realize that not a single one of us is big enough to find a solution on our own, we have to work together to get things done."

The signing of the resolution with Chugach and the City of Seward are what he hopes are the first steps toward developing a united power generation entity.

Reach the reporter at darrell.breese.@alaskastar.com.