Investigating impacts of electricity rates on residential home heating in Southeast Alaska
ACEP summer intern Bennett Pearce tours the 8.5-MW Houston Solar Farm in Houston, Alaska, where an agrivoltaics project is taking place. Agrivoltaics is the use of solar panels in agricultural settings to produce both food and electricity.
September 26, 2025
Residents in many remote communities in Alaska heavily rely on imported fuel oil to heat their homes. Heat pumps are increasingly gaining attention as a promising alternative to fuel oil systems but high costs of electricity to run heat pumps often cancel the benefits to residents.
Kake, a community of about 600 people located on the western side of Kupreanof Island in Southeast Alaska, is no exception.
This summer, ACEP intern Bennett Pearce, under the mentorship of Shivani Mathur Bhagat, revised Kake鈥檚 economic analysis of the report Bhagat and other ACEP researchers wrote in 2021, in an attempt to reassess the findings with more recent electricity generation, load and cost data.
The 2021 ACEP report outlined a rate structure for residential heat pumps aimed to reduce the community鈥檚 heating costs and their reliance on heating fuel and to lower electricity rates all at once. The , a nonprofit that provides electricity to Kake and other Southeast Alaska communities, adopted the new rate, based on the ACEP analysis. The new rate reduces the electricity rates for customers with a heat pump once they exceed the limit set by Alaska鈥檚 program to avoid a sharp increase in heating costs.
While PCE is designed to make power costs more manageable for rural consumers, the energy used by the residential heat pumps often exceeds the 750-kilowatt-hour monthly household limit to qualify for PCE.
Pearce鈥檚 project was to incorporate new data sources into the analysis, including power data from the Gunnuk Creek hydro plant, a run-of-the-river hydroelectric project in Kake, and heat pump usage data from Kake and other coastal communities in Alaska and to explore the impact of unique home heating methods.
The results from the summer鈥檚 work point to a few key findings. Data from heat pumps in Kake shows that users are only partially relying on them for home heating, which differs from the original assumptions of the analysis. Heat pumps are still a new addition to home heating for many Alaskans, and predicting how they will be used can be challenging. The proposed incentive rate structure still maintains the benefits to customers and the utility, even accounting for different home heating systems.
ACEP summer intern Bennett Pearce passes 鈥淭he Perch,鈥 four miles from the finish of the challenging 2025 Crow Pass Crossing trail running race in Eagle River in Anchorage, Alaska, finishing eighth in the men鈥檚 division.
Pearce and Bhagat hope the new analysis will provide IPEC with insights about the impacts of the existing heat pump rate structure. If it is effective, insights about the rate structure can be applied to other rural communities in Alaska.
Throughout his internship, Pearce developed data processing and analysis skills using Python and Excel and learned to navigate data maintained by the .
A recent graduate from California Polytechnic State University in San Luis Obispo, where he studied general engineering, Pearce enjoyed working at ACEP during summer.
鈥淚t鈥檚 been a great environment to learn and apply technical skills to help people across Alaska,鈥 he said.
鈥淚t鈥檚 really clear that ACEP is dedicated to finding energy solutions that work for the people of Alaska,鈥 said Pearce, who worked as an aide during the 2025 Alaska Legislative Session and as an intern with the in Anchorage previously.
鈥淭hat鈥檚 exciting to be a part of,鈥 he said.
This project was part of the program鈥檚 Innovation Network, an initiative supported by the Office of Naval Research. The project was part of the ACEP Undergraduate Summer Internship program. View the on ACEP鈥檚 YouTube channel. For more information on this project, contact Shivani Bhagat at smbhagat@alaska.edu.