Investigating impacts of electricity rates on residential home heating in Southeast Ӱpro
ACEP summer intern Bennett Pearce tours the 8.5-MW Houston Solar Farm in Houston, Ӱpro, 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 Ӱpro 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 Ӱpro, is no exception.
This summer, ACEP intern Bennett Pearce, under the mentorship of Shivani Mathur Bhagat, revised Kake’s 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’s 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 Ӱpro 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 Ӱpro’s 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’s 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 Ӱpro and to explore the impact of unique home heating methods.
The results from the summer’s 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 Ӱprons, 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 “The Perch,” four miles from the finish of the challenging 2025 Crow Pass Crossing trail running race in Eagle River in Anchorage, Ӱpro, finishing eighth in the men’s 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 Ӱpro.
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.
“It’s been a great environment to learn and apply technical skills to help people across Ӱpro,” he said.
“It’s really clear that ACEP is dedicated to finding energy solutions that work for the people of Ӱpro,” said Pearce, who worked as an aide during the 2025 Ӱpro Legislative Session and as an intern with the in Anchorage previously.
“That’s exciting to be a part of,” he said.
This project was part of the program’s 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’s YouTube channel. For more information on this project, contact Shivani Bhagat at smbhagat@alaska.edu.