old, cold ground in the valleys along the Nenana River at Healy contains the hot, hot heat that powers 45 percent of electricity in the Interior. Usibelli Coal Mine has been digging in the dirt since 1943 for the energy resource that warms the region. The state’s only operating coal mine produces approximately 1 million tons of fossil fuel annually. About 35 percent is burned at two nearby power plants while the remainder is transported by the Alaska Railroad to Fairbanks-area power plants operated by Golden Valley Electric Association and Aurora Energy.

Usibelli Coal Mine commissioned McKinley Research Group to analyze the economic impact of coal in the Interior. The report—based on public information, data from Usibelli Coal Mine, and direct interviews—finds that mining in Healy supported $54.6 million in wages statewide, with 568 people employed at the mine itself in 2023.

Thanks to the energy density of the combustible rock, coal is a lower-cost source of electricity compared to naphtha or diesel; in 2023, Golden Valley Electric Association averaged $0.07 per kilowatt hour for coal-fired electricity compared to $0.36 for diesel. Yet the region’s residents pay rates more than one and a half times higher than the national average, and the greater need for light and heat in the winter drives the annual energy cost burden to three times the national average.

Coal has the advantage, though, of being stockpiled year-round, assuring utility managers of a stable fuel supply. And the report concludes that shifting away from coal would result in higher electricity prices for the Interior.

This month’s edition of Alaska Trends excavates some more nuggets from that report, showing what powers the Interior grid, how prices compare geographically and among heating fuels, and how the Fairbanks area stays warm.