The coincident generation of electricity and district heating for use in medium- and high-density communities has been a success story over this century in the United States. While costs of construction for cogeneration systems are relatively high, municipalities can and have organised and obtained funds for construction of systems that provide stable sources of cogenerated electricity and heat energy for long periods. A recent development at the Alaskan statewide level is the "railbelt electrical intertie", which will link electric generation and distribution to customers throughout south central and interior Alaska. For the first time, mine-mouth coal-fired generation, natural gas/oil-fired gas turbines, and hydro-power energy are available throughout the central and south central areas of Alaska. Just how this new intertie energy source, which is inexpensive but subject to interruption and availability, will affect the economics of the City of Fairbanks district heating system is the subject of this paper.

KEYWORDS: year 1996, district heating, cogeneration, electricity production, USA, economics