State prefers Susitna project

PALMER — The state has endorsed the Susitna hydroelectric project over a couple of comparable projects and the Mat-Su Valley’s electric company is right on board.

“Absolutely, and not only that, but we lobbied for it,” said Matanuska Electric Association board member Larry DeVilbiss.

The Legislature allocated funds earlier this year to look at the Susitna project and two others — the project at Lake Chakachamna near Mount Spur and the Glacier Fork project on the Knik River. The Alaska Energy Authority released a report last week stating that the agency’s preference is for Susitna.

“Overall, the Susitna Project would have a relatively lower cost of energy, fewer likely environmental effects, could start sooner, a reduced licensing/permitting schedule, less construction and long-term operational risk and greater positive impacts on the Alaskan economy than the Chakachamna Project,” the report states in its executive summary.

Gov. Sean Parnell, in a press release, said the project is also better than Glacier Fork.

“Governor Parnell also announced he will propose legislation that will allow AEA to pursue funding for and ownership of the project,” according to the press release.

For DeVilbiss and his colleagues on the MEA board, a big hydroelectric project is something they pushed for over the course of most of last year.

“We got together with all of the other Railbelt utilities and tried to encourage the state to get behind either Susitna or Chakachamna,” he said.

In light of the news from AEA and the governor’s office, DeVilbiss said that MEA’s role now is one of advocacy and — since a hydroelectric project of this magnitude is not something any of the utilities can take on single-handedly — building coalitions with the other utilities.

“I think we’ve done that,” DeVilbiss said.

A group of utilities that includes MEA has put together an idea for a Railbelt cooperative that would handle power generation and transmission. That cooperative would make electricity and take care of the big power lines. The existing cooperatives would then be in the distribution business — getting power from those main lines to individual customers.

The dam on the Susitna is an old idea, one talked about since the 1970s.

“It’s kind of resurrected here when it became apparent that we were running into some dead ends on natural resources that we weren’t allowed to use and natural resources that were running out,” DeVilbiss said.

The resource he referred to as one the utilities weren’t allowed to use was coal. DeVilbiss is one of the few MEA board members remaining from a one-time board majority that favored building a coal-fired plant somewhere in the Valley. That majority has since shifted to one that opposes coal and the idea of a coal plant has essentially died.

The Cook Inlet gas fields that fuel Southcentral power plants are aging and producing less gas every year, which is causing a lot of worry at MEA and other utilities. The coming shortages are something MEA general manager Joe Griffith warns about at every opportunity.

A state Department of Natural Resources Division of Oil and Gas review completed in 2009 says Cook Inlet contains more than a 10-year supply of natural gas. But according to a second report commissioned by ENSTAR Natural Gas Co., Chugach Electric Association and Anchorage Municipal Light and Power, Cook Inlet producers will need to invest $2.8 billion to bring that gas to market.

The state also has lots of gas on the North Slope but no way — yet — to deliver it to Southcentral.

But the dam is, in even the most optimistic of projections, something Railbelt utilities are looking at for the long term. In the short term, MEA still has to find a way to produce energy for its customers when its contract with Chugach Electric Association runs out.

“Our existing supply of electricity runs out in 2014 and if everything goes smooth we’re not going to see anything out of Susitna until 2025,” DeVilbiss said.

So MEA is still moving ahead with plans for a natural gas plant in Eklutna.

“There’s no other choice,” DeVilbiss said. “We’ve been backed into a corner, but we’re trying to do it in incremental stages that will allow us to efficiently absorb anything cheaper that might come along.”

Which is to say the gas plant will be composed of multiple smaller generators that can be ramped up or ramped down as needed without causing a disruption, if running them proves more expensive than buying power from the dam.

The Susitna Project, at least the version of it that the state endorsed, calls for one dam instead of two as was proposed in the 1970s. It’s also a shorter dam. The original plan called for a 885-foot high dam. This one calls for a 700-foot high dam.

Power lines from the dam would connect to the state’s grid with the Alaska Intertie — the big lines that connect Anchorage and Fairbanks.

The dam would create a 39-mile long reservoir that is a maximum of two-miles wide. The hydroelectric plant would be 600 megawatts in size and would therefore be able, by itself, to meet the state’s goal of having 50 percent of its power come from renewable sources by 2025; a goal set by then-governor Sarah Palin in 2009.

The dam would be at river mile 184 in an area called Watana. The AEA report says that, in terms of environmental impacts, fish are what the state worries about most, but that most salmon in the area tend to spawn in tributaries outside of the affected area. Devil’s Canyon, downstream from the site, tends to be a natural barrier to salmon swimming upstream, the report states. The reservoir would encompass 15 miles of tributaries and eight small lakes. But Arctic grayling, not salmon, are the dominant species there.

In terms of dollars and cents, the Susitna project carries a $4.5 billion price tag, compared to Chakachamna’s $2.9 billion. Susitna would also produce double the energy. Power coming from Susitna would cost $.06 per kilowatt hour, which is more or less comparable to current costs. Chakachamna would cost $.09-$.12.

In the end, though, neither Chakachamna nor Susitna will happen without an infusion of cash.

“Project financing for either project, where the costs of the project is paid for solely by the sale of power produced from the project, is assumed to be unavailable. Without state participation these project are unlikely to proceed,” AEA reports.

Contact Andrew Wellner at andrew.wellner@frontiersman.com or 352-2270.