Up to $6.5 billion for dam

WASILLA — The state agency charged with building a huge new hydroelectric project on the Susitna River will need more money from the state.

Alaska Energy Authority paid a visit to the Greater Wasilla Chamber of Commerce Tuesday, providing a project update before a healthy crowd of roughly 50 chamber members, local lawmakers and guests.

The project’s latest cost estimate is $4.3 billion, according to Wayne Dyok, manager of the Susitna-Watana Hydroelectric Project. But that estimate reflects a range of $3 billion to $6.5 billion. The estimate also doesn’t include the cost of land acquisition or upgrading the existing Railbelt transmission system to take power coming off the project.

Dyok also told the group that, in his personal estimate, the authority will need $2 billion to $3 billion in state appropriations to build the project. The agency expects to ask the Legislature for money next year.

“It is going to take a state investment in this,” he said. “But the state will get its money back.”

Authority officials point to the Kenai Peninsula’s Bradley Lake hydroelectric project, which started in 1991. The state will begin earning revenue in 2022 when bonds financing the project are paid off, they say. The Susitna-Watana project got a little more than $7 million in state money before getting $68 million from the Legislature last year. The state also spent $145 million on an earlier version of the Susitna hydroelectric project before scrapping it in 1986 due to financing difficulties and the low cost of gas-fired electricity.

During a question session, chamber members wondered about the numbers.

“How long is it going to take to pay this off and who is going to pay for it?” asked Wasilla city council member Taffina Katkus.

Typically, Dyok answered, it takes 30 years. He pointed to the state investment as a funding source, as well as power-sales agreements yet to be worked out with Railbelt utilities.

The project, as currently proposed, would construct a 700-foot-tall concrete dam about 50 miles northeast of Talkeetna with a 39-mile-long reservoir. Backers say it could provide stable, long-term energy while satisfying a 2010 state energy policy calling for renewable sources to provide half of Alaska’s electricity by 2025.

Critics say other sources could provide the region’s energy without the potential downsides for the Susitna’s salmon and other resources.

If the project gets federal approval, it could go online in 2023.

Along with the financial update, Dyok described three routes for an access road and transmission lines to the dam site being reviewed by transportation officials. The shortest, about 40 miles, would cut south from Cantwell. The other two would follow the Chulitna or Gold Creek corridors.

Fisheries biologists are already raising concerns that even such a prolonged process won’t allow enough time to research risks to salmon from dam-caused changes like less ice cover and unpredictable river flow levels.

Mat-Su Borough Mayor Larry DeVilbiss, however, expressed his appreciation to Dyok. DeVilbiss said members of the borough’s fish and wildlife commission indicated the authority’s team has been “very responsive” to their questions and study requests.

The Federal Energy Regulatory Commission will host a series of scoping meetings later this month on the Susitna-Watana Hydroelectric Project. The commission, charged with licensing review, wants the public to help identify relevant issues and reasonable alternatives to be considered in the project’s study planning and Environmental Impact Statement processes.

• March 26, Anchorage: Z.J. Loussac Library, 6 to 10 p.m.

• March 27, Anchorage: Z.J. Loussac Library, 9 a.m. to 2 p.m.

• March 27, Wasilla: Curtis D. Menard Memorial Sports Center, 6 to 10 p.m.

• March 28, Talkeetna: Su-Valley Jr./Sr. High School, 6 to 10 p.m.

• March 28, Glennallen: Caribou Cafe Banquet Room, 6 to 10 p.m.

• March 29, Fairbanks: Westmark Hotel, 6 to 9 p.m.

• March 29, Cantwell: Cantwell Community Hall, 6 to 10 p.m.