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March 2010

Vol. 15, No. 11 Week of March 14, 2010

Kenai Hydro suspends activity on project

Reorganized Homer Electric venture tells FERC it needs timeout on proposal to harness Grant Lake, Falls Creek to make power

Wesley Loy

For Petroleum News

Progress on a proposed Alaska hydroelectric project near Moose Pass north of Seward appears to be slowing down, at least for now.

The project developer, Kenai Hydro LLC, told the Federal Energy Regulatory Commission in a Feb. 8 filing the company is “suspending major activities to consider how best to proceed with its schedule and scope of work given its financial constraints and reorganization.”

Kenai Hydro has been studying a relatively small hydroelectric project involving Grant Lake and Falls Creek. The project would generate 4.5 megawatts, compared to peak power supply of 90 megawatts on the Homer Electric Association system.

Homer Electric is the parent company of Kenai Hydro.

Previously, Kenai Hydro had an additional owner in Wind Energy Alaska LLC, which was co-owned by Cook Inlet Region Inc. and enXco Inc., a California renewable energy firm.

Homer Electric “is now the sole owner” of Kenai Hydro, according to a nonprofit organization opposed to the Moose Pass project. State corporate registration records confirm that.

A representative of Homer Electric told Petroleum News on March 10 only one person at the co-op, Joe Gallagher, was authorized to talk about Kenai Hydro’s status, and he was traveling and unavailable to comment in time for this article.

The project

The opposing nonprofit, Friends of Cooper Landing, believes the hydro project is a threat to the downstream Kenai River, which is famous for its salmon fishing.

The group said in a March 2 update it believes Kenai Hydro might continue studies on the project should it obtain additional state grant money.

Homer Electric is eager to diversify its energy supply. The co-op currently buys all its power wholesale from Anchorage-based Chugach Electric Association.

That contract expires at the end of 2013, and Homer Electric aims to be a generator of power from natural gas or alternatives by then.

Kenai Hydro’s project is centered on Grant Lake, a 1,664-acre, L-shaped mountain lake just east of the Seward Highway near the Moose Pass community.

Kenai Hydro proposes to withdraw water from the lake and send it down a 2,800-foot horseshoe tunnel to a powerhouse.

To raise the lake level to provide more water for power generation, Kenai Hydro would build a concrete dam about 10 feet high and 120 feet wide at the lake’s only outlet.

Additional water would be diverted from nearby Falls Creek into the lake via a 13,000-foot pipe.

A FERC license would be required for the project, the cost estimates for which range from $30 million to $40 million.

Construction would take 30 to 36 months after issuance of the FERC license, Kenai Hydro has said.






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