On July 25 Alaska Gov. Sean Parnell announced the start of work on a $4.5 billion project to build a 600-megawatt hydroelectric power plant at Watana on the upper Susitna River. Earlier this year the Alaska Legislature passed legislation authorizing the Alaska Energy Authority to pursue the Susitna project and the Legislature allocated $66 million from the state’s capital budget for initial project work.
“It’s one of those moments where we’re drawing a line in the sand and we’re saying we’re at the starting point and we’re moving,” Parnell said in announcing the start of the work program. AEA is in the process of hiring the members of its core project team; the agency is preparing a notice of intent for submission to the Federal Energy Regulatory Commission; and drilling started today at the planned dam site to gather necessary geologic information, he said.
Major power source
The new hydropower system will become a major source of electrical power for the Alaska Railbelt, the region extending from the southern Kenai Peninsula north to the Fairbanks area in the Alaska interior. The power plant, to be located in remote territory on the south side of the Alaska Range, will hook into the Railbelt grid through a power transmission intertie that connects Fairbanks with Anchorage and the Matanuska and Susitna valleys.
The idea of building a major hydropower system on the upper Susitna River first emerged in the 1980s but subsequently came to naught when falling oil prices undermined the project economics. In late 2010, after conducting studies into the future needs of the aging Alaska Railbelt electrical grid, the Alaska Energy Authority recommended moving forward with a scaled down version of the 1980s Susitna concept.
By supplying electricity in sufficient quantity to meet around 50 percent of the Southcentral Alaska power demand, the state sees the Susitna-Watana hydropower system as a major contributor to achieving a statewide goal of obtaining 50 percent of power from renewable sources by 2025.
And Parnell compared the start of the project to being at the first tee on a golf course.
“We’ve studied this course a long time … but it’s time to smack the ball down the fairway,” he said. “It’s time to commit. We’re done studying whether to do this project. We’re committed to moving it forward.”
2023 startup
The permitting and FERC licensing of the hydropower system are currently expected to take about six years, with five years of subsequent construction work leading to a startup of the power plant in 2023, Parnell said. However, the state is seeking ways of shortening that timeframe without jeopardizing the quality of the end result, he said.
The initial state appropriation of $66 million will see the project part way through the process of obtaining a FERC license and of obtaining permits for the facility construction, said Sara Fisher-Goad, AEA executive director. There will be a need for further discussions with the governor and state legislators over subsequent project funding, she said.
AEA has suggested that the Susitna project could ultimately be funded along the same lines as the funding of the successful Bradley Lake hydropower project, built in the 1980s and 1990s in the southern Kenai Peninsula. The state paid half the cost of Bradley Lake, with power utilities buying power from the facility and paying for bond financing, operation and management. Once bonds used for part of the project financing have been paid off, the state can recoup its investment by receiving payments from the utilities.
Thanks to the planned use of modern dam construction methods, the $4.5 billion dollar price tag for the project represents a significant price drop from cost estimates based on the 1980s studies, said Bryan Carey, AEA project manager. However, the AEA team is looking at a couple of other construction methods that might reduce the cost still further, Carey said.
Abundant energy
Parnell said that, with the Susitna power plant only meeting half the power demand in Southcentral, the hydropower system will not render moot alternative energy sources such as natural gas through a pipeline from the North Slope. In fact, having abundant energy in the Railbelt region from various sources will create more opportunities for Railbelt businesses and residents, he said.
Hugh Short, chairman of the AEA and Alaska Industrial Development and Export Authority board, said that the board is ensuring public involvement in the Susitna project through a project website, community meetings and outreach to the state legislature.
Fisher-Goad said that AEA has answered an extensive series of questions posed by the Talkeetna Community Council about the project — the town of Talkeetna lies southwest of the planned dam site. The project team will hold a public meeting with FERC representatives in the Talkeetna area on Aug. 29, she said.
Sen. Charlie Huggins, R-Wasilla, a project proponent, said that meetings had been scheduled in the Talkeetna and Trapper Creek area, and that the five- to six-year FERC licensing process would also involve the gathering of public comments on the project.
Meantime AEA has put “frequently asked questions” and other information about the project on the project website at susitna-watanahydro.org.
—Alan Bailey
