Providing coverage of Alaska and northern Canada's oil and gas industry
August 2017

Vol. 22, No. 34 Week of August 20, 2017

AEA authorizes Battle Creek diversion

Modification to Bradley Lake hydropower facility on Kenai Peninsula expected to add 10 percent to power production capacity

Alan Bailey

Petroleum News

During its Aug. 10 meeting the board of the Alaska Energy Authority passed a resolution approving the development and financing of the Battle Creek diversion project, a project designed to increase the power output from the Bradley Lake hydropower facility in the southern Kenai Peninsula. Meltwater from the Battle Glacier in the mountains at the southern end of the peninsula flows down Battle Creek. By diverting some of this water into Bradley Lake it will be possible to raise the level of the lake and thus place more energy behind the Bradley Lake dam, Kirk Warren, AEA chief operating officer, explained to Petroleum News. The result will be an approximately 10 percent increase in the power production capacity of the Bradley Lake powerhouse.

The cost of this power will be close to the lowest in the Railbelt, and will become lower later in the project’s life, Warren said.

“It’s 100 years of stably priced, low cost power for the Railbelt, without all of the risk and uncertainty and vulnerability associated with other sources of fuel,” said Katie Conway, AEA government relations and outreach efficiency manager.

Warren commented that the stability and predictability of the cost of power from Bradley Lake renders planning decisions for the Railbelt power system easier to make.

“They know what that cost of energy is going to be not only five years from now but 10 years from now and 20 years from now,” Warren said.

Preparing for bids

Design and engineering work for the project has already been carried out and the focus now is on preparing the plans to be ready for construction bids. Construction costs are estimated at about $46 million. AEA is looking at several possible funding options for the work but hopes to cover most of the costs through the issue of New Clean Renewable Energy Bonds, a form of low-cost bonding designed to finance renewable, clean energy projects administered by the Internal Revenue Service. Bonds would be paid off using revenues from power sales from the hydropower facility.

Funding to date on the Battle Creek diversion project has come from the state and from the Railbelt electricity utilities. The state has contributed $3 million from an AEA grant to the Alaska Railbelt Cooperative Transmission and Electric Co. and $500,000 in the form of an AEA Renewable Energy Fund grant. Four utilities, Chugach Electric Association, Matanuska Electric Association, the City of Seward and Homer Electric Association, have contributed $1.2 million in funding. An additional $1.17 million has come from the Bradley Lake Renewal and Contingency Fund, a fund to which all Bradley Lake participants contribute.

Warren said that work in clearing the roadway required for the project will start soon, using existing project funding, to avoid construction delays next year, given timing restrictions for the clearing work that result from state regulations for the protection of bird nesting. Construction for the diversion should start next spring and take a couple of years to complete, Warren said.

Owned by AEA

The Alaska Energy Authority owns the 120-megawatt Bradley Lake facility, which is operated under contract by Homer Electric Association and managed by a committee consisting of representatives of the Alaska Railbelt electricity utilities.

The modifications to the hydropower system will involve constructing a new diversion on the west fork of upper Battle Creek, and laying a 1.7-mile buried pipeline and 1,000-foot canal to carry the diverted water to Bradley Lake. The existing hydropower system has a 125-foot-high dam that raises the natural level of Bradley Lake by 100 feet, with water entering the lake coming from the upper Bradley River and a diversion on the upper Nuka River. A 18,610-foot-long tunnel carries water from Bradley Lake to a powerhouse with two 45-megawatt generating units, on the shore of Kachemak Bay, about 22.5 miles northeast of the town of Homer.

A diversion management plan will ensure an adequate flow of water in Battle Creek below the Bradley Lake diversion, once the diversion is in operation.

The Federal Energy Regulatory Commission approved the Battle Creek diversion design in September 2016. Gaining FERC approval for the project took several years to accomplish.

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