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Efforts continue on Kenai hydro project Subsidiary of Homer, Alaska, electric co-op seeks second FERC permit for Grant Lake; state energy authority contributes grant money Wesley Loy For Petroleum News
An Alaska electric cooperative is pushing ahead with plans for a hydroelectric project on the Kenai Peninsula.
Homer Electric Association, through its Kenai Hydro LLC subsidiary, is proposing the controversial Grant Lake project as part of an effort to build a diverse portfolio of generation assets.
As it stands now, Homer Electric purchases power from another co-op, Anchorage-based Chugach Electric Association. That contract, however, expires at the end of 2013.
The hydro project would involve taking water from Grant Lake, north of Seward, to drive generators. The project might include construction of a low dam.
FERC involvement Kenai Hydro obtained a preliminary permit from the Federal Energy Regulatory Commission in October 2008 to begin exploring the feasibility of the hydro project.
That permit was set to expire at the end of September.
In an Oct. 1 letter to FERC, Kenai Hydro asked for a second three-year permit.
The company said it already has made “substantial progress” on the project, and it intends to continue with field studies, engineering design and other work.
Ultimately, Kenai Hydro aims to apply for a FERC project license in 2014.
According to the latest project description, Grant Lake would involve taking water from the mountain lake and sending it down a 3,200-foot tunnel to a powerhouse with two Francis turbine generators rated at a combined capacity of 5 megawatts.
One of the options under consideration would involve construction of a dam near the lake’s natural outlet into Grant Creek. The dam, at 120 feet wide, would raise the lake level by 2 feet. The dam would feature a spillway at its center.
The project also would involve construction of an access road and either underground or overhead power transmission lines.
The power would be sold to Homer Electric Association.
Controversy, cost Grant Lake is located near the Moose Pass community, just east of the Seward Highway.
The hydro project has drawn controversy from some area residents who view it as a threat to the Kenai River watershed. The Kenai is famed for its trophy salmon and trout.
The Grant Lake project appears to depend on considerable subsidies from the state government.
Kenai Hydro said it secured nearly $1.2 million in August from the Alaska Energy Authority’s renewable energy grant program to support the FERC licensing effort.
The company told FERC it would contribute at least $296,000 in “internal financing” to the upcoming field work and design.
Kenai Hydro also has applied for another $4 million from the energy authority for construction should FERC grant a license.
The total cost estimate for Grant Lake is $27.2 million, said documents submitted to the energy authority in September 2010.
At 5 megawatts of electricity, Grant Lake would represent only a small part of Homer Electric’s current average load of 60 megawatts. Five megawatts is enough for about 2,300 homes.
Grant Lake is among a number of projects Homer Electric Association is pursing to build its own mix of generation assets.
In March, the co-op announced a collaboration with Ocean Renewable Power Co. of Portland, Maine, on a possible tidal power pilot project in Cook Inlet.
In July, Homer Electric said it had agreed to buy the gas-fired Bernice Lake Power Plant, located near the Tesoro refinery in Nikiski, from Chugach Electric. The $11.8 million transaction was slated to close by the end of the year.
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