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TDX continues to pitch Chakachamna Sponsor discusses competing public and private interest in hydropower project, but State of Alaska denies involvement Eric Lidji For Petroleum News
Although pushed to the back burner by the State of Alaska, a hydropower project at Lake Chakachamna continues to be on the mind of the company sponsoring the project.
In an update submitted to the Federal Energy Regulatory Commission in early February, TDX Power Inc. said two competing coalitions continued to study the project.
“The State of Alaska, though its development agency (AIDEA), has been seeking funding partners with friendly governments and private equity funds,” TDX Director of Business Systems Jolene Lekanof wrote in the six-month status update to FERC on Feb. 9. “The State hopes to form a coalition that will lead to a successful public/private partnership.”
The State, however, denies involvement in the project.
“We are not involved in any discussions with TDX,” Alaska Industrial Development Authority spokesman Karsten Rodvik told Petroleum News by email on April 4.
The office of Gov. Sean Parnell said no other state agencies are involved in the project.
The update also mentioned that a “competing coalition is forming that would be 100 percent private sector based,” noting the current attractiveness of energy investments. “Also both sets of investors appreciate the fact that this project is environmentally friendly. The Chakachamna project, since it generates power underground, has no need for a dam or reservoir, a common impediment to other potential hydroelectric projects.”
That statement most likely refers to the proposed Susitna hydroelectric project.
No clarification response TDX did not return several requests for clarification.
FERC issued a preliminary permit in February 2010 for TDX to study the hydroelectric project, requiring the company to provide updates on its progress every six months.
As considered, the project would involve diverting water from Chakachamna Lake about 85 miles west of Anchorage through an 11-mile tunnel to an underground power plant.
The 300-megawatt project is estimated to cost $2.9 billion in 2008 dollars.
For the coming six months through August, TDX told FERC that it “intends to continue exploring development options including evaluating the financial feasibility of the hydroelectric project and options for reducing costs and/or securing continued funding from the State of Alaska, friendly foreign governments and the private sector to contribute to the project. A positive funding coalition looks very promising at the point.”
Although both projects have long histories and both have been recently reconsidered as the scarcity of natural gas and the price of diesel fuel have forced policymakers to consider alternative energy sources, the Alaska Energy Authority issued a report in November 2010 recommending the Susitna project over the Chakachamna project.
Calling Chakachamna a worthy alternative, AEA chose Susitna because it would produce cheaper power and pose fewer potential cost overruns. While the Susitna project would cost roughly 50 percent more than Chakachamna, it would produce more than twice as much power, according to AEA. The report also raised concerns about the underground engineering at Chakachamna and the geologic risk from nearby volcanoes and faults.
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