Susitna hydro, in-state gas line take the energy spotlight

Together, the projects would cost more than $12 billion.

July 25, 2011 

Gov. Sean Parnell joins Sara Fisher-Goad, executive director of the Alaska Energy Authority, at a press conference in Anchorage to announce the inauguration of the $4.5 billion Susitna-Watana Hydroelectric Project.

RICHARD MAUER / ANCHORAGE DAILY NEWS Buy Photo

Mixing sports metaphors and his personal ideology, Gov. Sean Parnell on Monday inaugurated the revived Susitna River hydro project at a news conference in Anchorage.

Just a few minutes later and several blocks away, a legislative committee heard a formal presentation on another energy mega-project, the proposed instate natural gas pipeline from the North Slope to Southcentral Alaska.

The two projects combined would cost more than $12 billion, most of it borrowed by state agencies in the bond market.

"You can never have too much opportunity," Parnell said, voicing support for both projects.

Parnell's press conference, attended by far more invited officials and dam advocates than reporters, had the air of a staged event. Surrounded by legislators, Parnell signed a copy of the bill that authorized the Susitna-Watana Hydroelectric Project but it was a ceremonial copy. The legal signing of Senate Bill 42 took place July 13, according to Parnell's spokeswoman.

"In the words of some sports fans here, it's time to go big or go home, with Susitna-Watana hydro," Parnell said.

"It's a long game," he added. "You can't putt your way to building a hydro project of this magnitude ... it's time to smack the ball down the fairway -- it's time to commit."

The three-page Senate bill mainly revised the structure and operations of the state-owned Alaska Energy Authority and authorized a number of projects around the state. One sentence of the bill established the Susitna-Watana project, directing the authority to "acquire" a dam by "construction, purchase, gift or lease."

No one is expecting someone to give the power project to the state. Joining Parnell at the press conference, AEA Executive Director Sara Fisher-Goad said the agency planned to formally apply for a license in November with the Federal Energy Regulatory Commission.

The permitting process, which will include a formal environmental impact statement, is expected to take six years and, with project design, will cost more than $160 million, according to the AEA's external affairs manager, Karsten Rodvik.

The current cost estimate for the 700-foot-tall Susitna-Watana dam and power generating and transmission facilities is $4.5 billion. When completed in 2023, it would have an installed capacity of 600 megawatts, about the size of a midsize coal-fired plant in the United States and about five times as big as the Bradley Lake hydroelectric project on the Kenai Peninsula.

"Even if this comes on line when we think it does, it could supply roughly 50 percent of the projected needed power for Southcentral," Parnell said. That leaves plenty of need for continued use of natural gas in power turbines, which could come from new sources in Cook Inlet or the instate gas line.

The state spent tens of millions of dollars in the 1980s studying hydroelectric projects on the Susitna River but abandoned the effort in the face of cheap natural gas and controversy over damming a large, free-flowing river.

The controversy has not gone away. At least two Talkeetna residents attended the news conference. One, Becky Long, said she opposed the new version of the project and asked Fisher-Goad whether residents would have their say. Fisher-Goad assured her that the FERC licensing procedures would include ample public comment.

Five blocks away, at the meeting of the Legislature's joint In-State Gas Caucus, Sen. Lesil McGuire, one of the committee's four co-chairs, also saw no reason why both projects couldn't co-exist. The $7.5 billion-plus, 24-inch-diameter gas line would be completed by 2019 under current projections.

While the Railbelt could absorb the energy from both projects, less clear is the effect of the state going to the bond markets for both projects at about the same time, McGuire said. She also expressed concern over whether the local economy would overheat during the building boom -- and crash when it was over.

And then there's the matter of the 48-inch-diameter TransCanada pipeline to the Lower 48, to which the state is committed to reimburse $500 million in expenses. While there are no assurances the TransCanada line would ever be built, the project has an official license through the state's Alaska Gasline Inducement Act.

State officials say that if the TransCanada line is built, the in-state line could be used as a spur to take off gas for Alaskans. If it's never built, the in-state line would assure a long-term source of gas for Anchorage and Fairbanks.


Reach Richard Mauer at rmauer@adn.com or 257-4345.

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