WASILLA -- A massive dam proposed for the Susitna River faces deep funding cuts after the Alaska Energy Authority failed to get access to thousands of acres of Alaska Native village corporation lands in the project area.
The Susitna-Watana Hydroelectric Project, expected to cost upwards of $5 billion, was getting a steady flow of state funding -- roughly $95 million last year and a total of $77 million in prior years. But for the first time, the project faces a serious drop in that previously generous flow.
Gov. Sean Parnell recommended $10 million for the project in the 2015 proposed capital budget -- less than a tenth of the $110 million the Authority says it needs to get the project to the license application stage.
At issue for the governor is the Authority's failure to secure land-use agreements for the rugged terrain around the dam site with six village corporations associated with Cook Inlet Region Inc.: Chickaloon Moose Creek Native Association Inc.; Knikatnu Inc.; Ninilchik Natives Association Inc.; Salamatof Native Association Inc.; Seldovia Native Association Inc; and Tyonek Native Corp. CIRI owns subsurface estate in the area.
Village corporations own land at the proposed dam site and along the Susitna River. Environmental study contractors need to access the lands as part of the 58 separate environmental studies across 186,000 acres that are part of the dam permitting process. At least 39 of the 58 project-related studies fell on or near village corporation or CIRI lands or both, according to Alaska Energy Authority estimates.
At a budget press conference in Anchorage last month Parnell said he couldn't ask the Legislature to fulfill the Alaska Energy Authority dam funding request until the access problems are resolved.
"I told AEA I wanted to see more significant progress on land-access agreements before we move forward with committing a significant amount of money," the governor said.
DAM DELAY?
Located 90 miles upstream from Talkeetna, the Susitna-Watana Hydroelectric Project would include a dam at least 700 feet tall -- making it one of the tallest in the U.S. -- plus a 39-mile-long reservoir and power plant with a road and transmission line connecting with the Alaska Intertie.
Supporters say a Susitna dam would provide reliable, low-cost power over decades and could supply about half the Railbelt's electricity needs. Critics say better power sources exist and the project could jeopardize abundant fish and wildlife, including the Susitna's prized salmon.
Parnell could still amend the Susitna project funding as agreements come on line or members of the Legislature could restore it through appropriations, Authority spokeswoman Emily Ford said.
But in the meantime, the Authority has scaled back the environmental studies it plans to do this year and is asking the Federal Energy Regulatory Commission to extend a deadline for a crucial progress report that's supposed to be filed in early February, pushing back the whole project by a year.
Ford said she wouldn't classify the governor's proposed funding cut as a setback.
"It has to remain a schedule-driven yet iterative process so there's going to be these adjustments along the way," she said. "That's exactly what we're doing."
Both sides say they're now making progress on land-access agreements.
TRESPASS STOPS TALKS
State officials started as far back in early 2012 trying to get permission to enter Native lands for studies.
Then, several village corporation representatives said, negotiations stalled over trespass concerns. The village corporations also didn't finalize land selection through the Alaska Native Claims Settlement Act until last year.
Contractors accessed CIRI, Tyonek, Knikatnu, Ninilchik, and Chickaloon Moose Creek lands without valid permits in 2012, according to a letter the village corporations and CIRI sent the Federal Energy Regulatory Commission in June of last year. Several village corporation representatives said they couldn't openly discuss examples of trespass, citing ongoing confidential negotiations.
The corporations last year formed the Cook Inlet Region Native Landowner Working Group "to discuss trespasses related to AEA's 2012 studies and ongoing communication and access issues," the letter to the federal agency said.
Even as "seemingly productive conversations" regarding trespass continued last year, dam study contractors built two helipads on Knikatnu lands without necessary permits, the letter said.
"(T)hese problems speak to a lack of robust management, infrastructure and resources which, left unchecked, will not only allow trespasses to continue but risk the health and safety of contractors as the very recent and tragic accident near Stephan Lake Lodge attests," the letter said. Donald Kiehl, a 72-year-old North Pole equipment operator, died in May when his bulldozer sank into an icy lake while working on a dam-related camp.
CIRI and Tyonek issued after-the-fact permits to ensure that liability issues were addressed, the corporations said in the letter. The Authority later settled with Knikatnu and Chickaloon Moose Creek.
The landowners requested that the state resolve past trespass issues and prevent future ones, develop a system to provide compensation for loss or damage, and create a dedicated health, safety and environment position on staff.
The Authority responded to all three of the concerns raised by the group, Ford said.
"Once that was accomplished, negotiations were able to move forward in earnest," she wrote in an email Monday. "This effort is important not only for short-term access, but for long-term discussions and opportunities."
'WE'RE ON TRACK'
Negotiations are going well on the land-use permits the state needs to do studies on Native lands, several village corporation representatives said.
"The access issues have been a concern," Knikatnu CEO Tom Harris said Friday. "We're appreciative that (the Authority) is taking access seriously."
The Wasilla-based village corporation owns as much as 34 miles on both sides of the Susitna, said Harris.
"It's a simple property rights issue," he said. "We're dealing with this as any landowner would deal with it."
Generally, Harris said, the corporation's discussions with the state include financial compensation but also environmental concerns including his long-standing contention that Alaska is the least productive wildlife state in the nation. Knikatnu in a 2012 letter told federal regulators that a condition of any access would be help with a public-private partnership to increase moose and other wildlife numbers.
Ninilchik, with offices on the Kenai Peninsula, owns as much as 19,200 acres within the potential project area and experienced issues with an "accidental" trespass in a creek bed, said president and CEO Greg Encelewski.
It's possible the village corporation may finalize a land-use permit with the Authority by mid-February, he said. "We're on track to actually make something happen ... it's quite historic that we actually could manage to come together with six villages and the AEA board."
SHIFTING STUDIES
The trespass issues took a toll on environmental studies necessary to the permitting process.
The state did not pursue any activities on CIRI or Cook Inlet village corporation lands for the 2013 summer field season, Ford said. That limited field crews' access to, at most, 1,920 acres of the 186,000-acre study area.
The Authority had permits from Ahtna, Inc. for work on their lands near the Denali Highway, and was able to "collect a wealth of valuable information across the study area," she said.
Critics of the process disagree.
Limited access to village corporation lands led to modifications such as using a helicopter instead of putting researchers on the ground, said Whitney Wolff, vice president of the Susitna River Coalition, a Talkeetna-based organization of more than 15,000 individuals and organizations that oppose the project.
"That's been a main theme of the study season," Wolff said. "Trying to follow the modifications that were required for each of the studies and the variances that ensued because of the lack of access, and just trying to track which studies didn't get done at all."
The coalition was one of 10 organizations that sent federal regulators a letter last week that, among other things, asked that the Authority's report consistently document variances from approved study protocols including "all studies that were altered in any way by lack of access to Cook Inlet Regional Village Corporation lands."
Reach Zaz Hollander at zhollander@adn.com or 257-4317.
State seeks new timetable on dam
The Alaska Energy Authority on Monday asked the Federal Energy Regulatory Commission for a four-month extension on a major progress report that's part of the licensing process for the Susitna-Watana Hydroelectric Project.
The state corporation behind the massive project originally hoped to file a federal license application in late 2015 and bring Susitna-Watana online by 2024. The state would file a license application in December 2016 under the new timeline.
The requested extension will allow stakeholders more time to provide feedback on the report, Authority officials said in a press release issued Monday. Dam opponents have argued the state's timeline for the huge study is too compressed to allow for good science but said they were still examining the state's request this week.
The delay reflects a deep reduction in dam funding included in Gov. Sean Parnell's proposed capital budget for 2015, officials say. The governor and Legislature may choose to provide additional funds to the project based on success getting permission to access Alaska Native village corporation lands in the project area, but the Authority needs to prioritize environmental studies based on existing funds, project manager Wayne Dyok said in a letter sent Monday to the federal agency. State asks for new timetable on Susitna dam
The Alaska Energy Authority on Monday asked the Federal Energy Regulatory Commission for a four-month extension on a major progress report that's part of the licensing process for the Susitna-Watana Hydroelectric Project.
The the state corporation behind the massive project originally hoped to file a federal license application in late 2015 and bring Susitna-Watana online by 2024. The state would file a license application in December 2016 under the new timeline.
The requested extension will allow stakeholders more time to provide feedback on the report, Authority officials said in a press release issued Monday. Dam opponents have argued the state's timeline for the huge study is too compressed to allow for good science but said they were still examining the state's request this week.
The delay reflects a deep reduction in dam funding included in Gov. Sean Parnell's proposed capital budget for 2015, officials say. The governor and Legislature may choose to provide additional funds to the project based on success getting permission to access Alaska Native village corporation lands in the project area, but the Authority needs to prioritize environmental studies based on existing funds, project manager Wayne Dyok said in a letter sent Monday to the federal agency.
By ZAZ HOLLANDER