The proposed Susitna River hydro project would involve building the biggest dam in the United States in 50 years and change the flow of one of the most loved rivers in the state.
In most places, especially the West, where dams are being torn down and not put up, building a $4.5 billion, massive concrete wall in the middle of nowhere would be unthinkable. But this is Alaska, and the Susitna hydro project is as close as it's ever been in the 30 years that the state has been talking about it.
Last week, the Alaska Energy Authority released a new report touting the Susitna River hydro project over other large hydro proposals as the best way to meet energy needs in the Railbelt, an area stretching from the Kenai Peninsula to Fairbanks. At the same time, Gov. Sean Parnell said he plans to introduce legislation that would allow AEA to pursue funding for and ownership of the project.
"I just absolutely believe this is a go," said state Sen. Lesil McGuire, an Anchorage Republican who has been co-chair of the Senate Resources Committee along with Democratic Sen. Bill Wielechowski.
"Having the governor come out and make this a legacy issue for him, at the top of his agenda, has given it a real chance for success," McGuire said.
A hydroelectric project on the Susitna River about halfway between Anchorage and Fairbanks was first proposed by the U.S. Army Corps of Engineers in the late 1970s, although talk of generating power from the Susitna dates back to the 1950s. Work went on until 1986, when the project was shelved due to an economic downturn.
Readily available and low-cost natural gas became the fuel of choice for Southcentral Alaska as Cook Inlet gas production boomed. And in 1991, the Bradley Lake hydro project on the west side of the inlet came on line.
But times have changed, and the Railbelt is facing skyrocketing gas prices and potential power shortages, especially in the cold winter months.
"What really has changed in the equation is the cost of power," said Rep. David Guttenberg, a Fairbanks Democrat. "Even cheap hydro couldn't compete with the cost of gas."
Joe Griffith, general manager of the Matanuska Electric Association and a big proponent of Susitna hydro, said 25 years ago gas cost less than $1 per thousand cubic feet. Now it is more than $8 per thousand cubic feet, he said.
"The time is right (for Susitna) because cheap gas is gone forever," Griffith said, adding that diversifying the energy supply is the long-term answer. "But the Big Kahuna is truly something like Susitna."
Sizing up the Susitna dam
The proposed dam is bigger than anything that's been built since the Glen Canyon Dam went up across the Colorado River in northwest Arizona in 1966 and created Lake Powell. Glen Canyon Dam is 710 feet high and is capable of producing about 1,300 megawatts.
The Susitna project, as recommended by the AEA, would include a 700-foot-tall dam with a 600-megawatt capacity. In comparison, the dam at Bradley Lake is 125 feet high and generates 126 megawatts.
The Grand Coulee Dam -- towering 550 feet -- was built in 1942 on the Columbia River and can generate about 6,800 megawatts. It's considered the nation's largest electric power facility and the fifth-largest in the world.
Using about $10 million provided by the Alaska Legislature, the AEA compared Susitna to the Chakachamna hydro project proposed by TDX Power, a subsidiary of Tanadgusix Corp., an Aleut village corporation. That project would involve building a 12-mile-long tunnel from an intake under Lake Chakachamna to a power generation facility on the MacArthur River. But the study said that even though Chakachamna would cost less to build, it wouldn't produce nearly as much power and would come with serious environmental and geological concerns.
Neither of the projects have been fully studied, though, and the AEA acknowledges more work must be done on both. But it's still recommending Susitna as the top priority.
A dam could lower energy prices
A dam on the river about 15 miles above Devil's Canyon would create a lake reservoir about 40 miles long, the report said. Salmon migration is not expected to be a major concern, but some habitat might be lost. Environmental and other concerns will be the subject of workshops slated for February.
Susitna is also the only way for the state to achieve 50 percent of its power generation from renewable or alternative energy sources by 2025, as required by state law, the AEA said.
Susitna is envisioned to provide about half of Southcentral's power supply; currently Bradley Lake accounts for about 10 percent to 15 percent of the region's power. But the project has been highly sought after by Fairbanks and other Interior communities that see it as a way to lower high energy prices there, too, or at least keep them from skyrocketing in the future.
"I think it's a project that will have the single-greatest economic impact on the Railbelt, there's no doubt in my mind," said Sen. Joe Thomas, a Fairbanks Democrat who has closely followed the Susitna project.
In fact, Thomas said Wednesday that he wants the state to consider looking at an expandable project -- the one currently being discussed -- called the Low Watana alternative -- can't be expanded and consists of a single dam, not the two-dam project proposed decades ago. The AEA report said the expandable version was not chosen as the preferred alternative because of costs and environmental impacts.
Thomas thinks the state would do better for its money if it could double the power generation for an additional $2 billion in initial capital outlay. He notes that the Railbelt will grow in the 10 to 15 years it takes to build the project, and large industrial projects like the proposed Livengood mine will also be coming on line in that time frame.
The cost of Susitna hydro appears not to be as much of a political concern as it was years ago.
For starters, the state has billions of dollars in a savings account of sorts that's been flush with oil tax revenue from high crude prices in recent years. And the state hopes to recreate the successful financing scheme that built Bradley Lake in which the state covered about half of the cost, with the utilities paying it back.
It's projected $4.5 billion price tag isn't seen as drying up money for other energy projects, either. Lawmakers say plenty of big-ticket items will still be on the table when the Legislature begins its session in January, including an in-state gas line (or "bullet line"), other renewable energy projects and, of course, the large-diameter gas line called for under the Alaska Gasline Inducement Act.
McGuire expects to see the governor propose a financing scheme for Susitna in his legislation and possibly in his budget. She also intends to pre-file a bill that would create an "energy project fund" that would be capitalized with $2 billion. McGuire said that money would be used to leverage more capital to allow for bonding or perhaps building big energy projects in the state. An in-state gas pipeline could be part of that, she said, adding that a new report is expected to be released Dec. 15 on the feasibility of an in-state line and the role of the state as an equity partner in that project.
Guttenberg, who agrees the state should invest its own money in construction of a hydro project like Susitna, also thinks 2011 will be the year the Legislature makes progress toward resolving Alaska's energy woes. "There are big issues on the table," he said, many of them being driven by the downturn in the flow of oil through the trans-Alaska pipeline and the effect that will have on the state's economy.
"Susitna is a statewide energy issue," he said. "It will move the (electric) grid out of the Railbelt into rural Alaska, maybe out to Donlin Creek (where a big mine is planned) or into the Kuskokwim area. We can start building out our state because we have the power."
Contact Patti Epler at patti(at)alaskadispatch.com.