Skip to main Content
Alaska News

Fight over clean water shuts down Alaska's Sheep Creek Lodge

  • Author: Ben Anderson
  • Updated: September 27, 2016
  • Published May 3, 2012

In mid-April, Fred and Phenie Miller, the owners of Sheep Creek Lodge, posted a notice to their customers that they were unexpectedly closing. The reason, according to the letter, was a new set of "onerous" requirements issued by the Alaska Department of Conservation requiring that they must boil all their water intended for human consumption.

That included ice, the water utilized in the soda fountain, the water intended for coffee. It quickly became apparent to the Millers, even though the busy part of the Alaska tourist season hadn't even kicked off yet, that they simply couldn't satisfy the new regulations.

"We went through a weekend with costs out of this world," Fred Miller said, "before we realized we couldn't do it. I watched people look at the notice posted on the front door and walk away."

The "Boil Water Notice," as the requirement is called, was issued by the DEC in response to an ongoing issue with the lodge's well, which in 2006 was classified as being "Ground Water Under Direct Influence of Surface Water" (broken down into the clumsy acronym GWUDISW). The citation came before the Millers even owned the lodge.

It means that the well was susceptible to possible contamination from surface water -- which could contain threats like giardia and cryptosporidiosis, or even E. coli -- as determined by a DEC engineer who evaluated the Sheep Creek Lodge well.

The lodge sees tens of thousands of visitors every year, many traveling the Parks Highway after a long trip down the Alcan or on their way out of the state, or maybe just on their way to or from Denali National Park.

According to Jeff Warner, who works in the Wasilla office for the DEC's drinking water program, the Millers drilled a new well in 2007, one deep enough to bypass a potential GWUDISW classification, but never connected the well to the lodge. The original well was less than 50 feet deep and may not have had an appropriate "confining layer" -- typically a layer of clay or stone -- to ensure that surface water wouldn't make its way into the water supply.

"In July or August of last year, we said, 'no kidding, you guys have to do something about this,'" or the DEC would require a boil water notice, Warner said.

The well had been in use for 23 years, and never tested positive for any harmful bugs, based on quarterly checks of the water quality. But the DEC says that the boil water notice came as the result of years of notice, and a gap in samples from the lodge's well.

Warner said that there was a gap in the required quarterly samples of the water, from March 2011 to March 2012. A sample taken at the end of March 2012 came back clean, but by then it seemed to be too little, too late, and the boil water notice was issued on April 11.

Warner said that just because a sample comes back negative today, doesn't mean it won't come back positive tomorrow.

"(The lodge) only needs to have one outbreak, and that means, first, that we failed because we failed to protect public health, and second, the business can't survive that," Warner said.

Miller sees the problem as one of overreach, to issue a boil water notice on a well that had never had a positive result for any of the threatening bacteria that the samples are intended to test for.

"My wife and I have been drinking it for six years, and still are, without any problems," Miller said, adding that his wife Phenie is a bit of a "water snob." He opted not to perform chemical treatments on the water because of the way it would influence the flavor. He said that the water they had tried from the new well was among the best they'd ever tasted.

Miller said he submitted a plan to connect the new well to the lodge in September 2011, but it wasn't approved until it was too late in the season to excavate. When the boil water notice was issued, the ground was still largely frozen around the lodge, he said, meaning they hadn't had the opportunity to connect the well under their recently-approved permit.

Additionally, he said, a DEC employee hasn't been out to the lodge since 2006, though Warner said a required five-year evaluation of the well was conducted by a DEC contractor in April 2011.

Miller, who used to work for a bank, said that he's not anti-regulation or anti-government. He said that the timing of the boil water notice made it impossible to connect his new well, because of the amount of money it took to comply with the notice, in conjunction with the already-tight budget of running a lodge in rural Alaska during a recession, and the additional cost of hooking up the new well.

It was a perfect storm of unfortunate circumstances, and one that ultimately forced the Millers to close their labor of love. Miller said they turned the lodge from a disreputable stop on the highway into a family-friendly respite in a relatively isolated part of the road system.

Warner notes that the DEC has no authority to close a facility because of issues with the drinking water, only the ability to issue notices and cite businesses for violations. Miller agrees with that assessment, but with a bit of a qualifier.

"A boil water notice on a facility that does restaurant, bar or lodging business is kind of the kiss of death," Miller said. "I'll tell you this, they do not have the authority to put me out of business. That's absolutely true. But they can make it so restrictive that my only alternative is to go out of business."

Whatever the case, the lodge is now closed for the busiest season of the year and the Millers will search for interested buyers, who may be willing to tackle the problem.

Contact Ben Anderson atben(at)

Local news matters.

Support independent, local journalism in Alaska.