From Sean Cockerham in Juneau -
JUNEAU-- Alaska legislators are talking seriously about resurrecting the long-dead dream of a Susitna hydroelectric dam now that the state is flush with oil money.
House Speaker John Harris said he's interested in taking a close look at the mega project. The potential for cheaper energy in Alaska's Railbelt needs to be explored as utility bills go up and the state has a multi-billion dollar budget surplus, the Republican from Valdez said.
"I want to dust off the proposal again and let's look at it and see what it's going to take to make either that or some other proposal work," Harris said.
Fairbanks Republican Gary Wilken, a member of the Senate minority, is a big Susitna dam supporter.
"We should take $3 billion, set it aside to backstop bonds and build the Susitna dam," said Wilken. "To bring competitive electrical power to 70 percent of Alaskans that will pay off for the next 100 years."
Alaska state officials began talking about a huge hydro project on the Susitna River in the 1970's as the North Slope oil money first started to flow into the state treasury. The project, which actually called for two dams, collapsed under its own weight in 1986 as oil prices and state revenues plummeted, leaving the estimated $5 billion for construction bonds out of the state's reach.
The state spent $132 million studying the project before finally giving up on it. Some legislators blanch at the idea of the state diving back into such a costly effort.
"It would take quite a bit of convincing before I think I'd want to put money into the Susitna dam," said Anchorage Republican Sen. Con Bunde.
Anchorage Democratic Rep. Mike Doogan said a $5 billion project in 1986 might cost $10 billion today.
"Unless the cost of building dams has against all odds gone down, I don't see any reasons it would be a more likely prospect now than 20 years ago," he said.
Doogan said such a project would have to prove it could provide cheaper power and compete with all the other demands across Alaska for public dollars.
House Speaker Harris said he doesn't know just what the project would look like or how much it would cost today.
He spoke of just a single dam this time at Devil's Canyon northeast of Talkeetna, although he said it might require a second, smaller, earth and rock filled dam.
Harris said he doesn't know if the state could afford a Susitna dam project or even if it is the best hydro project out there. But he said it's worth looking at because the public expects lawmakers not to blow the budget surplus and investing in low cost energy is good for the long term.
The Legislature's decision last year to retroactively raise state taxes on the oil companies has combined with high crude oil prices to leave the state swimming in cash. The amount of the surplus will depend on the price of oil, but lawmakers are estimating it might be between $4 and $5 billion before the next fiscal year ends in June 2009.
Harris said he thinks the level of support in the Legislature for a Susitna dam project would depend on how much it cost and how it could be financed. It could be a hard sell to many lawmakers who have said they want to save at least a big chunk of the surplus in the Constitutional Budget Reserve,
Harris said he plans to talk to the Palin administration about the Susitna dam project.
Gov. Sarah Palin's spokeswoman, Sharon Leighow, said the governor supports renewable energy but would need to look at the cost and environmental impact before weighing in on a Susitna dam project.
While state officials haven't seriously pursued the project since the 1980s, U.S. Rep. Don Young, R-Alaska, has continued to try to secure funding to jump start it through the years.
Follow the latest from reporter Sean Cockerham in Juneau on our Alaska Politics blog: at adn.com/alaskapolitics.