Alaska utility execs to lawmakers: Let's revive Susitna hydroelectric megaproject

Yahoo

16-05-2025

A rendering of the proposed Susitna hydroelectric development. (Alaska Energy Authority image)
With urban Alaska facing a shortfall in the natural gas long used to generate the vast majority of its power, renewable energy advocates have been pressuring the region's utilities to advance large-scale wind and solar development to meet future power demands.
But no such projects have been built in the past few years, even with generous tax credits available from the federal government. And now, the utilities are pitching the idea of cutting their dependence on gas by resurrecting a dormant but divisive megaproject: a huge hydroelectric dam along the Susitna River estimated, a decade ago, to cost $5.6 billion.
The pitch, sent to three key budget-writing members of the state House, came earlier in May in a formal letter from the heads of Anchorage-based Chugach Electric Association, Kenai Peninsula-based Homer Electric Association, Fairbanks-based Golden Valley Electric Association, Matanuska Electric Association and Seward's municipally run electric utility.
[Read the letter]
'In an era when Alaska is facing production declines and difficulty securing natural gas, pursuing energy projects with proven technology, like hydro, provides the utilities with additional generation options while preserving existing natural gas resources,' the executives wrote. They added: 'We need multiple options to solve the biggest issue impacting Alaska utilities today: fuel availability.'
The Susitna hydroelectric project has been contemplated, off and on, for decades, before development was suspended by former Gov. Bill Walker in 2016 amid a state budget crisis.
The project could generate 50% of urban Alaska's electricity demand, according to the state agency that's led the study process, the Alaska Energy Authority.
The letter from the utility executives asks the three co-chairs of the House Finance Committee to revive the state's partially completed efforts to secure a federal license for the project.
Officials estimate that finishing the licensing process could cost as much as $100 million, on top of some $200 million that's already been spent.
Lawmakers are nearing the end of their annual budget writing process, and amid declining state revenue, they haven't added any cash for the hydro project yet.
They're also still considering legislation to require the utilities to generate higher amounts of power from renewable sources by target dates.
Reached between meetings Wednesday, Anchorage Rep. Calvin Schrage, one of the letter's recipients, declined to comment.
The utilities' request to revive the Susitna project is exasperating advocates for other forms of renewable energy, who say that hydroelectric development is economically and politically unrealistic given its huge cost and potential impacts to the river's yearly runs of hundreds of thousands of salmon.
'It feels like an unfortunate distraction from the urgent work that we need to be doing to secure affordable energy,' said Alex Petkanas, climate and clean energy program manager at the Alaska Center, a conservation group. 'We have the studies and the information we need about wind power in Alaska, wind availability in Alaska, and wind reliability. So, to see them spending time on a controversial project rather than pursuing solutions like wind energy that are within our reach feels like a mistake.'
Hydroelectric projects like the Susitna development appeal to utility executives because they provide what's known as 'dispatchable' power — electricity that's available whenever it's needed.
The utilities have expressed more skepticism about wind and solar developments because of their variability, though a recent study commissioned by the utilities found that urban Alaska's grid could boost its use of wind power seven-fold without jeopardizing reliability.
The next step for the hydroelectric project wouldn't require the full amount of cash to secure the federal license, said Curtis Thayer, the energy authority's executive director. Instead, he said, lawmakers would have to budget 'a few million dollars' to better understand how much work is needed before the license could be issued.
'We need to spend a little bit of money to refresh all those numbers to really decide if this is a viable project to move forward,' Thayer said. He asserted that the billions of dollars that would be required for construction is 'not an issue,' because private investment firms would finance the project in exchange for guaranteed returns.
For developments that have received federal licenses, 'there are people that are standing in line to invest,' Thayer said.
The Susitna proposal faces intense opposition from conservationists and some residents along the river, who say that the development would harm salmon by dramatically reducing water flow in the summer, when power demand is lower, and artificially boosting it during the winter, when demand is high.
The Susitna River Coalition, a nonprofit that's led efforts to block the dam, says its construction would cause the 'eradication' of the river's 'unique ecosystems, the destruction of one of Alaska's most valued salmon spawning and rearing habitats, and the flooding of 40,000 acres teeming with wildlife, while costing the state billions of dollars that are needed elsewhere.'
Critics of hydroelectric development point out that elsewhere in the United States, dams are being removed, not built, because of their harmful effects on salmon and other migratory fish species. They also say that construction costs regularly exceed projections.
Opponents of the Susitna project also questioned the process that led to the letter being drafted and sent by the executives of the cooperatively owned utilities, which are governed by citizen boards of directors.
Those opponents said that not all the utility executives had consulted with board members before the letter was sent — an assertion that two members confirmed to Northern Journal, though they asked to remain anonymous to describe internal conversations.
'Utility staff should not be contacting the Legislature or taking positions without board knowledge or approval,' said Petkanas.
A spokesperson for the largest urban utility, Chugach Electric Association, could not be reached for comment Wednesday, while the spokesperson for the next-largest, Matanuska Electric Association, did not respond to a request for comment.
But Mark Wiggin, board chair of Chugach Electric Association, said he was informed about the letter in advance.
'There's an overarching interest by all of us to find some way to maintain our energy grid,' Wiggin said. 'However we do that, without having to import all that gas, would be a good thing.'
Disclosure: Northern Journal reporter Nat Herz works as a volunteer crew member (paid in fish, not cash) for two weeks each summer at a small commercial fishing business at the mouth of the Susitna River.
Nathaniel Herz welcomes tips at [e-mail] or [phone]. This article was originally published in Northern Journal, a newsletter from Herz. Subscribe at this link.
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