Alaska Senate clears Susitna dam plan

The Senate cleared a plan Tuesday to let the Alaska Energy Authority build and operate a proposed Susitna River hydroelectric dam.

In November, the agency recommended the state pursue the Susitna project to help meet Alaska's goal of having 50 percent of its electricity generation come from renewable sources by 2025. The state had shelved the project roughly 25 years ago when the price of oil plummeted, erasing the dam's expected comparative advantage.

"Today, Alaska is a long way from those times," Sen. Joe Thomas said. Cook Inlet natural gas reserves are "uncertain" and gas supplies can be better used for space heating than for electricity generation, he said.

The bill, Senate Bill 42, now heads to the House. Lawmakers are also poised to approve $66 million in spending to prepare for the project.

The Senate approved the bill unanimously.

Lawmakers watered the measure down from the original version pitched by Gov. Sean Parnell this winter. It holds no room, for example, for the Energy Authority to hire its own employees for the project — it currently works beneath the Alaska Industrial Development and Export Authority and has no employees. And the authority won't be able to create subsidiary corporations for the project, although it may need to as work advances.

But Thomas said the changes will let the agency focus its work instead of trying to do too much too fast.

The bill would also let renewable energy specialists chase plans for two smaller hydroelectric proposals, one on Prince of Wales Island's Reynolds Creek and another at Humpback Creek north of Cordova.

Thomas told the Daily News-Miner that he and other strong supporters of the Susitna proposal can take a hands-off approach once the bill passes the Legislature — the legislative branch expects AEA will keep it updated on progress. He said signals suggest the $66 million capital grant request is on safe ground as lawmakers move through their special session. Legislators had asked for, and received, a detailed breakdown of how the money will be put to work, he said.

Thomas said plans for the dam have drawn broad public support, including healthy signals from members of the Federal Energy Regulatory Commission.

"They were all" — every member of the commission — "excited about the prospects," he said.

Thomas said the Legislature will need to take future steps to keep the Susitna planning process moving. The project, for example, will likely need a board to oversee operations, he said. A similar oversight process is used by the Bonneville Power Administration in the Pacific Northwest, he said.

Energy specialists say the proposed 600-megawatt dam could be up and running in roughly a decade. Early cost estimates came in at $4.5 billion but state engineers say that figure could fall significantly with design changes. Construction would likely rely on a mix of loans and public money. It would feed a handful of utilities between Fairbanks and Homer.

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