Alaska's Susitna hydro project revived

Wednesday, December 14, 2011

A large hydroelectric project proposed by Alaska's public power authority is moving closer to reality.  With over 600 megawatts of electric generating capacity, the Susitna-Watana Hydroelectric Project would be the largest dam built in the U.S. since 1966, when the Glen Canyon Dam was built on the Colorado River in Arizona.  If built, the Susitna project would represent a return to both mega-scale hydro and state-backed hydroelectric development in the United States.

The Susitna River project has been under consideration for nearly 50 years, although environmental concerns and the relatively low cost of oil dampened interest in the project for much of that time.  Increasing fossil fuel costs, renewable energy targets, and interest in exploiting the state's sovereign resources have now led to a revival of the project.  In 2011, Alaska state legislators unanimously approved funding for the Alaska Energy Authority to pursue the project.

The Alaska Energy Authority (AEA) was created by the Alaska Legislature as a public corporation of the state, albeit with a separate and independent legal existence.  AEA's missions include reducing the cost of electricity in Alaska, and constructing, acquiring, financing, and operating projects that utilize Alaska's natural resources to produce electricity and heat.

Renewed interest in the Susitna project comes partly in response to Alaska's renewable portfolio standard law.  In 2010, the Alaska Legislature enacted House Bill 306, creating a goal that the state receive 50% of its electric generation from renewable and alternative energy sources by 2025.  The project could also produce low-cost electricity, with generation costs projected to be lower than natural gas over the life of the project, possibly significantly lower once the project's financing is paid off.

AEA now plans to follow the traditional process for licensing hydroelectric projects through the Federal Energy Regulatory Commission.  AEA is expected to file its pre-application document with FERC on December 29, 2011, with the license review process expected to take up to six years.

If the Susitna project is built, it will be a departure from the recent trend of dam removal.  Some observers have argued that the era of building large-scale hydroelectric facilities in the United States ended decades ago, but the Susitna project could reverse that trend.  Moreover, the Susitna project would be built by a sovereign state government, echoing historic federal efforts like the Tennessee Valley Authority and Bonneville Power Authority.

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