Alaska’s Energy Future: Chugach Electric Bets on Hydropower Amidst Gas Supply Concerns
Alaska’s largest electric utility, Chugach Electric Association, is actively exploring four new hydropower projects as a strategic move to diversify its energy sources and mitigate the risks associated with a declining supply of natural gas from Cook Inlet. This decision comes as the state faces potential energy shortfalls and rising costs, prompting a reevaluation of its long-term energy strategy.
The Looming Gas Shortfall and the Search for Alternatives
For years, Alaska has relied heavily on natural gas from Cook Inlet to power its communities. However, Hilcorp Alaska, the dominant gas producer, signaled in 2022 that it would not extend existing gas contracts at current levels, creating uncertainty for utilities like Chugach. This prompted a scramble for solutions, including exploring liquefied natural gas (LNG) imports, which could increase customer bills by as much as 10%.
The situation is critical. Regulators warn that without decisive action, Alaska could face a “dire” energy situation as early as 2027. A consortium led by Enstar, representing multiple utilities, is working on plans for LNG import infrastructure, but time is running out to begin construction.
Hydropower: A Long-Term, Cost-Effective Solution?
Chugach Electric believes hydropower offers a viable, long-term solution. The utility has filed preliminary permit applications with state and federal regulators to investigate four potential hydropower sites in Southcentral Alaska. These projects were selected from over 150 options and represent a significant investment in renewable energy infrastructure.
According to Arthur Miller, Chugach Electric’s chief executive, hydropower is “the lowest cost long-term energy source for ratepayers.” It too aligns with the utility’s decarbonization goals, reducing reliance on fossil fuels.
Project Details: A Look at the Potential Sites
The four proposed projects vary in size and location:
- Canyon Creek (Kenai Peninsula): A run-of-river project with a potential output of 6 megawatts.
- Caribou Creek (Matanuska Valley): The largest project, capable of producing 18 megawatts.
- Godwin Creek (near Seward): A project with a potential output of 16 megawatts, located in an area considered suitable for energy infrastructure.
- Boulder Creek (near Chickaloon): A project capable of producing 12 megawatts.
Combined, these projects could generate up to 52 megawatts of power. For comparison, the existing Bradley Lake Hydroelectric facility produces 120 megawatts and supplies approximately 10% of the Railbelt’s annual power needs.
Navigating Challenges and Timelines
Developing hydropower projects is a complex and time-consuming process. Chugach Electric aims to beat a December 31, 2033, deadline to begin construction to qualify for federal tax credits, incentives that were specifically protected for hydropower projects in the One Big Beautiful Bill Act, unlike those for solar and wind.
The utility emphasizes the importance of minimizing environmental impacts and conducting thorough feasibility studies. Hydropower structures will not be built in areas accessible to migratory fish, such as salmon.
Beyond Hydropower: A Diversified Energy Portfolio
Chugach Electric isn’t solely relying on hydropower. The utility is also exploring other renewable energy sources, including a 10-megawatt solar farm at its Beluga Power Plant. Even as a large wind project, Little Mount Susitna Wind, is no longer being pursued by Chugach, the utility remains open to considering future opportunities.
Expanding Gas Storage as a Bridge
While pursuing long-term solutions like hydropower, Chugach Electric is also taking steps to ensure short-term energy security. The utility is actively involved in expanding gas storage capacity, including co-investing in new wells at the Beluga River Unit (BRU) and evaluating the feasibility of adding up to 20 billion cubic feet of gas storage at the BRU. They currently contract for 2.1 billion cubic feet of gas storage service with Cook Inlet Natural Gas Storage Alaska (CINGSA).
FAQ
Q: Why is Alaska facing a natural gas shortfall?
A: Hilcorp Alaska, the primary gas producer in Cook Inlet, has indicated it will not extend existing gas contracts at previous levels.
Q: What is LNG and why is it being considered?
A: LNG (Liquefied Natural Gas) is natural gas that has been cooled to a liquid state for easier transportation. It’s being considered as an import source to replace declining local production.
Q: How long will it take to develop these hydropower projects?
A: Hydropower projects require years of study and development, including permitting and construction.
Q: Will these projects impact fish populations?
A: Chugach Electric states that hydropower structures will not be built in “anadromous reaches,” or areas accessible to migratory fish.
Did you know? The One Big Beautiful Bill Act provided long-term tax incentives for hydropower projects, making them more financially attractive compared to solar and wind.
Pro Tip: Staying informed about Alaska’s energy landscape is crucial for residents and businesses. Regularly check Chugach Electric’s website and local news sources for updates.
Learn more about Alaska’s energy challenges and solutions by exploring Chugach Electric’s website and following updates from the Anchorage Daily News.
