The Matanuska River flows past King Mountain on Friday, June 26, 2024 at mile 76 in Chickaloon. (Loren Holmes / ADN)
Alaska’s largest electric utility plans to study four new hydropower projects, a potential counterweight to future imports of natural gas that could be costly as local gas production declines in Cook Inlet.
Chugach Electric Association has filed early applications for permits with state and federal regulators to investigate the hydropower sites in Southcentral Alaska for possible future construction, the utility said in a statement.
The projects, if developed, could reduce the utility’s reliance on natural gas, a fossil fuel, while providing a stable source of clean power.
The utility said in a statement that if it proceeds with developing the projects, it wants to beat a Dec. 31, 2033, deadline to start construction to receive federal tax credits.
The incentives were protected for many future years for hydropower projects, but not for solar and wind projects, in President Donald Trump’s One Big Beautiful Bill Act that passed over the summer.
Hydropower is “the lowest cost long-term energy source for ratepayers,” said Arthur Miller, chief executive of Chugach Electric, in the statement.
It allows the utility to “reduce the need for fossil fuels, and helps us meet our decarbonation goals,” Miller said.
The projects were selected from more than 150 options, in a process that began more than two years ago, the utility said.
The hydropower projects could require years to study and develop, the company said.
“With the preliminary permits filed, we can continue to investigate how to minimize and mitigate impacts from potential projects, look for fatal flaws, and only move forward on projects that are economical, and benefit thousands of Alaskans,” Miller said in the statement.
Hydropower structures for the selected projects would not be built in “anadromous reaches,” or areas accessible to migratory fish such as salmon, the statement said.
Dams would need to be built in each location.
The smallest proposal, at Canyon Creek on the Kenai Peninsula and in the Chugach National Forest, is described as a run-of-river project. Those facilities typically divert water and return them to streams to create electricity, and may require limited damming. Canyon Creek could produce 6 megawatts.
The larger projects are at:
• Caribou Creek, a tributary of the Matanuska River. The project could produce the largest amount of power, at 18 megawatts. It’s proposed about 85 miles northeast of Anchorage, near Glacier View.
• Godwin Creek near Seward. The project would be located partly in the Chugach National Forest, in an area considered suitable by the federal government for energy infrastructure. It could produce 16 megawatts of power.
• Boulder Creek, near Chickaloon about 65 miles northeast of Anchorage. It could produce 12 megawatts of power.
The four projects together could potentially produce 52 megawatts.
By comparison, the 35-year-old Bradley Lake Hydroelectric facility, northeast of Homer, is a 120-megawatt installation.
Bradley Lake produces about 10% of the power used annually on the Railbelt from the Kenai Peninsula to Anchorage and Fairbanks.
Antony Scott, director of economic and regulatory analysis for Renewable Energy Alaska Project, said the four proposed hydropower projects, if all are built, could offset a “material” amount of natural gas used by the utility.
Hydropower projects, however, typically require lots of time to be permitted and built, he said.
“It is unfortunate that they’ve waited until now to pursue these sorts of opportunities, given that the current natural gas crisis has been known to be coming right around this time,” he said.
“Having said that, the best time to plant a tree is 20 years ago, and the next best time is today,” he said. “So I’m glad that they’re pursuing it now.”
Fears about a future shortage of gas from Cook Inlet flared up about 15 years ago, leading to calls for gas imports. But new production helped alleviate the problem for several years.
The concerns returned in 2022 when the dominant Cook Inlet producer, Hilcorp Alaska, notified utilities that it lacked enough reserves to provide for gas contracts that would expire in the coming years.
Utilities and companies have scrambled to find a solution, including by proposing to modify or build new facilities to import liquefied natural gas, or LNG, from outside Alaska.
Chugach Electric has said LNG imports could begin in 2028, the same year its contract is set to expire with Hilcorp.
The imports could add 10% to customer bills, Chugach Electric officials said in 2024.
The utility’s recent, preliminary applications to the federal government for the Canyon and Godwin creek projects say gas imports will “significantly increase costs for ratepayers, amplify reliability challenges, and introduce long-term reliability risks.”
Chugach Electric is also planning to build the largest solar farm in Alaska, a 10-megawatt installation at its Beluga Power Plant across Cook Inlet west of Anchorage. The project is looking to begin construction by July 4 to receive tax incentives kept in place for one year in the One Big Beautiful Bill. But it can go forward with or without the tax break, Julie Hasquet, a Chugach Electric spokesperson, has said.
At this time, Chugach Electric is no longer moving forward with efforts involving a large wind project, Little Mount Susitna Wind, Hasquet said. A private developer has proposed constructing that 120-megawatt wind farm across Cook Inlet from Anchorage. The utility had studied the project as a source of energy that the utility could buy.
Chugach Electric said the applications will help it take important next steps, including public comment periods, the utility said.
Chugach also plans to conduct site visits and feasibility studies to investigate the hydropower projects this year, launch a public website about the efforts, and study other possible projects, the utility’s statement said.
More details will be provided in the utility’s monthly newsletter in March, Chugach said.