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HomeMy WebLinkAboutSE intertie news artiles 2003JuneauEmpire.com:Local:Panel appr 5 intertie project 07/14/04 Click here to return to the original story Panel approves intertie project Wednesday,July 14,2004 By TARA SIDOR JUNEAU EMPIRE Alaska Electric Light &Power Co.can begin construction for a submarine cable on west Douglas and Admiralty islands to provide hydropower to Greens Creek Mine and Hoonah,the Juneau Planning Commission decided Tuesday. The commission approved a conditional-use permit for AEL&P to develop the termination yards that will serve as the starting points for the submarine cable system.The cable will run underwater from Douglas Island to Greens Creek Mine and on to Hoonah,40 miles west of Juneau with a population of about 860. Planning Commissioner Marshal Kendziorek called the project "excellent." No other commissioners commented. Juneau resident Nancy Waterman said she worries about the Douglas yard's outside lighting being on 24 hours a day,but otherwise supports the project.. Corry Hildenbrand,an engineer with AEL&P,said the lighting would be triggered by motion. "It's a wonderfully integrated system and I think extending it this way is important for our community to do,"Waterman said. The intertie project would bring hydroelectric power to the Admiralty Island mine and Chichagof Island community.The areas currently derive their electricity from diesel,a dirtier,costlier source. Hoonah residents pay 37.5 cents per kilowatt hour,City Administrator Jerry Medina said.A $300-to $500-per-month electrical bill is common for most homeowners,he said. "It's just killing us -not only business-wise but residential-wise,"Medina said. The new rate with hydroelectric power is still unknown but would be reduced substantially,Hildenbrand said.AEL&P supplies electricity to http://juneauempire.com/cgi-bin/printit2000.pl Page 1 of2 7/14/2004 JuneauEmpire.com:Local:Panel app _s intertie project 07/14/04 Juneau,which pays 8.5 to 9 cents per kilowatt hour,Hildenbrand said. Hoonah would connect to Juneau's power grid via submarine cable and overhead power lines,Hildenband said.AEL&P would sell electricity to Inside Passage Electric Co-op,which would sell electricity to consumers in Hoonah.The co-op runs the diesel generators for the city and was formerly Tlingit Haida Regional Electric Authority. The intertie project also supports Hoonah's plans to install a $1.2 million, 1-mile recreational road from the city line to Spasski Bay,Medina said. Overhead power lines would need to be installed with the intertie project, so the city decided to tie that into a road,Medina said. The intertie project to Hoonah costs $35 million and $2 million has already been secured through the Denali Commission,Hildenbrand said. If AEL&P gets the remaining federal funding,the cable could be installed next fall,he said. Another $384 million would be needed to tie in other parts of Southeast, he said.A Kake-Petersburg intertie would be next. The termination yards would contain switches,breakers and other electrical equipment to connect overhead electrical lines to the submarine cable.A 10-foot-high vinyl-clad metal fence topped with barbed wire would surround the sites.Video cameras also will monitor the areas. e Tara Sidor can be reached at tara.sidor@juneauempire.com. All contents ©Copyright 1997-2004 Juneau Empire,Morris Digital Works &Morris Communications ration Contact Us |About Us |Privacy Policy|Advertising information http://juneauempire.com/cgi-bin/printit2000.pl Page 2 of 2 7/14/2004 a fly |aa|Southeast :,ox Conference >4 -' The Newsletter of Southeast Alaska's Regional Economic Development Organization,EDD and RC&D Council Volume 3,Issue I April 2003 Board Members Southeast Electrical Intertie J.C.Conley -Ketchikan Gains Momentum President Murray Walsh -Juneau First Vice President osRobAllen-Sitka BiSecondVicePresident, Carol Rushmore -Wrangell Treasurer Maxine Thompson -Angoon Secretary Rosemary Hagevig -Juneau ii .:eet Director The Southeast Conference Intertie Committee hard at work. Robert Venables -Haines Director The concept of interconnecting the communities of Southeast Alaska has been Bob Ward -Skagway discussed for decades,but many communities are still 100 percent reliant on Director fossil fuel generation to meet their power requirements."We have an abundance Keith Perkins -Sitka of hydroelectric power available in Southeast Alaska,and the lack of an Director interconnected system has deprived MA€NY pupenemememeeeneeeees Bruce Jones -Petersburg communities from receiving the benefits of this "° Director renewable energy resource,”explained South-'Economic development Jeannie Johnson-Juneau east Caucus Chair Representative Peggy Wil-simply cannot occur with Director son."Many of our communities continue to power rates at these generate electricity with diesel fuel,which levels.”Staff takes a toll on both the environment and the Meilant Schijvens energy customer's wallet.”a | Administrative Director The Southeast Conference Intertie Committee voted to proceed with two Intertie Dave Cartson segments:Juneau to Greens Creek and on to Hoonah;and Petersburg to Kake. Intertie Coordinator Loren Gerhard Continued on Page 6 Projects and Policy Director : Administrative Assistant RC&D Staff First Intertie Segments Prioritized Page 1,6EricDeckerRegionalRoadsandFerriesReportReleased--Page 2 RC&D Coordinator News You Can Use _: Page 2 Paul Coffey Governor's Ferry Advisory Board Established --Page 3 Assistant RC&D Successful Mid-Winter Summit Page 4 Coordinator RC&D Update -Page 4 SEC Welcomes Two New Board Members Page5 Southeast Conference Members Page 5 Working for strong economies,healthy communities,and a quality environment in Southeast Alaska Regional |Roads and Ferries Report Released -..|@ An intermodal report titled Proposed Public Road and Ferry Projects 4 was recently released by Southeast Conference.The document was prepared in conjunction with the U.S.Forest Service for the purpose of identifying and cataloging various roads and ferry projects considered over the years to determine which projects deserve more scrutiny and potential funding.This document was created to assist in identifying aan potential transportation infrastructure to improve the economic climateEpmmintheregion.eet Southeast Alaska Transportation Plan Re-Evaluation:Many of theee84projectsdescribedareincludedintheintegrated,multi-modal trans-wet ackad portation system called for in the Southeast Alaska TransportationPlan(SATP).Other projects are in addition to,or propose an accelerated schedule for projects identifiedin the SATP with the intent of lowering AMHS ferry subsidy whileimproving service between communities and enhancing economic development.Southeast Conference supports a review and potential re-evaluation of priorities contained in the original SATP and its amendments. Process:Southeast Conference convened a committee to consider these projects,and the U.S.Forest Service offered technical assistance through their resources staff.Over many months and many meetings they reviewed data,discussed criteria for inclusion,determined what the final product ought to consist of,and developed a strategy for dissemination.The criteria was threefold:1)Projects must provide connectivity enhancement between communities -local roads excluded;2)Include projects connecting the region to the continental road system; 3)Projects must have at least some preliminary indications of support from the affected communities.The assembled document contains projects in three categories:projects proposed to connect communities;projects proposed to connect to the intercontinental road system;and projects considered,but not proposed at this time. neeat Copies of the report are available on line at www.seconference.org. News You Can UseSoutheastConference Household Hazardous WEBCee tailEventsfor2003HB] April 12-13th Sitka April 26th Craig,Klawock,Thorne Bay May 2-3rd Ketchikan May 10-1ith Wrangell July 18th Haines July 19-20th Skagway Other Key Southeast Conference Eventshaatfor2003a Sept.16 -18th Southeast Conference Annual Meeting in Haines Fall 2003 Southeast Alaska Funding Summit -Juneau By-Laws Update Under Review We are currently updating our By-Laws under the direction of By-Laws Chair Rob Allen.If you would like to provide Rob with your feedback to the By-Law amendments,they can be accessed at www.seconference.org/members/intro.html. The By-Laws will remain posted on the website for review by membership prior to finalization of the changes at the Annual Meeting. Trend Alaska:A Grant Resource Trend is a program of the Alaska Small Business Development Center designed to diversify and strengthen the state's economy by supporting small businesses in the innovation and commercialization of new technology. www.trendalaska.org www.seconference.org Don't forget to continue to check out our website.It is updated weekly,and provided up-to-date information and resources on issues that effect everyone in Southeast Alaska. 2 a Working for strong economies,healthy communities,and a quality environment in Southeast Alaska Murkowski Appoints Marine Transportation Advisory Board... We are excited to inform you of a major change in store for the Alaska Marine Highway System,and developments related to Resolution 03-10,calling for]-. continued efforts on management change for the AMHS.On April 17,2003, Governor Frank H.Murkowski appointed eleven members to the Marine Trans-|* portation Advisory Board to the Department of Transportation.The Governor created the Advisory Board upon the suggestion of Southeast Conference. Southeast Conference has been tracking the Alaska Marine Highway System since its inception more than four decades ago.During the Governor's campaign, he noted that he was looking to Southeast Conference to determine what measures should be taken to improve the System.Southeast Conference realized that this was the time for active solutions.Southeast Conference developed a concept to introduce a Board of Directors into the structure of AMHS.The Board Members would represent the various constituents of the system including labor,tourism,and commercial users as well as 5 seats representing the geographic areas served by the system. The Board's job is to provide input on marine transportation issues to the Commissioner of Transportation Mike Barton. "As a current and former resident of Southeast Alaska,!am reminded of the importance of marine transportation to the many cities here,”said Murkowski."I look forward to the input and contribution from the many qualified members of the Marine Transportation Advisory Board.” Although there is no "magic bullet"for the Alaska Marine Highway System,in many ways this is our golden opportunity to set a new course for the system.The board concept is kind of like "authority lite"in the words of Dave Kensinger, but provides the framework for substantial changes and hard choices. David Kensinger of Petersburg will chair the Board in addition to representing the commercial users of the Alaska Marine Highway System.Kensinger is the co-chair of the Southeast Conference Transportation Committee and is the owner and operator of Chelan Produce which provides service to Wrangell,Petersburg,Sitka and Kake.He is also part of the Petersburg Economic Development Committee.John "J.C.”a!Conley of Ketchikan will represent the southern part of Southeast Alaska.HeDuringtheGovernor's has served as Vice-Mayor of the Ketchikan Gateway Borough and is thecampaign,he noted that he was _current President of the Southeast Conference.Robert Venables of HaineslookingtoSoutheastwillrepresentthenorthernpartofSoutheastAlaskaandiscurrentlythe Conference to determine what Economic Development Director for the Haines Borough.He has served the last seven years on the Board of Directors for the Haines Chamber ofeeaaputetheSyerakentoCommerce,with two of those years as president.Venables is a Southeast °Conference Board member,and is the chair of the SEC Economic Develop- TTT Ment Committee.Meilani Schijvens of Juneau will represent the Southeast Conference.She is currently the Administrative Director of the Southeast Conference.She received a Master's Degree in Environmental Policy from the University of Oregon.Philip Taylor of Ketchikan will represent the employees'unions on the Alaska Marine Highway System.Taylor currently is the captain of the M/V Columbia, which serves part of the Alaska Marine Highway.He has worked for the Alaska Marine Highway System from twenty-nine years.Taylor was bom in Ketchikan and is a member of the Master,Mates and Pilots Union.Dennis Gray of Hoonah will represent the cities of Angoon,Hoonah,Kake,Pelican and Tenakee on the Marine Transportation Advisory Board.Gray received a degree in rural development from the University of Alaska, Fairbanks.He currently works for Sealaska Timber Corporation.Kenneth Gates of Cordova will represent Prince William Sound and the Kenai Peninsula on the Board.Gates currently is the CEO and General Manager for the Cordova Electric Cooperative.Dick Jacobsen of Sand Point will represent the southwestern part of Alaska including the Aleutian Chain and the Alaska Peninsula.Jacobsen was most recently the Mayor of Aleutians East Borough and has worked for the Aleut Corporation Fisheries Board.Len Laurence of Ketchikan will represent the Alaska Travel Industry Association.He has been an independent tourism consultant serving as the marketing manager for the Inter-Island Ferry Authority.Bob Prunella of Wrangell will serve as one of the two public members on the Board.He is the City Manager of Wrangell,a past member of the Wrangell School Board,and a past president of the Wrangell Chamber of Commerce.Susan Bell of Juneau will serve as the other public member of the Board.Currently she is a partner in the McDowell Group and had previously been the Vice President of Tourism for Goldbelt Incorporated.Bell has over twenty years of experience in the Alaska visitor industry. Working for strong economies,healthy communities,and a quality environment in Southeast Alaska Committee W ork Southeast Conference is proud to thank the many volunteers who participate on our committees. Many of our key decisions are made at committee level,and recommended to the Board of Directors for action.The following are our FY03 committees Economic Development Transportation Tourism Intertie Environment Fisheries Although some committees may already |be full,please contact us if you are interested in participating on one of our current committees! Successful Mid-Winter Summit =...... In March,Southeast Conference hosted our largest Mid-Session Summit to date in Juneau. The meeting provided an opportunity for committee and Board members to meet face-to-face on the numerous important issues currently facing Southeast Alaska.Some highlights included presentations by Governor Murkowski's Chief of Staff,James F.Clark;by George Rogers who has been a leading economist in the region for half a century;and by the Southeast Caucus which formed this year and made itself available to respond to questions from the membership. The membership also heard from recent Board President Tom Briggs in his new role of Director of Marine Operations for the DOT.The Board passed resolutions opposing the planning and development of fin fish farming in the Exclusive Economic Zone,and supporting a mining initiative. Resource Conservation &Development (RC&D) Program Update Paul Coffey and Eric Decker (SEC RC&D Coordinators)have been busy working on a variety of projects to promote economic development and help maintain our Southeast Alaska quality of life.These projects include:shellfish aquaculture and king salmon enhancement;updating the Southeast Alaska Comprehensive Economic Development Strategy;supporting and developing Watershed Councils to maintain and enhance salmon production while development occurs;and providing economic technical assistance to rural Southeast communities.For further information on these and other RC&D projects,or if you would like assistance on how to start a new project, please contact Paul in Craig at (907)826-5690 or Eric in Juneau at (907)463-3445. Southeast Conference Welcomes Two New Board Members wanting to become active with SE Bruce Jones Board Member Jeannie Johnson was elected to City and Borough of Juneau Assembly October 2001. Johnson serves as the Chair of Public Works and Facilities Com- mittee,and the Vice Chair of Gover- nor appointed Alaska Real Estate Commission.She is also the owner of J.Johnson Co.,Proper- ties."I am delighted to join the Board of Southeast Confer- ence,”Johnson explains,"I see Jeannie Johnson my role as an advocate to the entire region.|hope to show by example that Juneau Board Member Bruce Jones is the City Manager of Petersburg and sits on the Governor appointed Water and Wastewater Advisory Board.Jones' key interests are environmental.He has already been appointed as chair of the Southeast Conference Environ- ment Committee."My reasons for Conference stems from wanting to see a regional solid waste facility that keeps our resources in Southeast and puts our citizens to work.”Jones explains,"Regionally,our economy is poor and although !like to be optimistic about the future,| doubt we have yet to see the worst of it.The idea of coming together and solving problems regionally will benefit us all in the long-term.”Jones also hopes to participate in solutions to Southeast Alaska transportation problems.Jones rounds out the geographic distribution of the Board through his represen- tation of Petersburg,which was last represented by Linda L. Snow in 2000.Jones takes the place of President Tom Briggs who stepped down after he was appointed Deputy Commissioner of AMHS. understands and cares about the health and vitality of all of Southeast Alaska.”As a private pilot for 20 years, Johnson owns and flies a Cessna 172,and is an advocate for aviation throughout the region and the state.Johnson plans to be very involved in the tourism, transportation,and intertie issues."I look forward to rolling up my sleeves and working with this dynamic organization.”Johnson takes the place of long time Board member John Pearson who stepped down from the Board for personal reasons. Working for strong economies,healthy communities,and a quality environment in Southeast Alaska . FY 2003 Southeast Conference Members _...-..: Working Together for Southeast Alaska Communmes AND BorouGHs City and Borough of Juneau City and Borough of Sitka City and Borough of Yakutat City of Angoon City of Coffman Cove City of Craig City of Haines City of Hoonah City of Hydaburg City of Kaasan City of Kake City of Ketchikan City of Klawock City of Pelican City of Petersburg City of Prince Rupert City of Saxman City of Skagway City of Thorne Bay City of Whitehorse City of Wrangell District of Stewart Gustavus Community Association Haines Borough Hyder Community Association Ketchikan Gateway Borough Metlakatla Indian Community Naukati West Inc. CHAMBERS OF COMMERCE Alaska State Chamber of Commerce -Greater Ketchikan Chamber of Commerce Greater Sitka Chamber of Commerce Haines Chamber of Commerce Juneau Chamber of Commerce Petersburg Chamber of Commerce Prince of Wales Chamber of Commerce Skagway Chamber of Commerce Stewart/Hyder International Chamber of Commerce Wrangell Chamber of Commerce Businesses AND REGIONAL ORGANIZATIONS AEL&P Alaska Airlines Alaska Committee Alaska Forest Association Alaska Marine Highway System Alaska Marine Lines /Lynden Transport Alaska Municipal League Alaska Permanent Capital Management Co. Alaska Power and Telephone Alaska Services Group Alaska Ship &Drydock Allen Marine Tours,Inc. Angoon Trading Company,Inc. Bartlett Regional Hospital Boyer Alaska Barge and Towing Cape Fox Corporation Catholic Community Services Cellular One Central Council Tlingit &Haida Channel Construction,Inc. Chelan Produce Company Coeur Alaska,Incorporated FAV Icy Queen Inc. First Bank Frank Homan Gary Graham Inlandboatmen's Union of the Pacific Inter-Island Ferry Authority International Brotherhood of Electrical Workers JRC/The Alaska Club Juneau Economic Development Council Juneau Empire Kake Tribal Corp Karen Hofstad Kent Miller Ketchikan Indian Corporation Ketchikan Visitors Bureau Kootsnoowoo incorporated Loescher and Associates Madison Lumber and Hardware Mariner,Inc. McPhee Publications Inc. Merrill Lynch Northland Services,Inc. Organized Village of Kake P.O.W.Advisory Council Pacific Seafood Processors Association Peratrovich,Nottingham,and Drage,Inc. Point Sophia Development Co.LCC Port of Bellingham Sealaska Corp Service Auto Parts Shee Atica Incorporated Sitka Economic Development Association Southeast Alaska Regional Dive Fisheries Assoc. Southeast Stevedoring Southeast Strategies Southwest Alaska Municipal Conference Tenass Pass Shellfish Company Terry Miller Tlingit-Haida Regional Electrical Authority University of Alaska Southeast USDA Forest Service ”Wards Cove Packing Co White Pass &Yukon Route,Ltd. Wostmann &Associates,Inc Wrangell Medical Center Ziegler Law Firm * *'Southeast *Conference P.O.Box 21989 Juneau,AK 99802 www.seconference.org Phone (907)463-3445 Fax (907)463-5670 'ee :. Working for strong economies,healthy communities,and a quality environment in Southeast Alaska Southeast Electrical Intertie News continued trom page 1 "This is a huge step forward,” said Dave Carlson,Southeast Conference Intertie Coordina- tor."The Swan-Tyee Intertie project is underway and the project is close to being fully funded.It's time to begin seri- ous planning for other seg- ments within the proposed system.”The Southeast Conference was awarded a grant from USDA Rural Devel- opment to update engineering and feasibility studies.A re- port on the Juneau/Hoonah Intertie and Kake/Petersburg Intertie is due in April 2003 and the second phase report covering the entire Southeast Alaska Intertie Project will be delivered at the end of May 2003. High-energy costs are an economic burden in much of Southeast Alaska."Hoonah and Kake presently pay around 35 cents per kilowatt hour for electricity,which is very high,”noted Carlson."Economic development sim- ply cannot occur with power rates at these levels.”The transmission line from Juneau will also make available hydroelectric power for the Greens Creek mine that Southeast intertie Delegation in Washinton DC could displace approximately 5 million gaffons of diesel fuel annually.Over 400,000 gal- ions of diese!fuel would be @ displaced annually by the inter- 4 connection to Hoonah and the ]Intertie to Kake would displace over 300,000 gallons of diesel fuel annually.A power line has been constructed to the end of North Douglas Highway,said David Stone,Vice-President and director of consumer af- fairs for Alaska Electric Light &Power.The line to Admiralty Island and on to Hoonah will be a continuation of the existing line. Members of the Southeast Conference Intertie Commit- tee recently traveled to Washington,D.C.,to explore funding mechanisms for the two intertie legs.Governor Murkowski has included a $160,000 appropriation in the FY04 State of Alaska budget for continued work by Southeast Conference on the Intertie project.The Southeast Caucus of the state Legislature issued a statement earlier this month in unanimous support of the intertie project. USDA RURAL DEVELOPMENT.GRANT FUNDS SOUTHEAST INTERTIE UPDATE January 28,2003 For Immediate Release Contact:Dave Carlson,(907)772-4269 The Southeast Conference was awarded a $100,000 grant last week to update engineering and feasibility studies the Southeast Alaska Intertie Project,including the Juneau/Hawk Inlet/Hoonah and the Petersburg/Kake segments.The check was presented to conference officials during a meeting of the Southeast Conference Intertie Committee in Juneau by USDA Rural Development State Director Bill Allen. "We're looking to the future,”said Allen,who complemented committee members for working together to make the Intertie project a reality."I am pleased to present this check on behalf of President Bush,Agriculture Secretary Ann Veneman,and someone who is a real champion of this cause,Sitka Rural Development Manager Keith Perkins,”said Allen.The State Director and Perkins believe that the Intertie will reduce the need for costly fossil fuel generation plants.The clean,inexpensive hydro energy sources will then lower the cost of energy and promote economic development in the impacted communities. "This funding will allow us to move ahead on two Intertie projects,”said Dave Carlson,Southeast Conference Intertie Coordinator."We are studying the Juneau to Hawk Inlet to Hoonah leg and the Petersburg to Kake leg.Hoonah and Kake presently pay around 35 cents per kilowatt hour for electricity, which is very high.Economic development simply cannot occur with power rates at these levels.The communities we hope to link to the grid are dependent on fossil fuel which causes air pollution and creates a risk for environmental pollution through spills.” "Southeast Alaska has an abundance of hydroelectric power and the only thing that is keeping that hydro power from being shared throughout the region is the lack of a transmission line system,” said Carlson."The response to this effort so far has been overwhelmingly positive,”said Carlson."People understand the environmental impacts that are caused by having to rely on fossil fuel generation Carlson said the funding provided by USDA Rural Development is critical to getting the project underway.Among those on hand to receive the check from Allen was Southeast Conference Intertie Committee Chairman J.C.Conley from Ketchikan. Media:Pictures of Mr.Allen presenting a USDA check areavailablebye-mail by contacting Meilani Schijyens,Southeast Conference Administrative Director at (907)463-3445 (ext.27) er by e-mail at meilani@seconference.0rg Pa Cet ke w ,peed 4 cya ge THF L Photo:Southeast Conference Intertie Chair -J.C.Conley,Southeast Conference Intertie Coordinator - Dave Carlson,USDA Rural Development State Director Bill Allen Tay gAC Coke rae May 24,1999 ©Alaska Journal of Commerce ©Page 7 the same boat it'sin now,relying on substantial diesel gen-Ketchikan shouldn'tfoot billfor two Southeast hydro projectsEWPOINByBobWeinsteinvie For the Journal In Robert Loescher's April 8 article,"ete.wwowe "Mahoney Lake,intertie combination are™we ideal,”he proposed that Ketchikan proceed . with the construction of two hydroelectricityprojects:(1)the Swan Lake-Tyee intertie,which by con-., -necting two state-owned projects would allow Ketchikan . to purchase surplus power available at Tyee;and (2) Mahoney Lake,a hydro project in the Ketchikan area”proposed by Alaska Power and Telephone and Cape Fox.Corp.Mr.Loescher took his argument one step further by © -contending that "Mahoney energy should be accessed,ahead of intertie energy so that Ketchikan consumers.'don't bear disproportionate risks and costs.”I agree that both projects offer an opportunity for valu;2ableinfrastructureandsorelyneededhydroelectricenergy«to Ketchikan.I would furtheragreethat,under certain cir-: cumstances,construction of both the intertie and the Mahoney Lake Project would be ideal.Those circum-stances,however,would require that the intertie be con-- sidered as "a long-term infrastructure investment”and be* built at no obligation to Ketchikan ratepayers,who mean-°”while would be obligated to purchase Mahoney Lakepower.Since that scenario appears unlikely at this time,.the realityis that developirig both projects iis not economi-cally justifiable from a ratepayer point ofview.°.Earlier this year,Ketchikan Public Utilities requestedthattheAlaskaIndustrialDevelopmentandExport . Authority review a plan under which AIDEA would issue _bonds for the additional funding needed for the intertie, with debt service to be paid through purchase of electrici-..ty.AIDEA's reportis essentially an analysis of the eco-,;Nomic feasibility of the project,andis not an evaluation of .the intertie as "a long-term infrastructure investment.” -I would prefer that Ketchikan residents not be placed in the position of having to bear the costs of the Swan- Tyee intertie since,as Mr.Loescher noted,it benefits a number of communities and the state like a highway sys- tem.The intertie would provide reasonably priced power -_----_. "to Ketchikan residents,as well as benefit the state and _,the Four Dam Pool communities by generating extra rev-'enues from the sale of energy thatis currently not uti- lized.When viewedin isolation,Mahoney Lake may make sense.However,Ketchikan cannot commit to pur- .chase power to repay intertie bonds,while at the sametimeguarfantde'that it will:purchase.Mahoney LakepowerpriortoanyintertiépowerasrequestedbythedevelopersoftheMahoneyproject:As soon as Ketchikan_agrees to purchase power from one of these projects,theotherbecomieslesseconomicallyfeasible.I have no reason ,to believe anyone wouldissue bonds for an intertie project.if the revenues neededtoretirethe debt were diverted for.the purchase of power from another project.*Mr.Loescher also contended that a redesigned inter- "tieusing new technology could significantly reduce the"cost of the intertie project.Alaska Power and Telephone, _apartnerin the development of Mahoney Lake,has sug-.gested a new high-voltage DC technology developed inSwedenissuitablefortheintertie,using a modifiedroutethatwouldlargelyusesubmarinecable.It may bereasonabletoreviewtheconcepttodetermineifitcouldworkfortheintertieproject,but concerns remain.':First,Ketchikan's risk has been minimized by using adesignthatincorporatesproventechnology.The idea of abandoning this effort to rely on technology that claims a.single demonstration project in Sweden and a proposed -'project in Australia is troubling.Second,Ketchikan Pub-.lic Utilities has'expended considerable financial. :resources for the design,environmental studies,and fed- eral permitting of the intertie project.Even if the tech- --nology appears feasible,there remains a question as to ,whether a new environmental impact study would be ..required-at significant cost and with significant delay.©Ketchikan'does.consider the development of local _hydroelectric resources,such as MahoneyLake,a reason-able backup.strategy.:Unfortunately,the community's available unused hydroelectric resources are relatively_small In fewer than 20 years,Ketchikanwouldbebackin eration for the community's isolated electrical system. Swan Lake,with nearly twice the capacity of Mahoney Lake,was fully utilized after only 10 years.Solving our energy shortfall by constructing that intertie and taking advantage of surplus energy at Lake Tyee is the key torealizingthefirststepinaSoutheastAlaskaelectricgridconnectingallourcommunities,as well as the first step toprovidetheenergynecessaryforKetchikantohaveareal--istic chance of diversifyingandrebuildingits economy..-Bob Weinstein is mayor ofKetchikan. a, eryps aeS&SwR eotk>ahh beSEEMSis&PLO o wN\salrc/s FAXNO.02P,0203151APR-9-99FRIJUNEAU EMPIRE,THURSDAY APRIL 8,1999 RowtonDenvaeDarioKetMahoneyLake,intertie combination are idealByROBERTW,LOESCHER Ketchikan is the most fortunatecityinAlaskawhenitcomestoelectricalenergyresourcesforto-day and the future,if only Ketchi-kan Public Utilities will seize theopportunitiesbeforeit.These op-portunities are: e The Mahoney Lake Project,'fo be buill by Ketchikan ElectricCompanywithnolocalorstatefunding,will provide 1¢mega-watts capacify and more than 40millionkilowatt-hours of energy ayearatafixedratelowerthanthecostofSwanLakeenergy.e A redesigned transmissionlimebetweentheSwanLakeandtheTyeeLakeHydroProjects,Which can be built at 50-60 percentEKPU's $77 million cost.estinnatefortheintertie. ;...Last year alone,KPU producedabout27millionkilowatt-hours of energy by diesel generation,dem-onstrating the utility needs hydro-electric generating capability.TheMahoneyLakeprojectwilldis-place diese!and allow KPU tomeetKetchikan's immediate andmid-term electrical needs from re-newable,non-pollufinghydroelectricity,including the ex-isting Swan Lake project.Mahoney is privately financed.KPU will have access to Mahoneyenergyandcapacitywithnonewinvestmentorbondissues,whichwouldberequiredforthemuchsmallerConnellandWhitmanLakesprojectsKPUisspendingmoneyfoinvestigate,All the investment and riskswillbebornebyKEC,a privatecompanyownedbyCapeFoxCor-poration and Alaska Power &Tel- |envy Ketchikan sitting on the thresholdofthesetwoprojects. ephone Company.KEC offeredKPUenergyatarateof6.5 centsperkilowatt-hour,with no escala-tion for the life of the contract,which is confempltated to last for10-35 years.KPU now pays theFourDamPoolrateof6.8 centsforSwanLakeenergy,and theFourDamPoolestimatesthatratewillriseannuallytomorethan7.5 cents by the year 2007,The Mahoney Lake Project willbeginproducingpower14monthsallenGPU,executes .a,,contract, The.Federal Energy,Regulatory(Gommission has licensed the pro-"ject,and KEC can build it for $17.5million,a bargain for a 10-mega-watt hydro plant.The project isJargelyonCapeFoxlands,andonlyfourmilesofintertieisneed-ed to connect it fo the KPU systematBeaverFalls, AP&T,Cape Fox's partner inKEC,built the Black Bear Lakeproject(serving Prince of WalesIslandcommunities)and GoatLakeproject(serving Haines andSkagway)within the past fiveyears,on time and within budget.AP&T provides electric service for20communitiesinSoutheastandInteriorAlaska,and telephone ser-Vice for 19 communities, Mahoney Lake will fill Ketchi-kan's immediate need for hydro-electric power,and will enhancetheviabilityoftheproposedTyee-Swan Lake intertie,which KPUhasbeenpursuingfomeetlong- term demand and to connect with an envisioned Southeast Alaska power prid. Recent discussions of theintertiebavebeentoonarrowlyfo-cused,tending to view the intertiesiricllyasasourceofpowerforKetchikan,and Mahoney Lake asanunwantedcompetitor.It's morebeneficialfoseriouslyconsiderlo-cal possibilities for hydropower -especially those that are privatelyfinanced-and to view the intertie as long-term infrastructure that-allows _power {o.flow.-freely in ei-ther ..direction,.throughout Southeast.This is particularly impor-tant to Ketchikan,given that Ma-honey Lake hydropower is cheap-er for Ketchikan consumers than would be Tyee power imported ontheintertie. If Mahoney energy is not ac-cessed by KPU ahead of intertie energy,Kefchikan consumerscouldshoulderadisproportionateshareoftherisksandcostsoftheintertie,which would be unfair,given that the inlertie is a basiclong-term infrastructure invest- ment.Like a highway system,itWillbenefitallSoutheastAlaska communities. Connecting Mahoney Lake viatheBeaverFallstransmissionline means increased reliability forKetchikan.If either Swan Lake ortheinterliegoesdown,the Maho-ney line will remain operating.Over the past several years,KPU has spent millions of dollars on studies of a traditional high-ten-sion,tall-tower intertie between the Swan and Tyee projects,nowprojectedtocostabout$77 million. 1 envy Ketchikan sitting on the-threshold of these two projects.Mahoney Lake can provide hydro-power at no public risk and cheap-er than the Four-Dam Pool,withinfilflemorethanayear.The redeSignedintertie,constructed under 4 more realistic plan of finance,could be in place within four orfiveyears,when Ketchikan'sgrowingpowerrequirementswillrequireit.When both projects areCompleted,Ketchikan's long-term'access fa local and regional all-hy-.dro energy will put the city inapreeminent:.position.-to.:maintainthedowest-achievable:costof liveing,and to attract vigorous eco-nomic development.-' As the CEO of Sealaska Corpo-ration,I manage our considerableinvestmentsandjobsinSoutheastAlaska,and am responsible forconsideringfuturecorporatede-velopment in our region.I urgecityofficialsandcitizensaliketodirectKPUtoseizetheday,andtakeadvantageoftheseripeop-portunities to provide cheap andefficienthydroelectricpowerasamajorincentiveforfutureeco- nomic development in KetchikanandthroughoutSoutheastAlaska, esene Robert W.Loescher is Presi- dent and CEO of Sealaska Cor- poration and a member of the Boards of Directora of the Alas- ka Industriel Development andExportAuthority(AIDEA)and the Alaske Energy Authority. Quality Services (907)274-1056 Dae OCT 17 1998 KETCHIKAN DAILY NEWS Client No.Z go KPU New alo 436A 310 By SCOTT BOWLENDailyNewsStaffWriterKetchikanPublicUtilitieshas dropped along-standing finance plan for the Swan Lake-Tyee Lake electrical intertie and now is askingthestatetobondfor$45 million to help build the project.Securing the funding is KPU's final obstaclebeforeconstructionofthe57-mile transmis- sion line can begin.The local municipal utilityhascompletedthedesign,federal environmen-tal impact statement and most of the requiredpermits.: "We are ina position to proceed -except forthedollars,”said KPU General Manager John Magyar.KPU is turning to the state after an indepen- - dent analysis showed that the earlier fundingplan-through which KPU would own theintertiewhiletakingonmorethan$20 millionindebt-might actually raise KPU's costs forelectricityandhamperitsfuturebondingabil- iYahe new funding proposal asks the state tosell$45 million in bonds to help pay for theintertie,which the state would then own.The plan also identifies an existing intertie-related"revenue stream”that could be used to repay the bonds.: The remainder of the project's estimatedtotalcostof$77 million would be paid mostly byfederalandstategrantmoneyalreadyavailabletoKPU.Sales of timber from the intertie route is expected to contribute another $3.8 million. turns to state for intertie lan requests $45 million bond to build electrical project Although it appears simple on paper,MagyarandstateSen.Robin Taylor,R-Wrangell,saythenewfundingplanwillfaceatoughfightintheLegislature. Building the intertie is essential forKetchikan's economic future,said Taylor.It'snotaneasysell,though,in part because the newfundingproposalcouldreopenahostofoldenergyissuesandemotionsonthestatelevel. "It's just impossible to talk about it without talking about all the players and factions,"Taylor said.Anelectrical transmission line between Swan Lake on Revillagigedo Island near Carroll InletandLakeTyeeneartheBradfieldCanalhasbeendiscussedsinceatleast1980,when a linkSee'Southeast intertie,''page A-4 .KPU:Swan:TyeeIntertie Projecrg® Former Funding Plan |=:}-Current Plan Project cost $73,200,000 $73,200,000 [Authorized/ReceivedtoDate | State Grants $11,200,000 $11,200,000 Federal Grants $9,900,000 $9,900,000 State Loan 1 $20,000,000 |Pending HE =cE E 2 Be Eensiogeny UU pe heute 4 Federal Grant 2 $7,500,000 $7,500,000 State bonds $o $44,600,000 lTotal eee ee ee Eee } $48,600,000 $73,200,000 |Funding still needed coe ahi pe eet de SE $24,600,000 $0SourceNocommitmentstodateNonerequired [Ownership of Finished Project.|] Ketchikan Public Utilities State of A Source:Ketchikan Public Utilities.Would need approval fro4 Phi- kan voters.2 Anticipated in federal fiscal year 1999. ¢7) o Soutii east intertie% 216M 420 S10 330 -b20e obsawasconsideredasanalternativetothe|.[& proposed Swan Lake dam project.The power line would have broughtLakeTyeeelectricitytoKetchikan.Butthelinewasn't built,and in 1984 the state began constructing the Swan Lakedam,which now produces most ofKetchikan's hydro-electric power.The Lake Tyee dam,completed aftertheSwanLakedambeganservice,pro-duces electricity used by PetersburgandWrangell.But those communities consume only about one-third of the dam's hydroelectric potential,accord- ing to KPU information.Untapped potentialThatuntappedpotentialhasattracted KPU's attention at a time when Ketchikan's demand for electricity hasbeenincreasing.According to KPU pro-jections,the intertie would satisfy areademanduntilatleast2014-and per-haps much longer if demand proves to °be less than the highest projected level.KPU alsois considering smaller hy-dro-power projects in the immediatearea.They include projects at Whitman,Connell and Carlanna lakes,the Mahoney Lake project proposed by the Cape Fox Corp.,an upgrade of the exist-ing Beaver Falls facility and an intertie with Metlakatla. If all of those smaller projects werecompleted,demand still would exceed the supply by 2022 if demand actually reached the highest projections,accord- ing to KPU. "At that point,we would need the Swan-Tyee Intertie to access the next .curred after the intertie was built.major cost effective hydroelectric re- :A view of the lakeside of Swan Lake dam,where Ketchikan gets mostofitshydroelectricpower.oS |Staff Photo byHall Anderson started the permitting and engineeringprocessesin1994andhassincecom- pleted most of those.To build the intertie,KPU developedafundingplanthatcalledfortheutility to take on debt to pay for some of theconstructioncosts. Part of that debt would have been a $20 million state loan with an interest rate of 3 percent.The 15-year loan has been approved by the state,but KPU also would need the approval of localvoterstoaccepttheloan,which would be repaid by KPU electric revenues.Another debt would have been in- 'I think it will be a difficult task. -,..[think it will take a significant commitment on the part of the governor,anda signification con- tribution from the interested par- ties and our state Legislature.'4 KPU Manager John Magyarsource,”wrote Magyar iin amemo to the ..Pool,a group of four municipal utilitiesKetchikanCityCouncilinFebruary.Beyond Ketchikan,the utilities inSoutheastAlaskaviewtheSwan-Tyee intertie as the first major step toward aregionwidepowergridthatwouldallowenergytofollowdemandbetweencom-munities.The first funding plan"After a series of studies bolstered the veintertieconcept,the state Legislaturein «1993 approved a combination of loans,©grants and bonding for the project.KPU KPU is a member of the Four Dam across the state that each pay the samepriceforpowerproducedatoneoffourstate-owned dams (such as Lake TyeeandSwanLake}.Under a proposed power sale agree-ment for the intertie,KPU would paytheFourDamPooltheusualrateminus several intertie-related costs for.powsrreceivedthroughtheproject.=”Lowatfirst 9.However,KPU forecasts that demand for electricity would be low in theintertie's early years,and that KPU's intertie costs would be more than the utility could generate from selling inter- tie power to customers. In order to pay the Four Dam Pool forthepowerandsomedebt-related ex- penses,KPU was requesting a "start-up” loan from the Alaska Industrial Devel- opment and Export Authority. The balance of the AIDEA loan was projected to grow over time to about$13.7 million in 2015,when demand was projected to catch up and then earn enough money to repay the loan byabout2021. Debt possibleHowever,KPU staff voiced concernsinFebruarythattheutilitywouldhave .a problem if the anticipated demand didnotmaterialize. "A short-term loan through AIDEA would allow us to meet our expenses during years of low load in the first yearsofintertieoperations,”wrote Magyar."But we are depending on load growthinlateryearstopaybackthatloan.Iftheloadgrowthdoesnotdevelop,we couldbeleftwithasignificantdebtattheend of the loan term." The potential new debt load also drewacautionarycommentfromA.Dashen&Associates,the Bellingham,Wash.-based financial advisory firm that re-viewed KPU's funding plan earlier this year.Several negativesNotingthatKPUhadnearly $37 mil-lionin outstanding debt at the end of1997,Alan Dashen wrote that "the $20millionstateloansignificantlyincreases'the debt of the'system."*'-0 WrennDashenlistedseveralnegativesofthe funding plan,including the potential of higher electric costs in the first years after the intertie was built.And,KPU might find it difficult to obtain newfinancingforotherprojectsafterassum- ing the intertie debt.The cumulative weight of the nega-tives was sufficient for KPU to scuttlethefundingplan."At this time,I don't think it's fair toaskthevoterstotakeonanadditional $20 million in debt,"said Magyar re- cently after relaying the concerns to theKetchikanCityCouncil.However,he quickly added that theintertieprojectwasn't dead,and that theutilitywasworkingonanotherfundingplan.The new funding proposalThenewplanwaspresentedto andunanimouslyapprovedbytheCityCoun-cil on Oct.1. It asks that the state issue bonds for $45 million,which would be used in conjunction with the state and federalmoneyalreadyinhandtobuildtheproject.The state,not KPU,would own the intertie. And rather than KPU shouldering the debt burden,the new proposal suggestsusingaspecificexistingsourceoffund-ing to repay the state bonds.The Four Dam Pool pays about $11millionannuallytothestateforpowergeneratedbythestatedams.Forty per-cent of that,about $4.4 million each year,goes into a fund created by thestateLegislaturein1993topayfortheSwanLake-Tyee Lake intertie.KPUis requesting that the state usethat$4.4 million each year to repay the proposed $45 million bond debt."We're not asking for any newmoney,"Magyar said."We're asking ... that the state just take that 40 percent asarevenuestream(to pay off the bonds}.City of Ketchikan Mayor BobWeinsteinsaidMondaythathedoesn't view the change in funding plans as a setback. "I view it as a better alternative for completing the intertie,"Weinstein said...Itmay be a win-win-win situation fortheratepayer,the Four Dam Pool,andthestateitself.” The new plan also has the support oftheothercommunitiesinvolvedinthe Four Dam Pool (Wrangell,Petersburg,Valdez and Kodiak}said City Council Member Tom Friesen on Monday. A good ideaFriesen,who has long been involved in utilityissues,said Monday that it's agoodideatousethealreadyexistingmechanismtorepaythestatebonds.Overall,"I think it's the most reason--able.fundin (plan)I've seen,”Friesensaid.*{think it's a good funding tool.”The new plan will be included as a lobbying item when the Ketchikan area's legislative liaison group visits with state officials later this month in Juneau.On the state level,it's the Legislature that would make the funding decision, said Magyar.KPU also will request thatthegovernorputtheintertieiteminthe budget he submits to the Legislature. Not an easy sellAlthoughtheprojectand fundingplanhaveseveralbenefits,Magyar saidhedoesn't think it will be an easy sell."I think it will be a difficult task,”he said.”...I think it will take a significant commitment on the part of the gover-nor,and a signification contributionfromtheinterestedpartiesandourstate Legislature."Sen.Robin Taylor agrees with Magyar's assessment,saying several factors will play a part in the outcome.Some Railbelt legislators have hard feelings over long-past decisions regard- ing Railbelt energy projects -and somemorerecentonesregardingenergyin Southeast Alaska,said Taylor.It will take some political muscle to pull the intertie through the Legislature,said Taylor.He believes that much of the outcome will hinge on the positionsthatheandDistrict1Rep.Bill Williams,D-Saxman,will have after the Legisla-ture reorganizes following the Novem:ber elections.In the previous session,Taylor wassenatemajorityleaderandchairoftheSenateJudiciaryCommittee.Williams,who could not be reached for commentforthisstory,served as chair of the House Transportation Committee..Appreciates help Meanwhile,Taylor said he appreci-ates the help of the Alaska Congres-sional Delegation in securing federal money for the intertie.Noting that fed-eral money paid for much of the Lower 48's energy infrastructure,Tayloraddedthatfurtherfederalmoneywouldbehelpful."Interties are very difficult to fundlocally,and they're difficult for the statetofund,"Taylor said.Magyar said KPU continues to pursu- ing further federal funding..