Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966


Competing outfits vie for hydro job


Two Southeast developers are interested in constructing a hydroelectric operation at Walker Lake, but who gets first priority is in the hands of the Federal Energy Regulatory Commission.

Southern Energy, Inc. – owned by John Floreske Jr. of Haines – and the Tlingit and Haida Regional Electric Authority have both applied for preliminary permits for the Walker Lake dam project. Records on FERC’s website indicate Floreske applied for the permit in January 2012, while THREA applied in June.

THREA was reorganized to an electric cooperative known as Inside Passage Electric Cooperative, Inc., in 2004.

Pete Bibb, operations manager for IPEC, said the preliminary permit determines who is first in line when applying for the actual FERC construction permit.

“It really just gives you a place position. It doesn’t necessarily mean you can construct it,” Bibb said.

Competition for the preliminary permit has resulted in regrettable tension between the two applicants, Bibb said.

“When we really step back and look at it, we just want it built. And unfortunately there was this competing atmosphere, and we’re in the process of trying to resolve that between John Floreske and us,” he said.

Documents from FERC’s website indicate Southern Energy filed an objection to THREA’s preliminary permit application on  June 20, claiming THREA is an “‘illegal applicant’ that is not qualified to conduct business under Alaska law.”  

Southern Energy asked FERC “to refuse to accept THREA’s application for filing or, alternatively, to deny THREA the ‘municipal preference’ available to political subdivisions,” wrote Richard George, THREA’s chairman of the Board of Commissioners, in a response to Southern Energy’s objection.

  Municipal preference refers to a provision in the Federal Power Act giving priority for permit applications to public entities over private ones.

  “THREA’s application is valid,” George wrote, “and THREA is entitled to have its application considered in accordance with Congress’s desire that public applicants be afforded a preference over non-public applicants.”

  Floreske said he is “patiently waiting for a FERC decision on the preliminary permit” but would not issue further comment.

Bibb said the two developers have been discussing solutions to the competition, including a possible joint venture or one party rescinding their permit application.

“That is what is being discussed now. Unfortunately things happen that generate obstacles like this. There are people involved. It’s unfortunate it happened this way,” he said.

IPEC CEO Jodi Mitchell said the board will meet Dec. 10 to discuss the matter further.