Alaska Power and Telephone pulled the plug on the Connelly Lake hydroelectric project, surrendering its Federal Energy Regulatory Commission (FERC) preliminary permit for the project June 13.
The primary factor in the company’s decision is that existing demand for power isn’t sufficient to build the project and maintain or lower local rates, said project manager Glen Martin. Local opposition and difficulty securing funding also were obstacles, he said.
AP&T isn’t giving up on the project. “It’s not going off our radar, but we’re not going to be spending resources on it. It’s something we hope down the road when there’s a greater load that we can bring forward again. It’s really the only large storage project that we can identify in the area at the Haines end,” Martin said.
At this time, AP&T won’t be pursuing alternative energy projects in Haines, Martin said. “Wind is a problem for the Haines area because of your large bird population. It’s not something we’d get very excited about pursuing.”
AP&T has been pursuing Connelly Lake for several years. In late 2010, the utility applied for grant funding from the Alaska Energy Authority (AEA) and received $468,000 in July 2011 (the company added $117,000 of its own money, for a total of $585,000 to be spent). The utility started work on field studies in October 2011.
When AEA funded the project in 2011, it gave the project the highest possible score for public support. Initially, the company had solicited letters of support, which poured in, Martin said.
However, once the project was required to post public notice of the company’s intentions, resistance began. “Once we entered into the FERC process in 2011 and the project was public noticed, there were significantly fewer letters of support due to those against the project having the opportunity to voice their concerns,” Martin said.
AP&T was unable to secure a second round of funding from AEA, due to insufficient progress and lack of public support.
Local environmental group Lynn Canal Conservation (LCC) has been a vocal opponent of the project. Potential damage to the Chilkoot fishery and Alaska Chilkat Bald Eagle Preserve were two of its main concerns.
LCC treasurer Scott Carey said in an interview this week the group was pleased about AP&T’s decision, and that the community should be proud it held the company to a high standard throughout the process.
“I thought it was interesting that they said lack of public support was part of why they pulled out or dropped their permit. I think that’s a good thing. The community should be glad that they were able to have an influence on a big project like this,” Carey said.
AP&T recently tried gaining traction on the project, asking the Haines Borough for a resolution supporting Connelly Lake with the caveat that future studies would show development was environmentally sound. The Chamber of Commerce board was also prepared to vote Friday on whether to pen a letter of support for the company’s completion of feasibility studies.
But even with the letters, “there’s no guarantee that we’d still be able to (get AEA funding),” Martin said.
A major hurdle for the project was securing state approval to build a power plant in the eagle preserve. That would have required special action by the state.
Mayor Stephanie Scott said she was disappointed by AP&T’s decision. “I thought we were going to have a conversation, and it’s always been my intention or hope that we could be partners with AP&T in some meaningful way. And all of a sudden, we weren’t.”
Scott has called for a meeting between AP&T representatives, the Haines Borough, the Skagway Borough, the Haines Chamber of Commerce and the Tlingit and Haida Regional Electric Authority (THREA) to “take another hard look at our near-term power supply.”
“The purpose of the meeting would be to anticipate costs and to continue to forge meaningful partnerships to ensure a reliable and affordable supply of electrical energy in the Upper Lynn Canal,” Scott said.
A date for the meeting has not yet been set.
Regarding power supply, Scott said, “Haines is in a tight spot, but not a crisis. We peak out and we have to run diesel. That’s what we have to pay attention to right now.”
Scott also invited Sue Libenson to the impending meeting. Libenson is a Haines resident who recently wrote an energy policy paper for the Alaska Legislature. Libenson said AP&T’s withdrawal from the Connelly Lake project gives the region an opportunity to step back and analyze power demand as well as supply issues.
Reducing consumption by means such as weatherization or using energy efficient appliances could help address the power issue on the demand end. “We found that far and away demand reduction pays and creates more jobs than creating new power sources,” Libenson said.
AP&T maintains that energy demand from the area will eventually lead to a large hydroelectric project. “We’re trying to be forward-thinking, and you don’t want to necessarily wait until you have a huge demand and residents or businesses are suffering,” Martin said.
Plans for a smaller-scale hydro project at Walker Lake are continuing. FERC recently granted a preliminary permit to the Tlingit and Haida Regional Electric Authority, which will discuss its plans for the project at an upcoming board meeting.
Mayor Scott said she’s watching to see what THREA does next. “I think it puts a lot of pressure on the Walker Lake proponents; that’s who I think might feel a little bit of pressure, and I want to support them. I think it’s a reasonably-sized project, and I think it’s important for Haines.”
“I certainly don’t want to lose that one,” she added.