After squabbling with a local developer for more than two years, the Tlingit and Haida Regional Electric Authority board has decided to relinquish its preliminary permit for the Walker Lake hydroelectric project.

THREA and John Floreske’s company, Southern Energy Inc., jockeyed for the Walker Lake permit until the Federal Energy Regulatory Commission granted it to THREA in June 2013.

  Since then, THREA has been unsuccessful in securing funding for the project, which would produce 3,615 megawatt-hours of energy annually using a dam at Walker Lake, about 30 miles northwest of Haines.

  THREA hasn’t yet submitted the paperwork to FERC. Its board members voted in July to forfeit the permit.

  Southern Energy owner Floreske said this week he is “waiting patiently” for the official paperwork to be filed with FERC. “I’m still very interested in the project,” Floreske said.

According to FERC spokesperson Celeste Miller, Floreske will have to apply for another preliminary permit for the project even though he already submitted one and was beat out by THREA.

  THREA was reorganized to an electric cooperative known as Inside Passage Electric Cooperative, Inc. (IPEC) in 2004. THREA and IPEC have the same board members, but THREA is a nonprofit owned by the central council, while IPEC is a cooperative owned by customers, said IPEC CEO Jodi Mitchell.

  For three years in a row, THREA tried to get grant money from the Alaska Energy Authority for the project. During this latest round of funding, it asked for $700,000 and was again denied.

  “We finally decided that was enough,” Mitchell said.

  AEA cited several reasons for not funding the project, including that it wouldn’t likely result in lower rates for customers.

  “While the application states that THREA will sell its power to IPEC below the APC rate, it is highly likely the cost of power from Walker Lake would exceed that purchased from APC unless the project was fully funded with grants, given the rising costs of FERC licensing and construction for new hydro projects,” AEA stated.

  The demand for Walker Lake power also would be just a fraction of the project’s potential, AEA said in response to THREA’s grant application.

  Mitchell said THREA decided to focus its resources on other projects, like the run-of-river Gartina Falls hydroelectric project in Hoonah.

  “(The board) thought it was better to go after one or two bigger projects than a bunch of small ones,” she said.

  After receiving notice of THREA’s decision to forfeit the permit, former Mayor Stephanie Scott emailed the Haines Borough Assembly and Mayor Jan Hill urging the borough to further investigate getting involved with Walker Lake.

  “I recommend that the Haines Borough take steps to secure Walker Lake and to request that it be ruled non-jurisdictional by FERC. This may take the form of partnering with other parties who wish to move this project forward. We talk frequently of ‘public-private’ partnerships. The development of Walker Lake Hydro may be a place to apply this concept,” Scott said.

  Southeast Conference energy coordinator Robert Venables said he doesn’t know about the borough getting involved in the project.

“I think the borough obviously has that option, but at some point you have to let the private sector do what the private sector does best,” Venables said.

  With Alaska Power and Telephone focused largely on Skagway’s West Creek project and Connelly Lake on the backburner, it’s unclear where Haines and Walker Lake fit into the hydroelectric picture right now, he said.

  “Walker Lake, while it isn’t clear what, if any, role it will play in the future, is a resource we want to better understand,” Venables said.