Alaska Power Company’s Kasidaya hydroelectric plant sustained damage last month that the utility says will be passed along to consumers absent state intervention.
According to a letter from the company to local and tribal governments, the damage to the plant was caused by multiple avalanches around the facility following heavy precipitation around New Year. The letter also requested area governments include the company’s damages in requests for state disaster-relief funding. The privately-owned utility, a subsidiary of Alaska Power and Telephone Company (AP&T), is the sole large-scale electricity producer for the Upper Lynn Canal.
The remote plant, located on the eastern side of Taiya Inlet, is not accessible by road, and AP&T vice president of corporate development Jason Custer said the company won’t be able to “fully assess” damage to the facility until ice and snow melts.
Custer also said the plant would not ordinarily be operating at this time of year due to low winter water flow at Kasidaya Creek, which powers the plant.
The company’s letter to area governments said anticipated damages are expected to exceed the facility’s insurance deductible limit of $500,000.
As a private utility, Alaska Power Company is not eligible for the state’s public assistance disaster relief funding — the emergency funding source the Haines Borough plans to use to pay for extra costs from this winter’s snowfall, including plow overtime.
The state’s public assistance funding goes mainly to municipal governments, tribal governments, and nonprofits, DEC spokesperson Jeremy Zidek said in January.
Haines Borough manager Alekka Fullerton said Tuesday state officials told her they may consider “some kind of exception” in this specific case due to the fact that Haines Borough residents will otherwise be on the hook for the damages.
Custer echoed that message, saying that if the utility “can find a disaster relief source to pay for it we won’t have to charge the ratepayers for the damage.”
The potential for increased consumer costs comes as the state’s regulatory authority for utilities is set to decide on a separate potential rate increase for the Lynn Canal.
In that rate case, first filed in 2024, the Alaska Power Company is requesting a 69.92% increase to residential electricity rates to pay for damage to an undersea cable between Kasidaya and Skagway.
Although privately owned, as a utility, the company must have all its rate increases approved by the Regulatory Commission of Alaska.
The borough of Skagway is challenging the still-pending rate increase, including on the grounds that the utility did not have adequate insurance coverage for the cable.
For the past year, while the case has been pending, consumers have been paying an interim 40% increase over 2024 rates. Consumers will be reimbursed for interim costs if the final rate increase comes in lower than 40%.
The Regulatory Commission of Alaska will decide on the increase no later than March 13.