By Jenny Neyman
Redoubt Reporter
The Alaska Energy Authority’s recent rejection of a $4 million Renewable Energy Grant application to fund construction of a proposed hydroelectric dam on Grant Creek in the Kenai Mountains near Moose Pass may have been a matter of putting the cart before the horse, but has not resulted in unhitching the project.
Work will continue on conducting field studies, applying for licensing from the Federal Energy Regulatory Commission and pursuing construction funding.
“HEA continues to be enthused about the feasibility of developing a low-impact Grant Lake hydroelectric project and the renewable energy that this project would add to HEA’s generation portfolio,” said Joe Gallagher, spokesman for Homer Electric Association, in an emailed response to questions about the AEA funding decision.
Kenai Hydro, LLC is a subsidiary of HEA, formed to investigate the feasibility of constructing hydroelectric projects on the Kenai Peninsula. Initially, in 2008, four sites were considered, Grant Lake, Falls Creek, Crescent Lake and Ptarmigan Lake, all in the mountains near Moose Pass, and all connected to the Kenai River drainage. Economic feasibility was found lacking in all but the 4.5-megawatt Grant Lake project, and development work on that site has continued.
Much of Kenai Hydro’s work has been supported by funding through the Renewable Energy Grant program, administered by the AEA and established by the Legislature in 2008 to provide assistance to utilities, independent power producers and local and tribal governments in researching and developing renewable energy projects in Alaska.
Kenai Hydro got $100,000 for a reconnaissance assessment, $816,000 in round one of Renewable Energy Grant funding, plus another $1,184,000 in round four. The application period for funding in round five closed in August, and Kenai Hydro submitted a request for $4 million in funding for project construction.
The AEA recommended no funding for the request, citing five concerns about the project:
- That final design funding is premature, since FERC licensing hasn’t been applied for, much less approved.
- “There is significant public opposition to the project,” according to AEA review comments.
- Unresolved questions regarding costs to mitigate certain projected impacts of the project.
- That the FERC licensing process may result in constraints on operation of the project that may “significantly impact the amount of energy that can be produced.”
- And that Kenai Hydro “does not demonstrate site control at this time.”
“My own sense is I always felt that it was premature to ask for construction funding given that the fieldwork hasn’t been completed yet for the project and none of us really know what that fieldwork is going to tell us,” said Mike O’Meara, spokesman of the HEA Members Forum. “Secondly, they haven’t even applied for the FERC license yet. It (applying for the grant) just didn’t seem like an appropriate thing to do at the time.”
By the August 2011 deadline for round-five Renewable Energy Grant funding, Kenai Hydro’s Grant Lake project was — and still is — in the planning and research phase. Fieldwork has been carried out in 2009 and 2010, and another round of studies is scheduled for 2012 on the topics of aquatic, water, terrestrial, cultural, visual and recreational resource. The future timeline calls for completing winter field studies, finalizing study reports and filing a draft FERC license application in 2013, with the final FERC license application anticipated to be filed in February 2014, according to Gallagher.
The decision to go ahead and apply for construction funding now was made with the realization that the future of the grant fund is uncertain.
“Recognizing that this was the last year for the Renewable Energy Grant fund with no guarantees for future legislative funding, (Kenai Hydro) elected to submit a grant application for construction funds that was contingent upon obtaining a FERC license. Given the competitive grant field and the limited funds, (Kenai Hydro) can understand why AEA chose not to recommend funding of construction at this time. We are working with our legislative delegation to support future Renewable Energy Grant programs (House Bill 250) and we are confident that once we obtain a FERC license that AEA will be supportive of future construction grant applications,” Gallagher wrote.
Regarding the concern of public opposition, Gallagher quibbled with the labeling of “significant,” and noted presentations Kenai Hydro has already given to chambers of commerce, Rotary clubs, at an Industry Outlook Forum, to the Kenai River Special Management Area board, the Cook Inlet Aquaculture Association and legislators, and more yet to come, including to the Kenai Watershed Forum and Kenai River Sportfishing Association.
“While there is a small, vocal group of project opponents, we have found through our public outreach program that a majority of the people are willing to let the studies and the science determine the feasibility and merits of the project,” Gallagher said.
Opposition has been primarily concerned with the impact the operation of a hydro dam could have on the ecology of Grant Creek, including fish-spawning habitat, especially because the creek is part of the Kenai River watershed.
O’Meara said he’s on the fence about the project and would like to see the fieldwork continue.
“Like many people I have mixed feelings about the project. I certainly am supportive of HEA in pursuing different alternatives for bringing in renewable energy sources, so in that sense I think it’s a good thing that they’re looking into some of the different potential that exists around the peninsula, especially,” he said. “But I’ve also listened to and read some of the concerns that have been raised about the project. I think some of those are valid concerns. I do think that all of the concerns that have been raised so far need to be taken seriously and that they need to be incorporated into evaluating the merits of the project before a decision is made to proceed or not.”
The specifics AEA notes in its concern over costs to mitigate impacts, “of features not yet anticipated in the cost estimate,” relate to the Iditarod Commemorative Trail, which is currently permitted and under development, and constructing a new tailrace pond. The trail lies in the way of the originally proposed route for a road and transmission line to the Grant Lake project.
Gallagher said that Kenai Hydro commissioned a study to analyze the costs of options to reroute the access road and transmission line. The shorter, one-mile direct access paralleling Grant Creek to accommodate a single, 90-degree crossing of the trail would be cheaper, even with a bridge, than a three-mile access route approaching from the south.
Gallagher said that Kenai Hydro is discussing the direct-access route with the single trail crossing with the governmental agencies involved in the trail. He said that the higher of the two costs — for the three-mile southern access — was used in the grant application, but that costs have been estimated for the other option, as well, and also the construction costs of the detention pond.
“The costs for both of these concerns are included within the submitted project budget,” he said.
AEA’s concern that the FERC process may result in constraints on the project that significantly impact the amount of energy that would be produced noted an example, that “energy output will be reduced in order to maintain environmental stream flows and lake levels necessary to mitigate impact on fisheries.”
Gallagher said that it is too soon to tell how that will shake out.
“Since the Aquatic and Water Resource studies have not been completed, (Kenai Hydro) believes that it is premature to speculate on the outcome of studies that have not been completed,” Gallagher wrote.
Kenai Hydro requested clarification from AEA over what it meant in its stated concern over a lack of site control. It again was related to the Iditarod Commemorative Trail:
“AEA has assessed that the presence of the Iditarod Commemorative Trail (right-of-way) conflicts with the project layout and other items that will need to be addressed as part of FERC licensing, application does not demonstrate sufficient site control at this time to justify award of final design or construction funds,” was AEA’s response to Kenai Hydro’s request for clarification.
“I would offer the same response to (the concern over costs to mitigate impacts to the trail) in that we have a solution to most of the (trail right-of-way) conflicts and are actively working with the government agencies to address this issue,” Gallagher wrote.
Kenai Hydro remains optimistic for the future of the Grant Lake project and the chance of future funding, should the Renewable Energy Grant program continue. Gallagher noted comments made by Peter Crimp, deputy director of Alternative Energy and Energy Efficiency for the AEA, that “AEA supports the ongoing work toward developing a hydro project at Grant Lake. Our recommendation against providing additional funding should not be confused with lack of support for a potentially viable and valuable renewable energy project.”
O’Meara said he’s basically on the same page, wanting to see the outcome of the study phase.
“I guess the long and short of it is I don’t feel, absent the outcome of the fieldwork regarding the project, that I have enough information to recommend to anybody that they not build the project or that they try to build it,” he said.
For more information on the project and licensing process, visit:
www.homerelectric.com/SavingEnergy/RenewableEnergy/tabid/118/Default.aspx
www.kenaihydro.com
http://akcenter.org/forests-and-wildlife/chugach/kenai-hydro
www.rbca-alaska.org/page8/page24/page24.html; and
www.ferc.gov
Some of the questions regarding water quality, depth, and habitat should be revisited before any further action to alter and damage the existing area; and while others suggested no fishery or habitat would be harmed, a few persons who have lived in the area a long time know salmon species have been attracted to Grant Creek to spawn for many decades. At one point, including sea-run trout species and native local trout, the kind and type of fish alone were present and evident in sufficient numbers to sustain interested local families who used to cross the narrows of Trail Lake, by small boat or by the suspension foot bridge across the narrows, to fish. While not all kinds of salmon were taken as food, the sea-run and other trout were; while the other larger King, Red and Pinks were not caught.
The habitat was in evidence even into the 1970s; until the foreign long-line nets were used in the North Pacific to capture entire returns of salmon. Between that, and other management blunders, the upper Kenai system has suffered a loss of native and natural wildlife. However, that is no reason to change the natural course of several feeder streams and the level of Grant Lake, to attempt to create a questionable hydro electric plant there.
In previous decades of higher water in Grant Lake, during glacier and snowmelt, the now-dry streambeds that exit the Grant Lake high water mark of another era, were active streams and out-flow into Upper Trail Lake occurred downhill from Grant Lake, along the western edge of Grant Lake. How will any water level changes effect this possible re-occurring outflow, and how will the silting and debris be kept out of the lake, with alterations of its existing flow path?
And the use of Falls Creek via a diversion into Grant Lake, to enhance its depth, is another bad idea. Prior to extensive placer streambed damage to Falls Creek by gold mining, the original streambed was habitat for several species of fish; they still try to go that direction even though a large area had been totally washed out by placer mining in the last century. Old maps such as one the Hope-Sunrise Historical Society has, show this. And there are a few active claims along Falls Creek, well before the first, second & third falls.
Of course, historically, some of the higher valleys were more extensively glaciered; others had fewer trees and no log-jambs to stop outflow or any fish from getting into streams, rivers or lakes. Now with decades of downed spruce trees, some into and across spawning streams, many areas of salmon and trout habitat should be revisited and reclaimed, restored to that best original use of this area.
After all, there has been no intent to actually provide Moose Pass area with electricity from any local disruptive hydro electric plant; so when an avalanche or earth quake take out the main power supply, we’d be in the dark. Years ago, Moose Pass had three diesel power plants, before Chugach Electric…
There are times, that’s what we need; in the isolation of the Kenai Mountains where hydro would be seasonal, at best; and disruptive at worst… Something in the way of generation brought into the area via the railroad, for emergency backup power.
We could’ve used that in 1964 EQ and a few times since. But what do I know? Been here 54 years and hiked several valleys, along streams and floated the lakes and rivers here, a bit…
The topic needs revisiting; not in the same vain hunters manage our game, or politicos ‘manage science’ to further their special interests. And not in the way the hog farmers wanted to built public funded studies for large pig farms over near Sterling or Kasilof some time ago. Another fit of special interest greed and insanity…?
in a small town
Kenai Mountains, AK
Of course HEA still wants to pursue this project! They have raked in 2 million dollars of free public money and know there is more where that came from. Would they pursue a project that has very little local support and looks marginal at best both economically and environmentally if they had to pay for it themselves? Maybe HEA ratepayers would have a different viewpoint if they were footing the bill.
Interesting that HEA is once again using the term “low impact” . They tried this when they were first promoting the project until they received a letter from the Low Impact Hydropower Institute who informed them that they did not qualify for this certification. That prompted its removal from the website only to reappear again here. Grant Lake hydro project did not qualify as low impact then and it still does not qualify. We are talking about a dam on a tributary of the Kenai River, internationally recognized as one of the most productive salmon rivers in the world. Complete with new roads, transmission lines, and other development inside of public lands and waters.
As far as Mr. Gallagher’s assertion that there is not significant opposition to this project, but rather only a small vocal group, I would suggest that HEA go back through the FERC record and remind themselves of the popular sentiment of the vast majority of the public who attended the FERC meetings. Let there be no mistake about this, the local people are largely opposed to this project for many good reasons. Cooper Lake hydro remains in the minds of many local residents,and how it has killed off the resident fish there.
To summarize, AEA had it right when they denied HEA more money, and they listed several valid reasons why. These reasons won’t change with more studies. It will still be highly controversial and economically and environmentally unjustified. Dams and fish just do not mix.