HEA ready to plug into hydro — Grant Lake project heading on to licensing

Kenai hydro sites WebBy Jenny Neyman

Redoubt Reporter

Homer Electric Assoc-iation generates 91 percent of its energy from natural gas. But as natural gas availability and prices can fluctuate, HEA has decided that 91 percent is too big an egg to lie in that one basket. So it has set an ambitious goal — increase the amount of power generation from renewable sources to 22 percent by 2018.

“That’s a bit of a stretch goal, and we’ll probably have a tough time reaching that, but we’re working on that and we’re evaluating a number of different potentials,” said Mike Salzetti, who manages fuel supply and renewable energy for HEA, in a presentation to the Kenai Chamber of Commerce last week.

Currently, 9 percent of HEA’s power generation portfolio comes from renewables, from its share of the output of the Bradley Lake hydroelectric facility on the south side of Kachemak Bay. Salzetti said that a couple of options are on the table to grow that percentage. HEA has been working with Ocean Renewable Power Company on a small-scale tidal energy project in Cook Inlet, for instance.

“We’re looking at a couple of other things right now, but right now we’re playing our cards close to vest as we evaluate those projects. I think the key to renewable opportunities is being smart about it. There’s a really big difference between intermittent renewables, such as solar and wind, and baseload-type renewable energy projects, such as hydro, geothermal, landfill gas, those types of things.” Salzetti said.

HEA thinks its smartest bet at the moment is constructing a hydro project at Grant Lake in Moose Pass. The possibility of such a project was investigated in the 1980s, and HEA took renewed interest in the idea in the last decade. After six years of scoping, researching, conducting field studies, data crunching, designing and engineering, HEA expects to submit a draft license application to the Federal Energy Regulatory Commission by the end of March.

The plan is to build an intake structure near the outlet of Grant Lake and divert water down 3,200 feet of a 10-foot-diameter, U-shaped tunnel, through a penstock to a powerhouse with two, 2.5-megawatt turbines, then return the water to the stream, with an off-stream detention pond to provide a storage reserve.

The project will involve two miles of road — one mile from the Seward Highway to the powerhouse, and another mile to the intake structure — and one mile of transmission line from the powerhouse to the existing line along the highway. That proximity is one of the big advantages of the project.

“We have a lot of great renewable energy potential projects in the state of Alaska, but they get squashed — the economics of them get squashed — by the fact that they’re 10 miles or 20 miles away from transmission. At roughly $1 million a mile for transmission, on small-scale projects the economics just don’t pencil out,” Salzetti said.

Scoping and mitigating any potential environmental impacts is a big step in the licensing process. One of the biggest potential damages of hydropower is impact to fish. Grant Lake has some stickleback and scuplin but no salmon, since there’s a waterfall at the lake’s outlet that blocks the passage of anadromous fish.

Grant Creek does host spawning salmon and some resident species of trout, so field crews used a weir and did surveys to count and tag fish, then mapped the stream, gathered water flow data and tested water quality and temperature. When all that data is combined, it creates a model of when and where the fish are throughout the year, and what conditions need to be maintained to not negatively impact them. HEA would operate the power plant accordingly, Salzetti said, taking more water certain times of the year, and less when water levels need to be maintained. They also plan to control the temperature of the water released back into the creek by choosing the depth at which the water is taken from the lake.

Salzetti said that the operation could even improve conditions in the creek, increasing water flow when the creek would naturally be drier, and removing obstructions to the currently blocked north fork of the creek to create additional fish habitat. The result should be no net impact to habitat, he said.

“The key takeaway here is that this project will actually maintain 99.8 percent of the current habitat that exists without the project, with the project in place. That’s primarily done by the fact that in the winter we’ll keep habitat that’s normally dry in the winter wet for a longer period of time. And then in the summer we’ll take some of those peak natural flows that are detrimental to habitat and we’ll smooth those out,” Salzetti said.

Permitting also required an assessment of the area’s flora and fauna that might be impacted — no problems found there, Salzetti said — and of the cultural, historical and recreational values of the area. There are some historic and still-active mining claims in the vicinity, and the area is used for recreation. The project could increase accessibility to the area if the road is opened to the public, and that could be a good thing or a bad thing, depending on one’s perspective.

“Some view it as a negative, some look as a positive. One thing we’ll be looking for in public comment period, is how do people want us to treat that?” he said.

Once submitted, the draft license application will be open for comment, including by the public, for 90 days. HEA will then have 90 to 120 days to evaluate the comments and make changes to the application, then submit the final license application to FERC somewhere around November. It could take FERC anywhere from nine months to a few years to issue its decision.

The research and development phase has been helped along by the Alaska Energy Authority renewable energy grants program. AEA has granted over $2 million to Kenai Hydro, a subsidiary of HEA formed to investigate four potential hydro projects near Moose Pass. Three of those projects were shelved, and only Grant Lake is currently being pursued.

AEA denied the Grant Lake project construction funding in late 2011, citing various reasons, including public opposition to the project and that HEA hadn’t yet started the licensing process. Some Moose Pass, Cooper Landing and Seward area residents, communities not served by HEA that would get no benefit from the power generated, have spoken out against the project, primarily voicing concern over fish habitat.

Salzetti said that HEA would welcome more funding from AEA to further help with the project’s estimated $59 million price tag. If HEA pays for construction, the plan would be to finance it over the length of the project’s FERC permit in order to not have to raise rates to HEA members.

“That’s the last piece of the puzzle that we’re doing here is the financial modeling of that. It’s a pretty small-scale project, and we hope to be able to finance that over the 30-year license period. So we’ll be looking to levelize rates so it has little or no impact, but the jury’s still out,” he said.

If approved, the project would produce 19.5 gigawatt hours of electricity, adding to the 44 gwh from Bradley Lake to bring HEA’s renewable power generation to about 15 percent.

“We’re really proud of the quality science and engineering that has gone into this project and we’re confident the Grant Lake license will be received,” Salzetti said.

More information on the project is available on the HEA website, http://www.homerelectric.com, on the Renewable Energy page.

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