Susitna-Watana Hydro Basics

Why is Susitna-Watana Hydro necessary for Alaska?

Susitna-Watana Hydro is part of a diverse energy future. The state’s energy infrastructure is ageing and existing gas-fired generation units will be retired in the coming years.  Once online, Susitna-Watana Hydro will deliver about 50 percent of the Alaska Railbelt’s electricity. Residents and businesses will be able to count on clean, reliable and stable-priced energy for 100+ years.

Alaska ranks fifth highest in U.S. energy costs and remains dependent on volatile-priced fossil fuels. Without a large renewable energy project like Susitna-Watana Hydro, replacement fossil fuels- likely from new oil and gas production- will be necessary to meet Railbelt energy demand.

Alaska is leading the nation in its commitment to renewable energy. As part of the 2010 energy policy, the Alaska Legislature set the goal of 50 percent electrical energy from renewable sources by 2025. Susitna-Watana Hydro will contribute a significant amount of hydropower generation to help the state achieve its goal, which cannot realistically be achieved through other renewable sources alone.

Won’t silt build up in the reservoir and impact the turbines?

The impacts of Susitna River silt have been studied since the 1980s by several different engineering consultants.  The short answer is not for many centuries. The amount of unconsolidated sediment that is estimated to be deposited in the reservoir over 50 years is about 104,000 acre-feet. The gross reservoir volume is about 5.2 million acre-feet.  Based on the engineering studies, it would take more than 2,500-3,200 years to fill the reservoir with silt.

 Hydroelectric projects are constructed in various river systems across the globe, including other glacially-fed systems in Alaska as well as Norway, Canada, Iceland, New Zealand and more.  Modern turbine technology provides protection from silt and debris while allowing for efficient project operations.

Why is Alaska pursuing a large hydro project when dams are being removed from rivers elsewhere?

Susitna-Watana Hydro will deliver 50 percent of the Alaska Railbelt’s electricity. Residents and businesses will be able to count on clean, reliable and stable-priced energy for 100+ years while the state is moved toward its 50 percent renewable electrical energy by 2025 goal.

There are approximately 80,000 dams in the United States, most continuing to serve useful functions. Many small dams were privately built more than a century ago and were designed to serve as a power source for mills, factories or other industry, and have since been removed. These structures were built without the stringent regulatory and environmental review found today.

Recent headlines have focused on the removal (or consideration of removal) of a handful of smaller hydropower dams for environmental reasons, mainly to benefit fish species listed under the Endangered Species Act.  Susitna-Watana Hydro’s location differentiates it from others.

Susitna-Watana Hydro location is located in a far-inland section of the Susitna River, 184-river miles from where the river empties into Cook Inlet. In addition, the project is located 22 to 32 river miles upstream of Devils Canyon, a known impediment to fish passage.

Alaska is among the richest areas in the world when it comes to natural resources. With more than 3,000 rivers and three million lakes, hydropower is a viable energy source to meet the needs of communities across the state. In fact, 21 percent of the state’s current electricity is generated by hydropower.

Advances in technology, engineering and environmental sciences during the past 50 years have made it possible to harness the power of rivers while minimizing the impact to the environment. Most dam removal continues to include unlicensed, non-power dams.

Is Susitna-Watana Hydro the right size for Alaska’s power needs?

Yes, the proposed size of the Susitna-Watana Hydro Project is ideal for Alaska’s energy needs. The 705-foot dam will provide 2,800,000-megawatt hours (MWh) of electricity annually, roughly 50 percent of the electricity currently used by the Railbelt’s households and businesses. The Railbelt makes up 75 percent of the state’s overall population.

Together with smaller hydropower, wind, solar, geothermal and other renewable energy sources, Susitna-Watana Hydro will enable Alaska to achieve its 50 percent renewable electrical energy goal.

Wasn’t the Susitna-Watana Hydro Project studied in the 1980s? Why is Alaska pursuing a project that was previously studied, yet never constructed?

The hydropower potential of the Susitna River has been studied since the early 1950s. In 1980 the Alaska Power Authority (now Alaska Energy Authority) began comprehensive study of the feasibility of a Susitna River hydropower project.  In 1983 the Alaska Power Authority filed for a license with the Federal Energy Regulatory Commission (FERC) and amended the application in 1985 for a two-dam project. Three-phases of construction would have stretched over 20 years.  Because of the size, the 1980s project would have produced much more power than needed. The state eventually decided to pull its license application, primarily because of the low cost and ample supply of oil and gas.

The energy picture has changed dramatically from the 1980s. Alaska’s energy infrastructure is ageing and existing gas-fired generation units will be retired in the coming years. Alaska ranks the fifth highest in U.S. energy costs and remains reliant on volatile-priced fossil fuels.  The 2010 state energy policy set the renewable energy goal of 50 percent renewable power by 2025 and the Alaska Legislature unanimously authorized the Alaska Energy Authority to pursue Susitna-Watana Hydro in 2011.

Today, Susitna-Watana Hydro is more appropriately sized to meet the Railbelt’s energy needs. It is a smaller project with one dam near the Watana site on the Susitna River and construction would last about eight years. Susitna-Watana Hydro will generate 2,800,000-megawatt hours (MWh) of electricity annually, meeting roughly 50 percent of the entire Railbelt’s electricity demands. The current project is using the data obtained in the 1980s as a baseline for dozens of additional studies to determine the project’s optimum design and operating plan, including environmental protection.

Once online, Susitna-Watana Hydro will be an important piece of Alaska’s energy infrastructure providing clean, reliable and stable-priced energy to Alaskans and Alaska businesses for the next 100 years.

What is the cost of the project?

The current cost estimate for building Susitna-Watana Hydro is $5.66 billion. The Alaska Energy Authority (AEA) is taking extraordinary steps to develop the most reliable budget possible and to validate cost assumptions. First, MWH Global – the world’s largest hydropower engineering firm in the world, has been hired to analyze the project and estimate its overall cost. Second, AEA is in the process of hiring another independent, experienced firm to validate this work. Third, AEA is organizing a board of consultants to ensure the project is designed and built responsibly and on budget.

Can the state afford to pay for the estimated $5.66 billion cost of Susitna-Watana Hydro?

AEA does not expect the State of Alaska to directly pay the estimated $5.66 billion needed to build the project. Instead, AEA expects the project will be publically financed using a combination of bonds, loans, state investments, and other financing solutions. Repayment of project debt and return on the State’s investment will come from the sale of electricity, primarily to Railbelt utilities.

Alaskans may be familiar with the AEA-owned Bradley Lake Hydroelectric Project, just east of Homer.  In the successful financing model, Bradley Lake project construction was funded by a combination of bonds and state investment through appropriations.  Railbelt utilities purchase the power generated by the project through a Power Sales Agreement. Under that Agreement, the Railbelt utilities continue to make payments after bonds are paid off, effectively providing a return on the State’s investment in the project.

How will Susitna-Watana Hydro affect my electricity rates?

The Alaska Energy Authority anticipates most power generated by Susitna-Watana Hydro will be sold to Railbelt utilities.

Current projections indicate Susitna-Watana power will be competitive with other energy sources at startup.  Significant value and benefits will arise because the long-term cost of power remains relatively stable for 100 years.  The rate you pay at your home or business varies by each Railbelt utility. Retail rates are unique and based on factors that include the power generation mix and cost of power from these energy sources, and the utility’s distribution costs.

What kind of reservoir will Susitna-Watana Hydro create?

The current project model would create a reservoir that is about 42-miles long and an average width of 1 mile. This reservoir will provide the water storage necessary to generate the electrical capacity needed to meet 50 percent Railbelt electrical demand, especially during critical winter months.

Are any upgrades to the Railbelt transmission system needed?

Yes, independent of Susitna-Watana Hydro. Alaska’s Railbelt electrical grid serves 75 percent of Alaska’s population and accounts for more than 85 percent of the state’s electricity. The Alaska Energy Authority (AEA) owns the 170-mile Willow to Healy portion of the transmission line.

Alaska’s energy infrastructure is limited and aging. AEA is working with the Railbelt utilities to identify projects that will strengthen the backbone of the state’s energy distribution system and examine how electricity is generated, transmitted and distributed to meet the Railbelt’s needs in a safe and efficient manner.

The $5.66 billion estimated cost of Susitna-Watana Hydro includes transmission facilities which will connect the project to the Railbelt transmission system.

What is the timeline for Susitna-Watana Hydro?

The Alaska Energy Authority (AEA) is in the preliminary stages of a multi-year licensing process. The Federal Energy Regulatory Commission (FERC) is the lead federal agency for licensing of Susitna-Watana Hydro. AEA will also seek a Clean Water Act permit from the U.S. Corps of Engineers for project construction.

Beginning in 2013 more than 58 individual environmental studies will be conducted, in addition to nearly twenty studies in 2012. The goal is to obtain a FERC license and Corps permit, at which time construction could begin. Under this schedule, Susitna-Watana Hydro is expected to begin full energy production in 2028.

What is the process for obtaining a license to build Susitna-Watana Hydro?

The Alaska Energy Authority (AEA) is seeking a license to build Susitna-Watana Hydro under the Federal Regulatory Agency Commission’s (FERC) Integrated Licensing Process (ILP). It will take approximately six years to complete the pre-licensing applications, studies, environmental impact statement and application processes before a license can be issued.

Throughout the ILP, other federal, state and local agencies, as well as other interested stakeholders and the public at large have the opportunity to weigh in on the proposed project.