Chikuminuk Lake Project Discussed in the Alaska Legislature

For the Chikuminuk Lake Hydroelectric Project to proceed the statute that created the Wood Tikchik State Park in 1978 must be updated to allow for needed feasibility and environmental studies. 

Alaska Statutes 41.21.160 - 41.21.167 established Wood Tikchik State Park to protect the area's fish and wildlife breeding and support systems and to preserve the continued use of the area for subsistence and recreation. The Statue also identifies appropriate uses within the park that may fall outside of wildlife protection and preservation. Specifically, AS 41.21.167 states that "Development and operation of a hydroelectric site at Lake Elva or Grant Lake is not considered and incompatible use."  The statute recognizes that hydroelectric is compatible within the park in certain areas; however, for Nuvista to explore the potential for hydroelectric power at Chikuminuk Lake, the Alaska Statute must be amended.

Senate Bill (SB) 32 and its companion legislation House Bill (HB) 137 seek the needed revision. Senator McGuire introduced SB 32 and Representative Millet introduced HB 137 this legislative session. SB 32 has passed the Senate Community and Regional Affairs Committee. The bill's next stop is the Senate Finance Committee. HB 137 has been referred to the House Resources and Finance Committees. To follow the progress of these bills please use the Alaska Legislature bill tracking website. Also, please contact the Nuvista team with any questions.

SB 32/HB 137 only open the door for needed on-the-ground feasibility investigations; this legislation does not give approval to proceed with construction.  As has been explained in previous letters, Nuvista Light and Electric Cooperative is in the early stages of investigating this project.  We will not commit to this project until we have satisfied ourselves and the people of western Alaska that Chikuminuk is a good fit for the region. SB 32/HB 137 would allow us to take this next step. While we don’t yet know if Chikuminuk is feasible or appropriate, there is no question that new solutions are needed to meet Western Alaska’s energy challenges.

Why we think Chikuminuk Lake is worth the effort!

• Chikuminuk Lake has long been considered a viable alternative source of power in engineering studies since the 1950’s; a USGS stream gage has been in place there for years. 
• Chikuminuk Lake is one of the only sites in an entire region meeting three important criteria for hydro power: 1) year around water flow, 2) minimal recreation and subsistence use, and 3) no salmon.
• Initial estimates indicate that Chikuminuk Lake may have sufficient power generating capacity to serve both Yukon Kuskokwim and Bristol Bay communities. 
• Chikuminuk was an energy consideration prior to statehood or park establishment; when diesel was cheap and millions of gallons of fuel deliveries up-river and potential spills harming fish were not yet concerns. Reconsidering this option in today’s context makes even more sense.
• Park legislation and recordings clearly considered lake power a possibility; Park enabling legislation contains exemptions for two other lake sites (Elva and Grant) for hydropower; Chikuminuk Lake advantages include its remote location, lack of salmon, and year around power-generating potential.
• Few Alaskans can afford access to this remote location where it costs $3,000-5,000 to fly in; an average of only 6 parties a year request recreation access permits.  Almost all Park recreation use concentrates south of Chikuminuk, in more accessible areas and at a handful of specialty lodges.
• Over 36 Western AK region communities are entirely within federal wildlife refuge borders; limited access, infrastructure, or energy options exist due to restricted or prohibited activities on such lands. This site may potentially serve many of these communities.
• The data gathering required for this project will contribute to the knowledge base about an area where little scientific study has been done. Nuvista will continue to work closely together with AK Fish & Game, USFWS, and other stakeholders to gather this useful and important baseline information.
• We need to work together so diesel-generated electricity becomes a relic of the past. It harms our environment, is a diminishing resource, and the price is subject to the volatility of the international marketplace. Local, renewable solutions are the future.

Power Cost Equalization (PCE) around the State

Energy prices in rural Alaska are higher than in urban Alaska, partially due to the availability of urban Alaska’s relatively cheaper sources of electricity such as hydroelectric power and lower transportation costs. As a result, the Alaska Energy Authority (AEA) administers the Power Cost Equalization Program (PCE) to make electricity more affordable for rural Alaskans.

AEA distributes PCE funds to local utilities, which use the money to subsidize the cost of electricity up to 500 kWh per household per month. For example, in Bethel in 2011 the baseline cost of electricty was 50.82 per kWh, PCE reimbursement meant that residents only paid 16.30/kWh on their first 500kWhs used.  Dillingham's baseline residential cost was 40.04/kWh and the PCE reimbursement brought it down to 19.53/kWh. Even with the PCE program, residents of rural Alaska pay more than twice their urban neighbors for electricity. PCE subsidies do not extend to businesses; their electric bills are four to five times those of urban Alaska.

The graphic above by Alejandra Villalobos Melendez and Ginny Fay from the University of Alaska Anchorage’s Institute for Social and Economic Research shows the relative costs of electricity around the state with and without the PCE subsidies. Without the PCE subsidies, electricity would cost much more.  Businesses do not benefit from the PCE reimbursement and must pay the full cost of electricity, a significant hurdle to starting and operating a business in rural Alaska. For a better view of this graphic go directly to the ISER Research Summary, Energizing Alaska: Electricity Around the State.

Energy Star: Sitka - 99% Hydroelectric!

Hydroelectric power provides 99% of the electricity to the residents and business in Sitka, Alaska. Two dams on Blue and Green Lakes create electricity which is transmitted through power lines to Sitka. The Blue Lake power plant was constructed in 1959 and the Green Lake plant was constructed in 1982. This graphic by the City of Sitka shows electric power use by class. Similar to Western Alaska, prices vary by user.

Sitkans are already feeling the effect of unstable diesel prices. Customers are now turning to electricity for heating because of the rising cost of fuel oil. Additionally, new fishing businesses have increased the use of electric power. As a result, Sitka is looking for further hydroelectric power generation potential.

Similar to Nuvista, the City and Borough of Sitka’s Electric Department is involved in the FERC process to expand hydroelectric power generation (more on FERC in this month's FAQ). Sitka plans on expanding the Blue Lake Hydroelectric project to increase power generation by 50% and construct a new project on Takatz Lake. These efforts are expected to prevent a rate hike up to $.16 or $.17 cents per kWH, which could force some businesses to close.

Watch this short video documentary, “Rain Power”, on Sitka’s hydroelectric resources.

Participate in a Project Workgroup

We are looking for community members and people knowledgeable about the Chikuminuk Lake area, surrounding region, and its resources to help on topic specific workgrops.   If you are interested in participating in a Project Workgroup please contact Tanya Iden with your particular areas of interest and your contact information. We will make sure you are invited to participate when the time comes.  We expect workgroups to meet as early as this Spring. Project Workgroups will provide a link to community knowledge and help make sure the right decision is made on this potential project.

FAQ: What does the Federal Energy Regulatory Commission (FERC) have to do with this project?

Recently the project team was asked: What does FERC have to do with this project?

Answer:   FERC is an independent federal agency with a mission to regulate and oversee energy industries in the economic, environmental, and safety interests of the American public.Congress has charged the Commission with evaluating whether proposed non-federal hydro-power projects should be approved. While the commission does not propose, construct, operate, or own hydropower projects it issues preliminary permits and licenses for hydropower projects as well as enforces the conditions of the licenses it issues.

Nuvista's Chikuminuk Lake Hydroelectric Project must apply to FERC for a permit and license.  Nuvista completed the first step of the FERC process and has obtained a preliminary permit. The preliminary permit does not authorize any construction or land disturbing activities. Preliminary permits reserve the potential hydropower site for the permit holder and maintains the permitees priority to file a license application.  The permit lasts for three years and during these three years Nuvista prepares an application for a hydropower license.  The application for license requires an extensive environmental analysis to assess the site's potential for hydropower and possible impacts to the natural and social environment.

Did you know that Nuvista maintains a frequently asked questions link on their website. Is there a question that you would like to have answered?  Send an e-mail to Chuck Casper, ccasper@nuvistacoop.org, with your question.