Monday, January 28, 2013

Timeline clarified for Susitna-Watana project studies

Elwood Brehmer
Alaska Journal of Commerce

The Alaska Energy Authority and the Federal Energy Regulatory Commission may have cleared a once muddied near-term timeline for the Susitna-Watana hydropower project. At the same time, the cost of the project has risen by a half-billion dollars.

A Jan. 17 letter from the commission to AEA agrees to a compromise with the Energy Authority and moves up determination on 13 of the 58 studies detailed in AEA’s revised study plan to April 1. AEA filed its revised, 58-study plan with FERC on Dec. 14.

On Dec. 31 FERC sent a letter to AEA stating the 13 studies in question would not be ruled upon until May 14, putting summer work in jeopardy.

The latest letter is a response to a Jan. 7 appeal by AEA Lead Project Manager Wayne Dyok to make a final determination on all studies by Feb. 1. While the Commission rejected Dyok’s request in part, it is expected to give its determination on 45 of the study proposals on Feb. 1 and wrote that it understands AEA’s concern over work delays, thus agreeing to the April 1 deadline.

State Republican leaders lauded FERC for the decision in a Jan. 21 press release:

“This revised study plan provides a balance between the need for power and environmental resources and will provide sufficient information to file for a FERC license in 2015 and to bring the project online in 2024. Alaska, and especially Fairbanks, needs long-term and stable sources of energy. Susitna-Watana Hydro is a long-term power solution for the state,” Sen. John Coghill, R-North Pole, said in the release.

The current project timeline has construction beginning in 2017 and the project completed in 2024.

AEA revealed at its January board meeting the latest cost estimate for the Susitna-Watana Hydro project at nearly $5.2 billion, up from an August 2012 estimate of $4.7 billion.

At the meeting, Dyok said the key issues with the 13 studies are not with studies themselves but with some of the detailed biological aspects of the fisheries studies. If the work is done without approval it could mean redundancy in work over the coming years, he said.

“If we can’t do the summer fieldwork then you could be looking at as much as a year’s delay. That’s why it’s important to have a decision by the first of April,” Dyok said.

While there is no outward concern over study approval, work can move ahead as planned only if FERC approves all 58 studies.

AEA has until March 1 to file additional information requested by FERC on the 13 studies in question.

The revised study plan included not only study proposals, but public comment letters and responses to the letters as well. Dyok called the approximately 3,500-page plan “unprecedented” in its detail.

“I have done this work in 25 different states and this is the most formidable study plan I have ever been associated with,” Dyok said. “It’s a pretty voluminous document.”

Nick Szymoniak, a project economist for AEA, said roughly a third of the increased cost projection is simply due to inflation.

“Just going from a 2012 dollar estimate to a 2013 dollar estimate added $143 million to it,” Szymoniak said.

In his presentation, Szymoniak broke down the rest of the cost increase. He said additional costs in project licensing and power transmission added a total of $112 million and new construction costs added $73 million.

Szymoniak said the new estimate tacked on $102 million to the projected cost because it provides a more accurate project assessment. The August estimate settled on $4.7 billion as likely figure, but gave an estimate range from $3.3 billion to $7.1 billion. The recent estimate narrowed the range to $3.7 to $6.4 billion; with a 90 percent probability the final cost would fall between $4.4 and $5.8 billion.

If constructed, the dam would form a roughly 40-mile-long reservoir on the upper Susitna River beginning 87 miles upstream from Talkeetna and 22 miles upstream from Devils Canyon, which AEA calls a “natural fish barrier.”

The dam would generate 2.8 million megawatts of electricity — about half of Alaska’s Railbelt power — and prevent about 1.3 million tons of carbon dioxide from entering the atmosphere versus fossil fuel power generation annually, according to AEA figures.

AEA estimates around 1,000 jobs would be generated during construction.

AEA is working on the project as if its studies can all begin in spring. Agreements with the Department of Fish and Game are being finalized for summer study work and contracts with consultants are being worked out, Dyok said.

Studies on ice conditions and winter recreation near the reservoir area are being done now, he said.

After adding information gathered in 2012 on the site, Dyok said the 750-foot dam proposed in August has been reduced to 735 feet because testers hit bedrock 15 feet sooner than expected. Also, a preliminary quarry site near the project was found to be suitable for drawing material during construction.

Dyok said seismic studies are ongoing but 2012 work confirmed no faults on site. A resource procurement plan for design and construction is expected in a few months and AEA hopes to complete a design feasibility report in 2013.

Read more:

About Alaska Contract Staffing