A private company hoping to develop a hydro electric power plant in Thomas Bay near Petersburg has been denied a permit to continue studying the project. The Federal Energy Regulatory Commission has also ended Cascade Creek LLC’s licensing process. However, the company says the decisions do not mean the end of the proposed power plant.

FERC denied the preliminary permit in an order issued January 30th. The permit would have given Bellingham, Washington-based Cascade Creek LLC another three years of exclusive rights to study and submit a license application for the project. The site is at Swan Lake at Thomas Bay, on the mainland northeast of Petersburg.

Swan Lake, Thomas Bay - KFSK file photo

The company already received two permits in a row and according to the commission, it has not made enough progress to warrant a third. The order said, “Cascade has had more than six years to prepare an adequate license application and has failed to do so.” FERC cited the many concerns from various state and federal agencies about the company’s research and significant disagreements over needed studies for the project. The order also mentions objections from local residents about the company’s gathering of information and involvement of the public in the licensing process.

FERC also ended what’s known as the Alternative Licensing Process. That had allowed the company more flexibility in meeting timelines for drafting a license application. FERC said the company, “has not participated in the (Alternative Licensing Process) to prepare a license application in good faith and with due diligence during the term of its second permit.

Chris Spens is Cascade Creek’s project manager and says the company just received notice of both FERC decisions.

“In both cases we are legitimately surprised and disappointed but likewise are evolving plans to proceed with the project and bring it to fruition,” Spens said.

The company proposed a 70 megawatt power plant using water siphoned from the mountaintop Swan Lake that feeds Cascade Creek. Local residents have opposed the project which is in a popular hunting and fishing spot. It’s also an area used by charter and tour companies. Federal and state agencies have filed concerns and complaints about the company’s study work and a lack of communication about the project.

Spens says the company understands FERC’s decision.

“What we see is based on the information they have at hand and based on their responsibility we understand the outcome,” Spens said. “We can recognize why they would draw this conclusion and take this action. And that really is us owning the fact that we need to be responsive and prudent and perform in a manner that works within that FERC structure and in a manner that works for local agencies.”

According to Spens, the company is not ready to say what the next move is for the hydro project. He says Cascade Creek could reconfigure its plans for the plant, based on the recently released Southeast Alaska Integrated Resources Plan. That state-commissioned study recommends against building a new transmission line for exporting Southeast hydro power. That was a once a key element of Cascade’s plan…..to sell power to Canada and the lower -48. However, the study also recommends incentives to encourage development of new hydro plants in the region.

The Southeast Alaska Conservation Council raised concerns over the company’s use of the Alternative Licensing Process a year ago. SEACC communications director Dan Lesh is pleased with the decision.

“FERC deserves credit for acting to protect the public process and ensuring that these sorts of projects go through meaningful review,” Lesh said. “I think all the agencies and lots of stakeholders in Petersburg and us filed some pretty strong comments suggesting that this process was eroding confidence in FERC and we are encouraged that they’ve begun to address those issues,” he said.

Cascade Creek can request a rehearing of the permit application within 30 days. It could also submit a new preliminary permit application. Cascade Creek’s parent company Alaska Hydro saw its share price drop 60 percent on the Toronto Stock Exchange Tuesday.