A nonprofit hydropower agency in Southeast Alaska is set to receive $5 million dollars in federal funds to increase its energy generation capacity.
The Southeast Alaska Power Agency, or SEAPA, produces wholesale energy from two hydropower facilities at Swan and Tyee Lakes in the central panhandle. Petersburg, Wrangell, and Ketchikan purchase much of their energy from the organization, but in the winter, municipalities sometimes need more energy than SEAPA can produce. SEAPA CEO Robert Siedman said that forces the towns to rely on diesel generators, which is a much more expensive source of energy.
“If diesel generators are required in the winter, your power bills are typically increased significantly as a result,” he said.
Siedman said there’s more energy available in the lakes, but SEAPA doesn’t have the ability to generate it. The money from the grant would go toward building another generator and turbine, planned for Tyee Lake.
Siedman said that’s particularly important because people are switching to electric heating, which increases the load.
“A lot of people are moving away from wood burning stoves,” he said. “You will not see a oil type boiler system in new construction – typically heat pumps, which is electric, so load growth is mainly driven by increases in electric heating.”
Even with the grant, $5 million isn’t enough to fund the entire project. Siedman said the agency is looking at lots of other funding sources. He said the agency will do everything possible to avoid bonding for the project, which could increase electricity rates as customers repay the bond through their electric bills.
The agency is still negotiating with the federal government, and the process is slow – $400 million dollars worth of grants are funding 200 projects around the nation, and all are in the process of negotiating details.