A Native village corporation near Tok and the utility that serves that area have partnered up on a venture to build a small hydroelectric project that could reduce the area’s high energy costs. Alaska Power and Telephone officials say the partnership will now seek state and private funding and for the $19 million project.
Alaska Power and Telephone business development officer Jason Custer says the partnership that AP&T formed last month with Tanacross Inc. and the Village of Tanacross would enable the utility to reduce the amount of diesel it uses to generate electricity for the Tok area.
“This hydropower project is going to allow us to supplant about 40 percent of the diesel-fuel use currently in the Tok service area – which is a significant amount,” Custer said.
AP&T’s Tok-area customers now about 50 cents per-kilowatt-hour for electricity. Custer says the Yerrick Creek Hydroelectric Project could eventually bring that cost way down its for customers in Tok, Tanacross, Tetlin and Dot Lake.
“We feel fairly confident that we should get the cost of energy down to about half of what the cost of diesel energy is currently,” he said.
A federal environmental assessment of the project estimates Yerrick Creek would bring down electricity costs by about 20 percent, to around 37 cents per kilowatt hour.
The project calls for construction of a so-called “run-of-the-river” hydro facility about 20 miles west of Tok, off the Alaska Highway. The facility would divert water from Yerrick Creek into a 42-inch pipe, then through a turbine, generating up to 1.5 megawatts.
Custer says the Upper Tanana Energy partnership is applying for an $8 million grant from the Alaska Energy Authority’s Renewable Energy Fund. He says the partnership also will seek an $8 million capital project appropriation from the Legislature, as a backup plan.
Custer says once it secures public funding, the partnership will seek private financing. He says if all goes well, Yerrick Creek could be up and running in a little more than two years.
Tanacross Inc. President and CEO Bob Brean says he thinks Tok-area ratepayers would be happy with a 20-percent rate reduction – or even just stabilized and predictable energy costs.
“We have no control over the price of fuel oil,” he said. “So, it could jump 50 cents a gallon next year, in which case it would really put a hurting on the local utility’s ability to keep rates stable. I mean, that price on fuel oil is fluctuating all the time.”
Brean says the high cost of energy has rocked the region’s tourism-dependent economy.
“This is the kind of thing that can make or break businesses in the Upper Tanana Region,” he said. “If hotels and grocery stores and gas stations have very thin margins as a result of what they have to pay for power, then anything we can do to help there certainly goes a long ways in keeping those businesses stay open.”
Scott MacManus is an area resident who’s very encouraged by the project. MacManus is an assistant administrator with Tok-based Alaska Gateway School District, and he’s the driving force behind construction of a biomass-fueled heat and power plant at Tok School. The system burns scrap timber harvested from area forests, and it’s cut the district’s energy costs by about a third over the past couple of years.
MacManus says he’s disappointed that AP&T decided earlier this year to shelve a plan to build a 2-megawatt biomass-fueled heat and powerplant for the Tok area. Custer says company officials just couldn’t get the plan to pencil-out, due to uncertainties such as the price and availability of timber.
But MacManus says that’s OK, because hydro will accomplish the same goal: reducing energy costs with a clean, green renewable power source.
“We’re in favor of any kind of energy solution that creates local sustainability and creates local employment,” he said. “And we’re excited that AP&T is being proactive about working with our local communities to solve the power problem up here.”
MacManus says he and others in Tok are continuing working on a smaller biomass project that would provide heat and electricity for the town’s core.