Hydro power has an image problem.

Big dams built by big government. Fish movements blocked. Habitats flooded. Wildlife and people displaced.

On the financial side, there are big front-end costs, long payouts and cost-benefits equations that are arguable.

There's another side of hydro, though: Small, local, low-impact, cost effective, long-term power with stable prices.

Alaskans are showing how hydro can be done right, and private companies are leading the way.

In Southeast Alaska, two of Alaska Power and Telephone Co.'s small hydro projects have won national recognition, achieving low impact certifications by the national nonprofit organization Low Impact Hydropower Institute.

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To achieve certification, projects must meet river flow, water quality, fish passage and watershed protection criteria. Projects must also meet threatened and endangered species protection criteria, the organization said.

How to do hydro

Hydro projects depend on local terrain. Southeast Alaska is a mountainous region with high alpine lakes and thunderous waterfalls that cascade down steep slopes. For minimum impact, many Southeast hydro sites allow “lake taps,” where the stream-flow from a mountain lake is harnessed and no dam is built to impound water. Where dams are built, stringent state requirements ensure adequate stream-flow for fish.

In the past, municipal utilities in Ketchikan, Wrangell and Petersburg have tackled hydro projects with funding from Alaska Energy Authority. Today these communities own and operate two medium-sized projects at Swan Lake and Lake Tyee. Sitka built its own local hydro project at Blue Lake utilizing state funds.

Today, private firms are leading the way in developing a string of small- to medium-sized new hydro projects in Southeast.

Alaska Power and Telephone, based in Port Townsend, Wash., is one firm that has a long history in Alaska.

In 1957, the company purchased the small Dewey Lakes hydro project near Skagway. It has since built other projects: Goat Lake, a 4-megawatt facility seven miles north of Skagway, was completed in 1997. In 1998, the company built a 15-mile submarine cable in to make hydro power available to Haines.

Last year, Alaska Power connected its system to the regional cooperative Inside Passage Electric Power System to provide power to customers up the Chilkat Valley to the Canadian border. The company also started construction on Kasidaya Creek, a 3-megawatt hydro project south of Skagway.

Two hydro projects serve communities on southern Prince of Wales. The company's $12.5 million, 4.5-megawatt Black Bear hydro project, located 15 miles northeast of Klawock, was completed in 1995. A transmission line was added to provide power to Klawock that same year.

In 1996, Alaska Power received funding to extend the transmission line to Thorne Bay and Kasaan. The project was completed in 2001. Over a 2-year period beginning in 2005, the grid was extended south from Klawock to Hollis and Hydaburg.

The 2.5-megawatt South Fork project near Black Lake was completed in 2006. It cost $4.5 million.

Projects serving small markets

Prince of Wales has the Southeast region's most interconnected power system. About $22.5 million in funds from private and public sources have been invested to develop the two hydro dams and the required intertie transmission lines. Some $13 million came from private sources, $5.8 million from federal sources and $3.7 million from the state.

Alaska Telephone and Power is now building a 48-mile extension of the transmission lines to reach the communities of Naukati and Coffman Cove on the northern end of the island. The connection, which will cost about $6 million, allows inexpensive hydro power from Black Bear and South Fork to displace the diesel now being used.

Alaska Telephone and Power estimates this will cut local power costs in half, from about 40 cents per kilowatt hour to about 20 cents per hour.

There are more hydro projects on the horizon. Alaska Telephone has filed for preliminary permits for four additional projects in Southeast Alaska.

Juneau's Alaska Electric Light and Power is developing a leadership track record, too. The company is managing construction of the Lake Dorothy project, near Taku Inlet south of Juneau, and will continue to manage the project after it's completed in 2010, according to utility spokeswoman Gail Wood.

The $55 million project is much larger than those built by Alaska Power. It is intended to supplement Snettisham, the hydro project that now supplies the capital city. Juneau has some of the lowest-priced electricity in the state, at about 9.5 cents per kilowatt hour.

When Lake Dorothy is finished, Juneau will have enough hydro capacity to serve the capital as well as local mines and, as interties are built, outlying communities like Hoonah.

Alaska Electric Light and Power, Juneau's electric utility, still operates its 100-year-old Gold Creek hydro facility, pictured here in it's early years. The utility operates a handful of hydro operations in Southeast Alaska. PHOTO Courtesy of Alaska Telephone and Power

Alaska Electric Light and Power is also taking the lead in building transmission lines, too. In a joint venture with Inside Passage Electric Power System cooperative, the two companies are building a 54-mile intertie, including 35 miles of submarine cable. The extension will run from Juneau to the Greens Creek mine on northern Admiralty Island, and then on to Hoonah.

The first-phase connection to Greens Creek has been constructed and was switched on last year, allowing Greens Creek Mining Co. to idle diesel-powered generators.

The second leg of the project, which will bring power to Hoonah, is not going as planned. An $8 million capital appropriation in the current year state budget, which was to match an additional $8 million in federal funds secured through the Denali Commission, was vetoed by Gov. Sarah Palin as a cost-cutting measure.

The total cost of the Juneau-Greens Creek-Hoonah transmission line is estimated at about $40 million.

The governor vetoed another $500,000 grant for a feasibility study of a $23 million extension of an intertie that would connect Kake, another small Southeast village, to Petersburg. That community is now connected to the Lake Tyee hydro project, which also serves Wrangell.

Phelan Straube, energy coordinator for the Southeast Conference, a regional community and business economic development group, says Palin remains sympathetic to the long-range plan for Southeast interties. Straube hopes the governor may include the money for both Hoonah and Kake in her proposed capital spending plan for next year.

Straube said Palin did support a $46 million capital appropriation this year for the Southeast intertie, a 56-mile transmission line connecting the Lake Tyee project to Swan Lake near Ketchikan, which is the top priority for the Southeast Conference. Construction of that intertie is managed by the Four Dam Pool Power Agency, a community-owned nonprofit. The project resumed after stalling in 2005, when funds were depleted.

Straube said the Southeast Conference has mapped out a $300 million-plus long-term plan for interties that bring low-cost hydro from Ketchikan to Skagway. That would allow small communities to switch from diesel to hydro, cutting power costs by half or more.

But it will be years before the network is finished. The cost of building the interties is a major obstacle because of environmental issues. Most of the intertie routes are through roadless areas of the Tongass National Forest. The construction of towers would have to be done with helicopters through many of these areas, just like the Swan Lake-Tyee intertie currently under construction.

The advantage that Alaska Power and Telephone has with its system on Prince of Wales is that the island's communities are connected with roads, which include right-of-ways for utilities. Interties there can be built for much less.

Still, Alaska Power's experience in building small hydro projects and transmission lines could be used to build potential regional connections that may eventually link Southeast communities, Straube said.