Construction could begin next year on a long-planned $100 million new electric power transmission line from Anchorage to the Kenai Peninsula.
Chugach Electric Association of Anchorage said it received a final decision Oct. 9 from the federal government on a federal environmental impact statement for the project.
Joe Griffith, Chugach's general manager, said he plans to meet with five other utilities soon to get final agreement on sharing costs for the new power line.
Besides Chugach, other utilities who will buy power moved over the new line include Golden Valley Electric Association of Fairbanks, Matanuska Electric Association of Palmer, Municipal Light and Power of Anchorage, Homer Electric Association of Homer and the City of Seward.
"We hope to be under construction next year," Griffith told the board of the Alaska Industrial Development and Export Authority Oct. 10.
The new transmission line will give Chugach Electric Association a backup to an existing Quartz Creek power line.
That power line is vulnerable to avalanches and is frequently out of service during bad weather, according to Dora Gropp, Chugach's manager for transmission projects.
Chugach said it received a final decision Oct. 9 from the Rural Utilities Services, the federal lead agency on the environmental impact statement analyzing two routes for the power line.
The Rural Utilities Services was formerly known as the federal Rural Electrification Administration.
The agency gave its blessing to a 61-mile route that generally follows a pipeline operated by Tesoro Alaska Petroleum Corp., over a shorter 38-mile route that crosses the Kenai National Wildlife Refuge and follows a natural gas pipeline operated by Enstar Natural Gas.
The "Tesoro" route will cost $10 million more than the shorter "Enstar" route, but the U.S. Fish and Wildlife Service refused a permit for the power line to cross the refuge.
Chugach said it preferred the shorter route across the Kenai refuge but said it would accept the route that was approved.
If the cost-sharing plan is signed by the six participating utilities, design and engineering will be completed and construction will begin, said Griffith.
Despite the time it has taken to get permits, the economics of the new transmission line are still attractive to Chugach, he said.
Gropp said there are additional wetlands permits and archeological studies to do along the final right of way, and there is always the chance of litigation that could delay the project.
If all goes as planned, the new transmission line will be in operation in 2006, she said.
The existing Quartz Creek transmission line was built in 1959. It can carry up to 75 megawatts of power, Gropp said.
When the new power line is finished the combined capacity of the new and old lines will be 125 megawatts.
The Kenai Peninsula has a substantial surplus in electric generation capability that is shared with Anchorage and utilities farther north, Gropp said. There are 240 megawatts of installed generation capacity on the peninsula, and only 90 megawatts of electric demand, she said.
The Bradley Lake hydroelectric project, near Kachemak Bay on the southern part of the peninsula, can generate up to 120 megawatts of power.
However, Chugach and other utilities are unable to get power over the Quartz Creek transmission line in bad weather. Because of its vulnerability to damage from wind and avalanche the power sent over the line is often reduced and even stopped when bad weather is forecast, Gropp said.
The second power line has been discussed since the early 1990s when the state Legislature appropriated $46.8 million to help pay for it. Route studies began in 1996, and since then, Chugach has spent $6.7 million on environmental studies and permitting.
Much of the cost of permitting came because three federal agencies were involved and there were frequent changes in the kinds of information the agencies asked Chugach to obtain, Gropp said.
"Our team would go back with information the agencies had requested, and each time they would ask us to do something new. Each time that happened, it would add $200,000 to the cost," Gropp told AIDEA's board.
Since the Legislature's appropriation of $46.8 million for the new transmission line, interest earnings have increased funds available for the project.
With $6.7 million spent on permits, there is $67 million available to pay for the project, according to Jim McMillan, executive director of AIDEA, which has been managing the funds for the project.
He said the remaining $33 million will be paid for by consumers, through payments to utilities who will buy power shipped over the line.
