Back to work for Knik, Juneau and Susitna mega projects

Three of the state’s mega projects are back in business, at least temporarily, after Gov. Bill Walker’s administration partially lifted an administrative order halting spending on the development work.

State officials overseeing the Knik Arm bridge, the Susitna-Watana dam and the Juneau access road all got the go-ahead to continue work with existing funding in memos sent out by Office of Management and Budget Director Pat Pitney July 6.

Each of the memos notes that once authorized work is completed and immediate goals are met the projects will be evaluated in the context of the state fiscal environment and competing major capital projects at that time.

On Dec. 26 of last year Walker issued Administrative Order 271, which stopped spending on six projects in its tracks: the Knik Arm bridge; the Susitna-Watana dam; the Juneau access road; the Alaska Stand-Alone Pipeline, or ASAP, natural gas project; the Kodiak Launch Facility expansion; and the Ambler Mining District industrial access road.

At the time the governor said his administration would evaluate each of the projects and determine a path forward in light of lower oil prices and the resulting drastic decline in state revenue.

Knik Arm bridge

Department of Transportation and Public Facilities spokeswoman Shannon McCarthy said the department will pretty much pick up where it left off when work stopped in December.

That work includes securing funding and a key remaining environmental permit.

In early 2014, the 1.7-mile bridge and about 4.5 miles of associated connections between Anchorage and Point MacKenzie were estimated at a cost of $782 million. The state’s three-pronged financing plan has contingencies to allow for that cost to grow to $894 million without issue.

Pitney wrote in the memo that moving forward with existing appropriations would give the state up to 20 years to address the bridge without needing to pay back federal money already spent.

Project leaders have said the $55 million state capital appropriation to the project in fiscal year 2015 is sufficient to get it to construction.

McCarthy said DOT would now advance its letter of interest for a $300 million federal Transportation Infrastructure Finance and Innovation Act, or TIFIA, loan, which would cover about a third of the project cost. Yearly Federal Highway appropriations and state bonds would roughly equally cover the rest of the cost under the plan.

The department also needs to finish up the final requirements for its National Marine Fisheries Service Marine Mammal Protection Act permit. That is needed to approve an in-water construction plan in Knik Arm that would not impact endangered Cook Inlet beluga whales, which feed in the arm each summer.

“The National Marine Fisheries permit is really what all the other permits hinge on at this point,” McCarthy said.

Right-of-way acquisition and obtaining and a needed easement through Joint Base Elmendorf-Richardson will also resume. McCarthy noted that approval of the state easement through the military installation goes all the way to the Secretary of Defense, which will take some time.

The six-month delay likely pushed first construction back to 2017 at the earliest, she said.

Susitna-Watana hydro

The Alaska Energy Authority can spend the $6.6 million it has left from $192 million of previous capital appropriations to move forward on work related to the $5.6 billion Susitna-Watana dam.

AEA spokeswoman Emily Ford said the authority was in the midst of the study report process on Susitna-Watana for the Federal Energy Regulatory Commission.

If constructed, the dam in the upper reaches of the Susitna Valley would to stabilize electric rates for Alaska’s Railbelt region for generations, proponents tout. Critics of the project claim AEA’s cost estimates are shaky and argue it would harm salmon returns to the Susitna by altering natural flood cycles.

The next steps are less about intensive fieldwork and research and more about holding public meetings with stakeholders on the study plan.

“Hopefully next year we’ll work towards the study plan determination with FERC,” Ford said.

That determination — whether AEA has met its federal requirements — is the next major step for the project.

The memo states that AEA should work through 2017, at which time the Walker administration will review the Susitna-Watana dam again.

Juneau access road

The cheapest of the three projects, pegged at $574 million to build, is the 48-mile Glacier Highway extension north of Juneau.

In September, DOT released a draft supplemental environmental impact statement, which included its preferred alternative to build the road parallel to Lynn Canal.

Spending the remaining $900,000 in general fund appropriations to the project should allow the state to complete the supplemental EIS and reach a record of decision on the project, expected in January 2016. Doing so would ensure the state does not have to repay $27 million in federal investment on the project, according to Pitney’s memo to DOT Commissioner Marc Luiken.

Those opposed to the Juneau road extension claim it would actually make traveling to Juneau from Haines and Skagway more difficult, as the Auke Bay ferry terminal near Juneau would be closed in favor of a terminal at the end of the road.

As for the other projects, the Alaska Stand Alone Pipeline project natural gas line, has been shelved for now as the Legislature pulled funding for its development in a battle with the governor, who is interested in expanding its scope.

All but $3 million of the original $25 million in capital funding to the Kodiak Launch Facility has been put back in the general fund, according to Walker’s Press Secretary Katie Marquette.

“As of this year, the state no longer subsidizes the operation with general funds. The state will continue to evaluate the project in December as they are moving toward a more private partnership mode,” Marquette wrote in an email to the Journal.

Funding early environmental work by the Alaska Industrial Development and Export Authority for the 220-mile Ambler Mining District road is still being evaluated by the administration.

Elwood Brehmer can be reached at [email protected].

11/20/2016 - 3:36pm