An indigenous village company near Tok and the utility that serves that area have teamed up in a venture to build a small hydropower project that could reduce the area’s high energy costs. Alaska Power and Telephone officials said the partnership will now seek public and private funding and for the $ 19 million project.
Jason Custer, business development manager for Alaska Power and Telephone, said the partnership AP&T formed last month with Tanacross Inc. and the Village of Tanacross would allow the utility to reduce the amount of diesel it uses to produce. electricity in the Tok region.
“This hydroelectric project will allow us to supplant approximately 40 percent of the diesel fuel use currently in the Tok service area – which is a significant amount,” Custer said.
AP & T’s Tok region customers now have around 50 cents per kilowatt hour for electricity. Custer says the Yerrick Creek hydroelectric project could potentially lower that cost for customers in Tok, Tanacross, Tetlin and Dot Lake.
“We are quite confident that we should reduce the cost of energy to about half the current cost of diesel power,” he said.
A federal environmental assessment of the project estimates that Yerrick Creek would reduce electricity costs by about 20%, to about 37 cents per kilowatt hour.
The project involves the construction of a so-called “run-of-river” hydroelectric power station approximately 20 miles west of Tok, off the Alaska Highway. The facility would divert water from Yerrick Creek into a 42-inch pipe and then into a turbine, generating up to 1.5 megawatts.
Custer says the Upper Tanana Energy partnership is requesting an $ 8 million grant from the Alaska Energy Authority’s Renewable Energy Fund. He says the partnership will also seek $ 8 million in capital project credit from the legislature, as a back-up plan.
Custer says that once he secures public funding, the partnership will seek private funding. He says if all goes well, Yerrick Creek could be up and running in just over two years.
Tanacross Inc. chairman and CEO Bob Brean said he believes Tok-area taxpayers would be happy with a 20 percent tariff cut – or even just energy costs. stabilized and predictable.
“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 hurt the local utility’s ability to keep rates stable. I mean, that fuel oil price fluctuates all the time.
Brean says the high cost of energy has shaken the economy of the region, dependent on tourism.
“This is the kind of thing that can make or break businesses in the Upper Tanana region,” he said. “If hotels, grocery stores, and gas stations have very low margins because of what they have to pay for electricity, then anything we can do to help out there certainly helps keep these businesses open. . ”
Scott MacManus is a local who is very encouraged by the project. MacManus is an Assistant Administrator with the Alaska Gateway School District, based in Tok, and he is the driving force behind the construction of a biomass-fueled thermal and power plant at Tok School. The system burns wood waste collected from the region’s forests and has reduced the district’s energy costs by about a third over the past two years.
MacManus says he is disappointed that AP&T decided earlier this year to set aside a plan to build a 2 megawatt biomass thermal and power plant for the Tok region. Custer says company officials simply couldn’t pencil in the plan, due to uncertainties such as the price and availability of lumber.
But MacManus says that’s okay, because hydropower will accomplish the same goal of lowering energy costs with a clean, green renewable energy source.
“We are in favor of any kind of energy solution that creates local sustainability and creates local jobs,” he said. “And we are delighted that AP&T is proactive in working with our local communities to solve the electricity problem here.”
MacManus says he and others in Tok continue to work on a smaller biomass project that would provide heat and power to the heart of the city.