Gov. Sean Parnell and the Alaska Energy Authority announced Wednesday they are endorsing development of a large Susitna River hydroelectric project.
The project is envisioned to supply half of Southcentral Alaska's electricity demand, substantially reducing the region's reliance on declining Cook Inlet natural gas supplies.
The size of the project is much smaller than the Susitna dam proposals that flopped in the 1980s. With multiple dams proposed, those earlier projects would have created a huge surplus of Railbelt electricity and wiped out a lot of salmon habitat.
But Susitna is still a big project, pegged at $4.5 billion in 2008 dollars. In a 51-page report published Wednesday, the energy authority estimated the project could be finished in 11 years, and if the state pays half of the cost to build it, generating the power would cost 6 cents per kilowatt hour. The region's largest electric utility, Chugach Electric, pays the same generation cost for the natural gas it uses.
The energy authority's report recommends Susitna over another large hydroelectric proposal, the Chakachamna Lake project on the west side of Cook Inlet. That's a big change: Chakachamna had looked more attractive than Susitna until new technical findings about the two projects were produced this year, according to Joe Balash, an energy adviser in the Parnell administration.
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