A new fiscal analysis of the Susitna-Watana Hydroelectric Project questions the Alaska Energy Authority’s estimates on how much the 735-foot tall dam would cost the State of Alaska, if built.
Economist Gregg Erickson released his analysis of the financial picture of the Susitna-Watana Hydroelectric Project Monday. Trout Unlimited, a conservation group that opposes the project, commissioned the report. Erickson has worked for the University of Alaska Anchorage, a Washington D.C. think-tank, and held multiple roles for the State of Alaska. From his perspective, he thinks Susitna-Watana doesn’t pencil out.
“There is no market test that this proposed project meets. There’s every evidence that they’ve underestimated the cost and overestimated the demand,” Erickson says. “It doesn’t seem at all likely that the project could be built without very, very large amounts of state subsidy.”
Erickson says that the Alaska Energy Authority and its predecessor, the Alaska Power Authority, have a history of projects going over budget, including Bradley Lake and the Healy Clean Coal Plant.
Wayne Dyok, Project Manager for Susitna-Watana, maintains that AEA believes its $5.2 billion dollar estimate is reasonable for construction of the proposed dam. He says that claim is backed up by a third-party review.
Another concern for AEA is state funding. In the last five years, the state has spent over $190 million on the project. According to AEA, about $90 million more is still needed to complete federally required field studies in the area. The project received $20 million last year and outgoing Gov. Sean Parnell budgeted only $20 million for the next fiscal year.
Dyok says AEA plans to work with Gov. Bill Walker and legislators to keep Susitna moving forward. Walker made it clear during his campaign that he intends to take a close look at the state budget, and that some projects may end up on the cutting room floor.
