State Lifts Spending Freeze on Susitna-Watana Hydro Project

After a spending freeze by the governor and multiple attempts by the legislative minority to place it back into the state’s general fund, the Susitna-Watana Hydro Project team will now be allowed to spend over six million dollars it has left from previous years.

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Last week, a memorandum from the state’s Office of Management and Budget lifted the spending freeze on the Susitna-Watana Hydroelectric Project instituted by Governor Bill Walker in December. Walker’s order had halted new spending on six projects, including the proposed 735-foot-high dam on the Susitna River.

At the time of the administrative order, the Alaska Energy Authority, the state corporation in charge of Susitna-Watana, said it had around $30 million remaining from previous appropriations. Of that, $6.6 million was unencumbered. The rest was already committed to studies for the proposed megaproject.

Emily Ford, spokeswoman for AEA, says, now that the funds have been freed up, the pre-licensing study process will continue through the Federal Energy Regulatory Commission.

“We’re just going to be picking up where we left off as part of this Initial Study Report Process. We essentially pushed a big pause button in the middle of that effort by filing for a license abeyance with FERC. So next, what we’ll do is lift that abeyance and resume with the FERC schedule.”

The money that AEA is once-again allowed to spend on Susitna-Watana represents just over three percent of total allocation to the current project proposal to date. Emily Ford says that means there are not currently plans for the type of large-scale research that took place in the Susitna Valley over the last two years.

“The focus and the goal is to preserve the investment that the state’s already made in the project by either wrapping up studies that are near completion or synthesizing data that was collected in the field and making sure that it’s in a usable format.”

After that, it will be up to the legislature and the governor to determine whether additional funds go to Susitna-Watana. AEA estimates the project’s cost at over $5.5 billion, and Emily Ford says that the agency plans to act based on the funding that the state’s fiscal reality allows.

On Thursday, the Talkeetna-based Susitna River Coalition, a group opposed to Susitna-Watana, issued a statement expressing disappointment with Governor Walker’s decision. The Coalition cites criticism by federal agencies, including the National Marine Fisheries Service, of studies conducted as part of the early phases of the project. Coalition board member Becky Long believes the decision runs contrary to Governor Walker’s stated policy goals, and that Susitna-Watana, if built, would be costly beyond the price tag for construction.

“We have to look at future litigation costs, future mitigation costs, and, in general, the governor has been talking up a lot about fiscal responsibility and fish-first policies. And we think this goes against those policies.”

Becky Long says the Susitna River Coalition is concerned that AEA may not be able to finish the studies already underway without cutting corners, which could lead to litigation.

Now that the fiscal picture has, at least temporarily, cleared, AEA plans to establish a new schedule with federal regulators. That schedule will include public meetings on the Initial Study Report completed last year. AEA’s Emily Ford says those meetings will likely occur in late fall of this year.