Homer Alaska - Opinion

Story last updated at 3:39 PM on Wednesday, September 7, 2011

How does HEA's Grant Lake hydro project measure up?

Point of View

George Matz

I'm concerned. Recently I attended a special meeting of the Homer Electric Association board, the purpose being to allow the general manager to apply for an Alaska Energy Authority (AEA) grant to construct the Grant Lake hydro project near Moose Pass. Not realizing that the project had reached the point of construction, my intent was to ask questions about whether the feasibility studies and design adequately cover three areas of concern I have.

These concerns are:

1. Will the operation of the Grant Lake project affect salmon that spawn and rear in Grant Creek? The Grant Lake Environmental Baseline Report, 2009, states that, "Substantial numbers of chinook and sockeye salmon spawn along the stream margin and within limited gravel pockets."

In northern latitudes, operation of a hydro project often results in a downstream flow regime which is mostly opposite of the natural flow that anadromous fish depend on for spawning. The usual result is less fish. Unless fish are given priority over power generation (which utilities are loath to cede), fish and fisherman typically lose out. Given the current worrisome status of Kenai River king salmon, I don't think we can afford to lose any spawning or rearing habitat.

Serious fish impact could be an issue with the Grant Lake project. A revised report says, "With the proposed project in operation, the high flows in the summer will be stored and released later in the season. ... Generally, the flows in the reach of Grant Creek below the lake outlet will be reduced to the environmental flow requirement, which has not yet been determined."

Given that the board was asked to approve construction funding before stream flow requirements have been determined, it doesn't appear as if full mitigation of fish impact is a priority with this project. What happens if adequate mitigation drastically alters the feasibility of the project? Does HEA have the cart ahead of the horse; or to use a fishing analogy, are they setting the hook before casting?

2. Will methylmercury be a problem? Methylmercury can be an issue with hydro projects in the north. A good example is the James Bay Project in Quebec. "The first 30 years of studies in the James Bay area have confirmed that mercury levels in fish increase by three to six times over the first five to 10 years after the flooding of a reservoir, but then gradually revert to their initial values after 20 to 30 years. ... Increased levels of mercury in bodies of water however, could still potentially be harmful." (Source: Wikipedia)

Exposing Grant Creek salmon to elevated concentrations of methylmercury could impose a big problem on the entire Kenai River watershed; how would fishermen know which salmon have been contaminated with mercury, thereby being a health risk if eaten? And what does this do to Alaska's image of having wild, healthy fish?

Although the baseline studies apparently did measure for existing levels mercury in Grant Creek, it doesn't appear as if any effort was made to determine what effect the reservoir might have on increasing methylmercury concentrations.

3. Is Grant Lake an economically feasible project? In reviewing the reports, I could not find any economic analysis to demonstrate project feasibility. If properly done, an economic analysis would measure benefits and costs (including externalities such as impacts on fish) over the life of the project. This analysis would indicate not only if the Grant Lake project is feasible, but how it compares to other alternatives. Given that many options exist for power generation, a structured analysis is the only way to sort out where HEA should invest its time (including proposal writing) and money.

Based on conversations during the meeting, it seemed as if the only fiscal criteria that HEA management uses to determine project feasibility is not economic analysis but financing based on government grants. To me this is pandering, not professional management. It violates one of the cardinal rules of utilities; that is, the cost causer should be the cost payer. If HEA members aren't willing to pay for a project, it shouldn't be built.

Also, pandering is out of step with the more disciplined and less self-serving approach we need as a country to erase the deficits that are weighing down virtually every level of government.

Furthermore, because HEA is a co-op, not an investor-owned utility, it can and should take a broader view toward its operations and put priority on avoiding impacts that are important to its members — like salmon and outdoor recreation.

So I brought this list of concerns to the board meeting and was told I couldn't discuss them because the agenda did not allow for public comment. Nor did anyone really seem interested. The board went ahead and agreed to submit a construction grant proposal even though it's not clear that the project is economically or environmentally feasible.

There are other opportunities to discuss with HEA its process for determining project feasibility — or if there even is a process. During September, HEA will hold five area meetings which were listed in the last newsletter.

If you share any of the three concerns I mention above, this would be the time to bring it up. Hopefully, others will agree that if the Grant Lake project is not economically or environmentally feasible, it should not be built — even if we, as members, don't have to pay for its construction. The fact is, we will pay in other ways.

George Matz is a Homer resident who at one point in his career reviewed feasibility studies for state energy projects as a budget and policy analyst in the Office of Management and Budget. He writes that he also "is an avid conservationist who believes that energy, economic and environmental concerns can coexist if decisions are properly made."