Though a $5 million federal grant to help pay for expanding the generating capacity at the Tyee Lake hydroelectric station is “clearly frozen,” the head of the Southeast Alaska Power Agency hopes the funds will be released soon and the project can stay on schedule.
The agency’s lobbyist in Washington, D.C., and others “feel fairly confident … that freeze will be thawed,” Robert Siedman, chief executive officer of the Southeast Alaska Power Agency, or SEAPA, said earlier this month.
The Tyee money is caught up in the nationwide spending freeze of federal funds ordered by President Donald Trump.
If the money is released soon, the project could stay on schedule, Siedman said. But if the freeze continues, “it does delay day by day the project.”
Wrangell and Petersburg need the power generating expansion to handle the increased load, particularly with a growing number of homes and businesses converting from diesel-fueled heating systems to electric heat pumps.
The project includes installing a third 10-megwatt turbine alongside the two existing power turbines of the same size at the Tyee generating station at Bradfield Canal, on the mainland across from Wrangell Island. Tyee went online in 1984.
The power agency’s plan — assuming no delays — is to start making power from the third generator in December 2027.
Design work is more than 90% complete and bids to supply the turbine were due Feb. 28, but SEAPA extended the deadline to March 21 after receiving interest from five or six potential suppliers, Siedman said.
The agency’s board of directors is scheduled to meet March 27 and could approve the turbine contract.
In addition to the $5 million grant previously approved by the U.S. Department of Energy, SEAPA is requesting $4 million from the state through a renewable energy projects grant fund at the Alaska Energy Authority.
That money is contingent on the state budget currently under construction in the Legislature. The governor requested funds for the energy grant program, but not enough to reach the Tyee project on the priority list. Legislators could expand the funding to cover Tyee, but state money is limited this year and the budget already is in a deficit.
SEAPA is pursuing additional federal funding under an investment tax credit program to get it close to the estimated $20 million price tag for the project.
State funding totaling more than $130 million covered the cost of building the Tyee power station and transmission line into Wrangell and Petersburg in the early 1980s.
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