Hydroelectric Project

Old Harbor Hydroelectric Project Summary

The Alutiiq Tribe of Old Harbor (ATOH), in collaboration with its partners Old Harbor Native Corporation (OHNC), Alaska Native Tribal Health Consortium (ANTHC), and Alaska Village Electric Cooperative (AVEC), are finalizing the design and permitting to construct a run-of-the-river hydroelectric facility with a diversion structure, pipeline, powerhouse, and electric transmission line. 

The project will have a low flow capacity of 140 kW and a peak capacity of 525 kW. The project will collect and divert up to 11.8 cubic feet per second of water year-round from Barling Bay Creek's tributary (Mountain Creek) and transport it across a basin boundary to the Lagoon Creek tributary just west of Old Harbor. The project will be operated automatically and primarily in stand-alone mode as the community's primary source of electrical generation. The project would generate about 3,470,000 kilowatt-hours (kWh) of energy annually. The proposed project would reduce diesel fuel use for power generation by at least 95%. 

Like most rural Alaskan communities, Old Harbor relies on a small set of diesel generators and diesel fuel delivered by ocean barge to supply its power needs. A hydroelectric project would almost completely eliminate the use of diesel fuel for electrical generation and stabilize energy costs in Old Harbor. 

This project promotes the Tribe's goals to increase tribal sovereignty and community and grid resiliency, lower the cost of living, create permanent local jobs, decrease factors leading to outmigration, lower pollution, eliminate utility shut-offs, and strengthen local electrical and sanitation infrastructure. The ATOH will sell hydroelectricity for 80% of the avoided cost of a gallon of fuel, which will reduce total electricity rates by 6-7% before the PCE subsidy. The Tribe will use power sales to subsidize residential utility bills, ensuring no house has water or lights shut off for non-payment for the next 50 years. By having the Tribe operate as an Independent Power Producer, they overcome the PCE program's disincentive to renewable energy adoption and increase economic benefit to residents.

According to the Old Harbor Hydroelectric Project Reconnaissance and Feasibility Study, during the first year of operation, the project could avoid approximately 56,451 gallons of diesel use or $296,372 using the June 2023 diesel fuel price of $5.25 per gallon. Using simple payback, the benefits outweigh the costs (ROI) at 33 years out of a 50-year operational life. According to EIA.gov, it would avoid 31,683 tons of CO2 emissions. 

Disadvantaged residents struggle to keep the lights and water on, and the average monthly household electrical bill is $264. AVEC shut off power to 22/86 of Old Harbor households in 2022, putting subsistence foods at risk. The City, which owns and operates Old Harbor's sanitation system, charges 45$ a month for residential water service. 59 out of 96 water accounts are behind, with 17% owing over $1,500. The lack of ability to pay for essential services jeopardizes the residents' health and subsistence capacity. The energy cost burden for electricity, home heating (397 gallons for an average household at $7.50/gallon), and water annually per household is 50.5% of their median household income, which is over 6 times higher than the national average for low-income residents.

The Tribe proposes to divide net profits to each household after operations and maintenance (O&M) are met to eliminate utility bill shut-offs. If a 30% capital and O&M reserve are met, remaining profits at today's fuel price equate to approximately $2,400 subsidy for each household. This subsidy will pay the annual water bill and half of an average residential electric bill. This project will give residents continued access to clean water and electricity regardless of ability to pay and fewer negative health impacts from emissions related to burning diesel. This community benefits IPP demonstration can be replicated in almost all 209 rural villages with a renewable resource, tribal entity, and an electrical utility.

The project would provide other long-term socio-economic benefits to village households. Locally produced, affordable energy could help avert high energy costs, which are one of the contributing elements of rural-to-urban migration. In addition, Old Harbor residents' health and safety could improve from the environmental benefits resulting from a reduction of hydrocarbon use, including reduced potential for fuel spills or contamination during transport, storage, or use (thus protecting water and subsistence food sources), improved air quality; and decreased contribution to global climate change from fossil fuel use.

History

·         The Native Village of Old Harbor leadership has expressed interest in developing hydroelectric power since the 1970s. Our community has worked with AVEC on several projects, including wind and hydroelectric feasibility studies. 

·         In 2000, the Federal Energy Regulatory Commission (FERC No. P-11690-006) issued AVEC a license for the Old Harbor Hydroelectric Project. However, AVEC determined that the proposed project was not feasible due to the decreased price of diesel and the high cost of the mitigation measures required by the resource agencies. AVEC did not construct this project, and the license was terminated in 2005. 

·         AVEC was issued a preliminary permit (P-13272) for the Old Harbor Hydroelectric Project, which expired on December 31, 2011. During the term of the preliminary permit, AVEC developed a Notice of Intent and Preliminary Application Document, Proposed Study Plan, and FERC-approved Study Plan; conducted required meetings; completed required field studies; and finalized a Study Report. 

·         In 2015, the final Environmental Assessment was issued, and in 2016, the Federal Energy Regulatory Commission issued a license (Project No. 13272-006) for the Old Harbor Hydroelectric Project.  

·         In 2018, a 2-year license extension was filed and issued. In the Fall of 2018, Congress passed the Water Resources Development Act 2018 (WRDA '18), which contained several Hydroelectric power-related provisions, including one that allows for an 8-year expiration timeline for the FERC license. 

·         In 2022, OHNC, in partnership with the Innovative Readiness Training Program and the US Army, built a 2-mile road to the powerhouse site. 

·         On September 21, 2023, a two-year extension was granted on the license (P-13272-004), with the commencement of construction deadline set for April 29, 2026, and the completion of construction deadline set for April 29, 2029. 

·         In July 2024, the FERC approved the permit transfer from AVEC to ATOH.

·         In 2024-2025, ATOH was awarded several grants, allowing the project to progress.  

·         September 14, 2024 Design-Build Request for Proposals (RFP) closed

·         November 2024, McMillan was awarded the contract for an expedited design-build construction

·         February 2025, McMillan delivered 35% Design

The following funding has been granted for the Old Harbor Hydroelectric Project:

Department of Energy

Office of Clean Energy Demonstrations (OCED) $10,000,000

US Department of Housing & Urban Development (grant agreement not executed)

Congresswoman Peltola – Community Project Funding $500,000

BIA – Tribal Community Resilience (grant agreement not executed) $3,548,247

Denali Commission $1,000,000

Old Harbor Settlement Trust (OHST) $1,250,000

Matching Funds

Old Harbor Native Corporation/ATOH (In-Kind Project Management) $250,000

TOTAL

   $16,298,247

Previous funding sources include Alaska Energy Association ($462,500) and the City of Old  Harbor through CDBG program ($250,000) as well as local in-kind contributions from AVEC and OHNC. This funding was utilized to develop the feasibility study, FERC application, permitting, and the preliminary geotechnical and design. 

The Department of Energy Office of Clean Energy Demonstrations, Bureau of Indian Affairs Tribal Community Resilience, Denali Commission, HUD Community Project Funding grants, and Old Harbor Native Corporation Settlement Trust financial contribution are making this project a success. We are incredibly thankful to our funders, who are advancing this project to lower utility costs, provide reliability, reduce environmental impact, and strengthen Old Harbor's economic resilience. The Native Village of Old Harbor is forever grateful for the support of this project.

Quyanaasinuq – Thank you very much!

Contact:

Cynthia Berns, Project Manager                                cberns@oldharbor.org

Katya Karankevich, Project Manager                         yakarankevich@anthc.org