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November 4, 2022 at 2:26pm

AEA Board Approves Bonding for Transmission Upgrades and Battery Storage

Download AEA News Release_Bradley Lake bond financing.pdf

The Alaska Energy Authority (AEA) Board of Directors on October, 26, 2022, unanimously approved an estimated $175 million in bond financing to improve the efficiency and capacity of power from the Bradley Lake Hydroelectric Project. The bonding by AEA, in partnership with the Railbelt utilities, will be at no additional cost to ratepayers and with no burden on the State treasury. Closing of the bond transaction is expected to take place on or before December 2, 2022. 

The bond proceeds will be used solely to pay for transmission line upgrades and battery energy storage systems that will reduce the constraints on the Railbelt grid by improving the Kenai Peninsula’s transmission capacity to export power from Bradley Lake, while also allowing for the integration of additional renewable energy generation. Funding for the projects is coming from the excess payments made by the five Railbelt utilities after the Bradley Lake bonds were paid off. These projects include:

  • Upgrade Transmission Line between Bradley Lake and Soldotna Substation
  • Upgrade Transmission Line between Soldotna Substation and Sterling Substation
  • Upgrade Transmission Line between Sterling Substation and Quartz Creek Substation
  • Battery Energy Storage Systems for Grid Stabilization

The “Railbelt” refers to the interconnected electric grid that stretches approximately 700 miles from Fairbanks through Anchorage to the Kenai Peninsula. About 70 percent of Alaska’s population is served by the Railbelt electric system. Four member-owned electric cooperatives and one city utility sell power to Railbelt customers. The Railbelt’s energy systems have undergone significant change since they went into service more than 40 years ago. Over this period, loads have increased, transmission assets have aged, and greenhouse gases have become an increasingly important factor. In addition, cost-saving power sales between utilities have increased, demanding more of the system, and soon, regional integrated resource planning will increase the benefits of sharing power throughout the region.

Owned by AEA, Bradley Lake is an important generating plant on the Railbelt and the largest hydroelectric plant in Alaska. Located approximately 27 miles northeast of Homer on the Kenai Peninsula, the 120-megawatt facility generates 10 percent of the total annual electrical energy used by Railbelt electric utilities and provides some of the lowest-cost power in the state to about 550,000 Alaskans from Homer to Fairbanks.

Bradley Lake is managed by the Bradley Lake Project Management Committee, which is comprised of a representative from each of the five Railbelt utilities and AEA. Each utility has paid a portion of the annual debt service on the original bonds since Bradley Lake was completed. The bonds were paid off in 2021 and under the Power Sales Agreement; the Railbelt utilities continue to make annual payments until 2050. These funds are now available to be used for upgrades related to the Bradley Lake project. The Department of Law has determined that the proposed transmission upgrades are required project work that benefits Bradley Lake and Railbelt ratepayers.

The Railbelt utilities are Chugach Electric Association (Chugach), Golden Valley Electric Association (GVEA), Homer Electric Association (HEA), Matanuska Electric Association (MEA), and the City of Seward.

The Alaska Energy Authority is a public corporation of the state. Its mission is to reduce the cost of energy in Alaska.

For more information, contact Julie Hasquet, (907) 717-9619