Dreams, Risks and Realities:
An Economic Analysis of Plans to Dam Alaska’s Susitna River
an economic report by Gregg Erickson
The Alaska chapter of Trout Unlimited contracted with Erickson & Associates to analyze the opportunity costs of a decision by the state to build a proposed Susitna-Watana Hydroelectric Project. The report summarizes policy issues confronting the state as it considers the opportunities and risks of major investments in the multi-billion dollar project.
The Alaska Energy Authority has underestimated the costs to build Susitna.
The Alaska Energy Authority (AEA) estimates it will cost $5.2 billion to build the project. This estimate excludes important costs, such as $880 million in new transmission facilities required to move Susitna power through or along the routes of existing transmission facilities. Also excluded are yet-to-be-negotiated costs of leasing or purchasing the Native lands on which much of the project will sit. Read More…
The proposed in-state gas pipeline project and Susitna hydro project compete for the same market.
There are also competing needs for the state’s reserves. Whatever money the state invests in Susitna will be unavailable for other state policy priorities. Perhaps most importantly, use of the state’s cash to finance Susitna competes with the alternative of using the reserves to forestall a hard landing for the state budget and economy. Read More…