CEO: Hydropower will bring the heat

The minds behind Juneau Hydroelectric Inc. are in hot water – and that’s just the way they want it.

At a session of the Juneau Innovation Summit today in Centennial Hall, the backers of the Sweetheart Lake Hydroelectric Project will unveil their plan to bring clean, cheap heat to downtown Juneau. If it sounds too good to be true, they say they’re not just talking about it – they’re putting up their own money to make it happen without the help from the state or City and Borough of Juneau.

“We think we’re on to something here,” said Duff Mitchell, managing director of Juneau Hydropower. “We’re not asking for sales tax abatements, we’re not asking for property tax abatements, we’re not asking for anything for this. We’re basing this on the good old American way where you borrow the money.”

Juneau Hydropower is the company behind the Sweetheart Lake Hydroelectric Project, a 19.8-megawatt dam and powerhouse planned for a site about 20 miles southeast of Juneau. The project has been in the works for years and is almost finished with federal permitting, but questions have persisted about the need and market for the project’s electricity.

Last year’s announcement that Juneau Hydropower had partnered with Coeur Alaska Inc. on a subsidiary to build a high-voltage power line to Kensington Gold Mine resolved part of the mystery. Kensington burns diesel fuel to generate about 10 megawatts of electricity for the mine.

Kensington would consume about half of Sweetheart’s power production, and until Mitchell and company CEO Keith Comstock revealed their plans Monday, the destination of the power plant’s remaining electricity was unclear.

Speaking to the Empire from their offices in the Kootznoowoo building beneath Canton House, Comstock and Mitchell said they envision a $25 million “district heating” plant and infrastructure similar to that of some European cities.

The pair are pursuing a low-interest federal clean-energy loan to pay for the effort, but if that doesn’t come through, they’ll turn to the investment market.

The plant would generate heat in a fashion not unlike a reverse refrigerator. If you have a hard time envisioning that, hold your hand over your refrigerator’s heat exhaust vent. Instead of using air (as in your refrigerator or a home heat pump), the plant would take in water from Gastineau Channel, and remove the heat from the water. That heat would be passed through a network of hot water pipes that connect to the existing boilers of homes and businesses.

Similar systems are already working at NOAA’s Ted Stevens marine lab in Auke Bay, the Seward SeaLife Center, and in cities across northern Europe.

Owners of buildings connected to the new system wouldn’t have to change their heating systems; they’d continue to use their own boilers, but the hot water would come from a central source instead of burning oil locally.

“We’re looking for a solution where the costs of conversion were as close to zero as possible,” Comstock said.

The central plant won’t be selling water; it’ll be selling heat, a legal distinction meaning that it won’t fall under state regulations governing utilities.

The hot-water network will be small to begin with – the cost of insulated piping is a limiting factor, the pair said – but it can grow as demand does.

Connecting a home to the central heating network would cost a few hundred dollars to a thousand, Mitchell said, and added that connecting a large building like the State Office Building would cost in the “tens of thousands” of dollars.

In exchange for converting, the pair are pledging cheaper, more reliable heat, and the cost of installation may be factored into a customer’s monthly bill.

“Even at current oil prices, I believe I will be competitive,” Comstock said, and because he expects oil prices to rise in the future, the system makes sense.

“That’s the part that got me excited about the project because it’s sustainable in the long term, and cheap energy means jobs,” he said.

The formal unveiling of the central heating project will take place at 10:30 a.m. today in Centennial Hall.

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