The latest attempt to connect Kensington gold mine to Juneau’s power grid has blown regulatory fuses.
In a decision dated Dec. 3, the Regulatory Commission of Alaska denied a permit request by the Lynn Canal Transmission Corporation, citing the company’s failure to disclose financial documents.
“We reject Lynn Canal’s application for a certificate as being incomplete,” the commission stated in its order.
Regulators rejected the proposal “without prejudice,” which means the company may submit it again with the proper documents.
Lynn Canal is a nonprofit company backed by Alaska Power and Telephone, Juneau Hydropower Inc. and Coeur Alaska, the owner of the Kensington mine. LCTC is closely linked to the proposed Sweetheart Lake hydroelectric dam, which is envisioned as a power source for Kensington. The gold mine at the north end of Berners Bay is currently served by diesel-fired generators on site.
Jason Custer, an Alaska Power and Telephone employee assigned to Lynn Canal Transmission, said despite the RCA’s rejection, the companies involved believe “the service is very much needed. The Kensington mine is dependent on diesel fuel. There are viable renewable energy assets in the Juneau area. It only makes sense to put the two together.”
While the idea might make sense — previous efforts have received the support of the Southeast Conference, City and Borough of Juneau, and state politicians — it’s proven tough to implement. A 2006 proposal from AP&T involved a lake-tap hydroelectric power plant above the Lace River, in the mountains east of Berners Bay. That project never proceeded, and cost has been an obstacle for other efforts.
A feasibility study from May 2015, commissioned by Alaska Electric Light and Power, found that building a new high-voltage line from the Lena Point substation to Kensington would cost $31.45 million.
Both the AEL&P plan and the one proposed by LCTC envision a high-voltage line from the Lena Point electrical substation to Cascade Point. From there, an underwater cable would carry power to a landing at Slate Cove, on the north side of Berners Bay, then on to Kensington.
Custer declined to discuss LCTC’s financial situation or why the company did not include financial documents in its filings, but according to its regulatory commission filings, it intends to seek a $22 million loan from the Alaska Industrial Development and Export Authority. Whether that would be sufficient to build LCTC’s plan or if it would need additional financing is unclear.
In comments to the regulatory commission, Alaska Electric Light and Power said LCTC must reveal the financial basis behind the project. The company worries that if the Kensington power line was partially built, “AELP might be required (or pressured), even if only by practical considerations, to assume some level of responsibility for the line,” filings state.
In other comments, AEL&P said it “is not necessarily opposed to construction of a transmission line.”
Custer did not explicitly state that construction of the line to Kensington would be contingent upon construction of the Sweetheart Lake hydroelectric dam, but “you definitely need a customer at one end of the line and a resource at the other end of the line.”
From AP&T’s perspective, the proposed power line could lead to Haines and Skagway, connecting those cities to Juneau’s power grid.
“The first step would be connecting to Kensington, so that makes the most sense,” Custer said.
AP&T is also pursuing an electrical link between Skagway and Whitehorse, and the possibility exists that the line from Juneau to Kensington could be the first step to a regional electric grid. That notion is years away from reality even in the best-case scenario, however.
“You kind of build these things out incrementally based on demand,” Custer said. “We can only do things that make economic sense.”
