This Juneau Hydropower Inc. photo shows an overview of the Sweetheart Lake Hydroelectric Project site. (Courtesy Photo / Robert Johnson)

This Juneau Hydropower Inc. photo shows an overview of the Sweetheart Lake Hydroelectric Project site. (Courtesy Photo / Robert Johnson)

Sweetheart Lake project still in the works after partnership ends

Permit application withdrawn after Tokyo-based partners terminate agreement.

A long-gestating project that could greatly increase Juneau’s power supply has hit a snag but is moving forward, as a hydropower facility at Sweetheart Lake remains a priority, according to Juneau Hydropower Inc. managing director Duff Mitchell.

“Juneau Hydropower will continue to work with AIDEA, the State of Alaska, the Attorney General’s Office, the Department of Law, Regulatory and Public Advocacy, the Regulatory Commission of Alaska, AEL&P, and the Couer Alaska Kensington Mine as we proceed forward,” Mitchell said in a statement. “Juneau Hydropower is appreciative of its public support and assures that the project will be a cornerstone hydropower for Juneau’s energy future.”

Earlier this month, Juneau Hydropower formally withdrew its application for a certificate of public convenience and necessity from the state regulatory commission for a proposed hydroelectric facility on the east shore of Gilbert Bay. The Sweetheart Lake Hydroelectric Facility has been in the works for over a decade, and could boost the supply of electrical energy in Juneau by up to 25%, according to planners.

The withdrawal cited the unexpected termination of an agreement with Tokyo-based developer J-POWER that helped Juneau Hydropower be “managerial, technically and financially fit.”

Regarding J-POWER’s termination of the agreement, Juneau Hydropower released a statement which indicated that on May 1, 2023 J-POWER communicated that it was “very unlikely” to proceed with the project and “almost certainly” would soon to terminate the Joint Development Agreement.

Despite the setback, Mitchell said the company continues to “vigorously” pursue the $200 million project.

“We have to build at Sweetheart Lake, and we need to build the transmission line to the Kensington Mine,” Mitchell said. “We’re significantly expanding Alaska’s grid but even more significantly expanding Juneau’s grid. We’re opening up land in the north end of the borough for development and it’s on clean energy as opposed to running it off of diesel. Kensington on a good day burns more diesel and generates more electricity than Haines or Skagway combined.”

Mitchell further said that the Juneau docks currently represent about 16.7% of greenhouse gas emissions in Juneau and the Kensington Mine about 17%. Mitchell said electricity generated by Juneau Hydropower would provide sufficient power to electrify Juneau’s docks and curb those numbers.

“It could completely take all of the diesel that’s being burned, which is millions and millions of dollars a year out of the atmosphere and also lower the cost of power for our second largest taxpayer and employer in Juneau.”

The partnership between Juneau Hydropower and J-POWER was announced in a news conference last year that featured Gov. Mike Dunleavy, as well as an international group of developers. At the time of the announcement, developers predicted the project would break ground this summer.

Despite the agreement termination, Mitchell said much work has already taken place at the location site and progress continues to be made, though no firm timelines have been established at this time.

“We’ve spent hundreds of thousands of dollars on geotech studies, we’ve upgraded all of our design,” Mitchell said. “In that geotech study we moved the dam site a little bit so that we’re now on even better bedrock than we were before.”

Juneau Hydropower wishes to continue with the project, according to the withdrawal and will search for other investors and partners and may file a new application certificate of public convenience and necessity at a later date, but “does not believe it is appropriate to go to a hearing or spend further time on the application in light of this turn of events.”

Mitchell further said that due to recent financial incentives that have been made available through the Inflation Reduction Act, along with other Federal programs that could help lower the cost of power, it’s possible the project could be completed financially with solely Juneau investors.

• Contact reporter Jonson Kuhn at jonson.kuhn@juneauempire.com.

Sweetheart Lake’s outlet shown here from September of 2023. The hydroelectric project is said to continue making progress in good faith despite a recent application withdrawal after Tokyo-based developer J-POWER’s termination of a prior Joint Development Agreement. (Courtesy Photo / Duff Mitchell)

Sweetheart Lake’s outlet shown here from September of 2023. The hydroelectric project is said to continue making progress in good faith despite a recent application withdrawal after Tokyo-based developer J-POWER’s termination of a prior Joint Development Agreement. (Courtesy Photo / Duff Mitchell)

A westward view of Sweetheart Lake. (Courtesy Photo / Duff Mitchell)

A westward view of Sweetheart Lake. (Courtesy Photo / Duff Mitchell)

An east view of Sweetheart Lake. (Courtesy Photo / Duff Mitchell)

An east view of Sweetheart Lake. (Courtesy Photo / Duff Mitchell)

The Forest Service’s high altitude aerial photo of Sweetheart Lake shows the entire project and the lake, which is 5.5 miles long and 1/2 mile wide. (Courtesy Photo / USFS)

The Forest Service’s high altitude aerial photo of Sweetheart Lake shows the entire project and the lake, which is 5.5 miles long and 1/2 mile wide. (Courtesy Photo / USFS)

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