Oil, gas get funding, renewables get vetoed

Posted: Wednesday, June 09, 2010

Gov. Sean Parnell's cuts to renewable energy projects, including some important to Southeast, are receiving criticism - and many questions.

The cuts came while other energy projects aimed at oil and gas development received funding.

Parnell slashed in half the $50 million renewable energy grant fund approved by the Legislature, and also cut by half appropriations made for individual hydroelectric projects in Sitka and Ketchikan.

"It seems like there were a lot of energy projects that were vetoed, and I'm not sure why he did that," said Rep. Kyle Johansen, R-Ketchikan and House Majority Leader.

Ketchikan had requested $16.7 million for its Whitman Lake Hydroelectric Project, but Parnell surprised local leaders by slashing that to $1 million.

Johansen said he was surprised by the cut, because he'd talked about the project with Parnell, and heard no objections to it.

Parnell's Office of Management and Budget said the project could be funded in future years.

Johansen said Ketchikan is reaching the end of its power generation capability and needs to add a new generator to ensure it will have enough power available in the future. He said he received no indication from Parnell it might be vetoed when he explained it to the governor.

"This is a part of the Southeast energy grid that we really needed," Johansen said.

Sitka was disappointed to lose half the funding it sought for its Blue Lake Hydroelectric Project expansion. Sitka has exceeded the capacity of its hydro projects and is having to burn diesel to make up the difference.

Raising Blue Lake Dam by 83 feet and increasing its power generation capacity from 8 megawatts to 18 megawatts is expected to cost the city about $100 million.

Having its appropriation cut from $15 million to $8 million this year is a setback, said Marlene Cambpell, the city's governmental relations manager.

"It doesn't stop our project, but it certainly means we'll be back next year" seeking more funding, she said.

Rep. Beth Kerttula, D-Juneau, said she was surprised to see the cuts made to renewable energy programs following Parnell's public support for boosting use of renewables.

Many of the vetoed project will ensure homes and businesses in smaller communities have dependable, low-cost power and remain viable, she said.

"Some of these energy cuts seem to be poor ones to make if you want the villages to be able to be self-sufficient," she said.

Speaking on the Alaska Public Radio Network's "Talk of Alaska" program Tuesday, Rep. Harry Crawford, D-Anchorage, called Parnell's vetoes "short-sighted."

Crawford has been a long-time advocate of renewable energy and was particularly critical of the cuts to the renewable energy fund.

Parnell had first proposed it for $25 million, but legislators had bumped it up to $50 million, before Parnell cut it back to the original amount.

Parnell said he approved spending on $177 million in energy projects despite the vetoes, but those appear to be mostly oil and gas projects.

He cited in-state and large-diameter gas pipeline projects as among the energy projects he supported. Parnell also said he supported money for a road to Umiat on the North Slope, opening that basin to oil and gas development.

One renewable energy project that made it through the veto process unscathed was $10 million for the Railbelt for large scale hydro planning, design and permitting by the Alaska Energy Authority.

Parnell defended the renewable fund cuts by saying that $125 million for renewable projects appropriated last year hadn't been spent yet.

"The reason that I did that is I learned we've only gotten 25 percent of the $125 million out on the street, due to a whole host of issues," he said. "My view was we didn't need to add another $50 million when we were having trouble getting money on the streets."

He said steps were being taken to get the renewable projects going.

• Contact reporter Pat Forgey at 523-2250 or patrick.forgey@juneauempire.com.



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