Alaska Electric Light and Power will provide electricity to the Greens Creek Mine on Admiralty Island through an underwater cable, the companies announced.
"We see this as beneficial for the long term at Greens Creek," said Rich Heig, general manager of the Kennecott Greens Creek Mining Co.
All of Greens Creek's power is currently generated by burning diesel, he said.
Heig met Tuesday with AEL&P President and General Manager Tim McLeod to sign a 15-year agreement to make it possible for Greens Creek Mine to purchase hydroelectric power. The contract was expected to be filed by Tuesday with the Alaska Regulatory Commission, which could approve, reject or request revisions.
In addition to providing energy to the mine, the agreement over the next few years would tie Juneau and the community of Hoonah onto the same power grid, said Gayle Wood, office manager for AEL&P in Juneau. Hoonah is served by the Inside Passage Electric Cooperative, she said.
"Interties" between communities currently generating their own power in Southeast Alaska are an idea promoted by the Southeast Conference, an organization of area political and business leaders. By tying together communities, the region would be able to make better use of its electrical resources, Wood said.
The Southeast Intertie is owned and operated by the KWAAN Electrical Transmission Intertie Cooperative. Funding for the first phase of the northern section has been largely accomplished through two congressional appropriations, Wood said.
"This power sales agreement with Greens Creek will benefit Juneau, Hoonah and the mine," McLeod said. "Once the intertie is completed, Hoonah will benefit by the lower cost of energy and Greens Creek Mine's contribution to the operating and maintenance cost of the intertie.
Heig said the mine will benefit from AEL&P supplying a portion of its power because the cost of the utility's hydroelectric power is more stable than the cost of diesel.
Wood said Juneau will benefit because selling excess power to the mine will allow AEL&P to build its planned Lake Dorothy hydroelectric facility before the community's electrical consumption exceeds its current hydroelectric resources.
Without the agreement and power sales it would take longer for AEL&P to build the plant, which eventually could mean augmenting Juneau's hydro power with more expensive diesel.
Wood said the 9.5 mile underwater cable to Admiralty Island should be completed by the fall and Greens Creek could be supplied with power by the late fall or early spring.
Heig said he is hoping to have two power substations built by Greens Creek by the end of the year.
Tony Carroll can be reached at firstname.lastname@example.org.