Federal energy regulators will decide soon whether to allow a firm to move forward with preliminary studies on hydroelectric power to supply the Kensington Mine in Berners Bay.
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A decision to authorize the initial studies for the project could be rendered either in several weeks or more than two months, federal regulators said Tuesday.
Due to new competition over the project, the timeline for approval could be a few months, rather than a few weeks.
The Port Townsend, Wash.-based Alaska Power & Telephone Co. filed a preliminary application in March to tap energy from a small, kidney-shaped alpine lake, 3,160 feet above Berners Bay's largest braided tributary, the Lace River.
A second firm, Green Power Development of Anchorage, filed a competing preliminary application this week.
The deadline for submitting a competing proposal is Thursday, said Barbara Connors, a Washington, D.C.-based spokeswoman for the Federal Energy Regulatory Commission.
After receiving a competing proposal, the commission must issue a second public notice, with a 60-day public comment period, Connors said.
Already, the possibility of additional industrial development in Berners Bay is getting scrutiny from environmentalists and public land agencies.
Among those that have taken interest in the Berners Bay hydro proposal so far: the National Park Service, the U.S. Forest Service and Juneau-based Alaska Electric Light and Power Co.
Questions raised so far by federal agencies include the project's potential effects on salmon stocks and wildlife and the Lace River's potential eligibility for designation as a "wild and scenic river."
AEL&P's letter says "small-scale hydroelectric projects need to be considered within the realm of the (Southeast Alaska Electrical Intertie System Plan) and how it will affect the electrical needs of all consumers."
The Berners Bay project - which may or may not include a dam - is within the Tongass National Forest. Scenic guidelines in that area are "among the most restrictive" in the Tongass Land Management Plan, according to the Forest Service's June 26 letter to the commission.
The project has significant economic benefits, according to its backers. It could eliminate Coeur Alaska's need to burn 2 million gallons of diesel per year to fuel mine operations, according to Alaska Power & Telephone.
The utility's competitor is an Anchorage firm that first pursued hydropower for the mine in the 1990s.
The firm, Polarconsult Alaska, spent a year studying the feasibility of tapping the same lake, but withdrew its proposal in 1997 after Kensington Mine developer Coeur Alaska pulled its support for the project. Polarconsult is still interested in the project, and recently had sent letters to Coeur Alaska about it, according to president Earle Ausman.
On June 21, Polarconsult spin-off Green Power Development told regulators it "unequivocally intends to submit a competing preliminary permit application."
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