Glacier Bay hydropower plan debated

Indian association joins environmentalists to block electricity project for Gustavus

Posted: Sunday, September 05, 2004

GUSTAVUS - It's not unusual for Bear Track Inn owner Mike Olney to get a $3,500 monthly power bill in the mail.

Or lose thousands of dollars worth of equipment in his 14-room lodge because of a brownout.

The city of Gustavus has the highest electricity rates in Southeast Alaska and, like many other remote communities, it is chafing from its reliance on expensive diesel fuel to power its homes, shops and inns.

"A lot of people here are not happy with the rates we pay," Olney said.

The question for him and others in the Glacier Bay area is whether to carve off a chunk of the national park that drives their tourism economy to build a hydroelectric plant, as federal authorities are considering.

There are reasons why Gustavus' 450 residents pay 51 cents per kilowatt hour. Their utility is privately financed, with no grants, public funding or low-interest loans. Their power-distribution system is underground. Homes are built far apart, meaning that some lines run a quarter-mile to serve just one customer.

When Dick Levitt created the Gustavus Electric Co. in 1983, he picked up an idea that others had abandoned - building a hydropower project on Falls Creek, in a designated wilderness of Glacier Bay National Park and Preserve. He's pitching the project as a way to stabilize the city's rates.

Falls Creek, also known as the Kahtaheena River, is a whitewater stream that sustains salmon and Dolly Varden and is heavily used by black bears and moose.

Levitt says it's the only spot in the Icy Strait region where he can operate a hydroelectric plant. It would be a "run-of-river" project, meaning a dam would not be necessary, and construction would allow for fish passage.

Levitt initiated at least six community meetings and three referendums and consulted with regional environmental groups and public officials before he went to Washington to lobby senior Alaska politicians, he said. Most, if not all, favored the project, he said.

National environmental groups, regulators and residents in Gustavus and nearby Hoonah still have concerns about the project. Critics have complained to the federal Energy Regulatory Commission, which has authority to approve or reject the plant and is expected to vote within months. The National Park Service and the state would have to agree to a swap in which the state gained the hydropower site and gave land to Wrangell-St. Elias National Park.

Others have written letters asking FERC to promptly approve the project, or approve it with additional protections for the land.

The Falls Creek area has been used by the Huna Tlingit people for at least 500 years, and several Hoonah families have land in the area. Glacier Bay is the ancestral homeland of the federally recognized Hoonah Indian Association.

The Hoonah Indian Association has joined environmentalist groups and some individual residents in an effort to block the project.

Some Gustavus residents have expressed frustration that the project is taking so long.

"They have to feel like there's something to get behind," said Gustavus Mayor Sandi Marchbanks.

She has little patience with the environmentalists who are concerned.

"I'm not against the Sierra Club ... but they need to walk in the shoes of the community. They need to see all the black smoke that's belching out of the (diesel) generator building," she said.

One thing is likely: The Falls Creek project, proposed for completion in 2016, would not ease the high electricity rates for the 450 permanent residents of Gustavus unless the community grows.

"Building any hydroelectric project is a heck of a risk," said David Carlson, electric intertie coordinator for the Southeast Conference, a regional economic development group.

Carlson, of Petersburg, still favors hydroelectric projects for Southeast communities because escalating utility rates can cripple an economy.

"I doubt the seafood processors would be here in Petersburg if they didn't have good electric rates," he said.

But some residents and landowners remain worried about negative impacts on tourism and culturally important Native allotments next to the project.

"I don't think our electric costs will go down at all," said Olney, owner of the Bear Track Inn, where future tourists would see an access road to the project. "It's kind of senseless. ... It's weird to me that all the economic gain is going to the people who own the power company."

Dianne McKinley's great-great-grandfather applied for a Native allotment near Falls Creek in 1909 and willed it to his grandson, Dianne's father, Levi, who was raised to live off the land and water along Icy Strait. Levi felt strongly about the Gustavus land and wanted it to remain in his family, she said.

McKinley and her family oppose the Falls Creek project. They fear their land would lose value if Falls Creek loses its wilderness status.

"Another concern is that we do not want any cultural and traditional resources impact or access to the allotment," McKinley said.

Some Gustavus residents are worried about the possible opening of Falls Creek to activities like hunting and logging. They have asked FERC to restrict activities at Falls Creek to hydroelectric operations.

The U.S. Environmental Protection Agency, the Alaska Department of Fish and Game and the National Park Service also have raised an array of issues.

Fish and Game officials said FERC may have underestimated the number of fish that would travel through a bypassed reach of Falls Creek. The EPA has rated the proposal "insufficient" for a lack of data.

The National Park Service worries that FERC's and the electric company's economic feasibility analysis has left out potentially millions of dollars that would be needed to build a nine-mile connection between the park and company's distribution source.

• Elizabeth Bluemink can be reached at

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