Legislature(2019 - 2020)GRUENBERG 120

04/02/2019 10:00 AM FISHERIES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
-- Testimony <Invited/Public> --
         HB 99-NUYAKUK RIVER FALLS: HYDROELECTRIC SITE                                                                      
10:03:04 AM                                                                                                                   
CHAIR STUTES announced that the  first order of business would be                                                               
HOUSE  BILL NO.  99,  "An  Act relating  to  the development  and                                                               
operation of  a hydroelectric  site at  the Nuyakuk  River Falls;                                                               
providing for the amendment of  the management plan for the Wood-                                                               
Tikchik State Park; and providing for an effective date."                                                                       
10:03:47 AM                                                                                                                   
REPRESENTATIVE   BRYCE   EDGMON,    Alaska   State   Legislature,                                                               
introduced HB 99  as prime sponsor.  He explained  the bill would                                                               
provide  a   member-owned  local   power  cooperative   from  the                                                               
Dillingham area the ability to  do feasibility and impact studies                                                               
on a  hydroelectric project in  the Wood-Tikchik State Park.   He                                                               
indicated  this  was just  the  beginning  phase  of a  long  and                                                               
involved process  for a  project that is  estimated to  cost well                                                               
over $100 million.  He said  HB 99 would give the cooperative, in                                                               
statute,  permission  to  do the  necessary  studies,  by  making                                                               
required changes to Alaska Statute Title 41.                                                                                    
10:06:20 AM                                                                                                                   
REPRESENTATIVE KREISS-TOMKINS  asked for a primer  history on how                                                               
Elva Lake and Grant Lake ended  up in Alaska Statute Title 41 and                                                               
what the hydroelectric potential is at each of those sites.                                                                     
CHAIR  STUTES surmised  that the  requested information  would be                                                               
included in the upcoming presentation.                                                                                          
10:08:04 AM                                                                                                                   
ROBERT  HIMSCHOOT,  CEO/General  Manager, Nushagak  Electric  and                                                               
Telephone Cooperative (NETC), directed attention  to slide 1 of a                                                               
PowerPoint  presentation,  entitled "Logical  Natural  Location."                                                               
He  explained that  Nuyakuk River  flows over  a natural  glacial                                                               
moraine which  creates Nuyakuk Falls.   The project  would divert                                                               
some  of  the  river  water  around   the  falls  for  use  in  a                                                               
hydroelectric  plant.   Mr. Himschoot  moved to  slide 2,  "Power                                                               
Production  Location  and  Potential."   He  explained  that  the                                                               
United Stated Geological Survey (USGS)  has had a flow monitoring                                                               
program at  the Nuyakuk Falls  since 1953, which  is advantageous                                                               
because  that is  over 60  years of  data available  for modeling                                                               
what the  possible hydroelectric power production  from the falls                                                               
might be.   He  said if  they used  25 percent  of the  flow, the                                                               
minimum  power  over  the  three   lowest  months  would  be  4.5                                                               
megawatts.  The  modeling showed that there  is considerably more                                                               
potential at high flow times.   Modeling projections were stopped                                                               
at 10  megawatts, but  during high flow  time there  is potential                                                               
for power  up to 30  megawatts.  He  stated that 10  megawatts of                                                               
power were  enough power not  only for Dillingham  and Aleknagik,                                                               
but  for  regional  distribution  as  well.    The  natural  flow                                                               
production  potential  matches  the  seasonal  demand,  which  is                                                               
driven  by salmon  processing  in  the summer.    He stated  that                                                               
Dillingham used  approximately two megawatts of  power during the                                                               
winter, which  jumped to  five megawatts during  the summer.   He                                                               
noted that with the addition  of a new Icicle Seafoods processing                                                               
facility, Dillingham  would require closer to  eight megawatts of                                                               
power during the processing season.                                                                                             
10:12:06 AM                                                                                                                   
MR.  HIMSCHOOT used  slide 3,  "Power  Plant,  and  slide 4  [not                                                               
titled] to  show the  possible affected area.   He  explained the                                                               
falls  occur  at   a  splendid  location  in  the   river  for  a                                                               
hydroelectric facility.   There is  a natural oxbow in  the river                                                               
above  the  falls which  is  perfect  for  the intake  above  the                                                               
proposed power production  facility.  The intake would  lead to a                                                               
1500-foot power channel which would  flow into the power plant at                                                               
the bottom of  the falls.  The water flow  from the Nuyakuk River                                                               
would be affected for approximately  3000 feet, the distance from                                                               
the top  to the bottom of  the falls.   At the base of  the falls                                                               
the  water used  for power  production would  be introduced  back                                                               
into the river,  returning the river to its full  flow rate.  Mr.                                                               
Himschoot said  salmon traversing  the falls  would use  the same                                                               
passage that had always been used.                                                                                              
10:13:29 AM                                                                                                                   
MR. HIMSCHOOT  moved on to  slide 5, "Transmission System."   His                                                               
presentation showed a line drawing  of the potential distribution                                                               
of  hydroelectric  power  if  the  project  is  successful.    He                                                               
explained that  there would be  enough electricity  generated for                                                               
six communities  in the  Dillingham area,  and production  may be                                                               
enough for  three more  communities in  the region.   He  said if                                                               
electrical production was sufficient  for all 9 communities, that                                                               
would greatly  increase the  viability of  the project.   Another                                                               
benefit to  connecting all the  communities would be  the ability                                                               
to  bring  broadband  telecommunications  to all  of  them  while                                                               
building the transmission lines.                                                                                                
10:14:25 AM                                                                                                                   
MR. HIMSCHOOT  moved on  to slide 6,  "Considerations."   He said                                                               
the project would displace 1.5  million gallons of fuel annually.                                                               
The estimated cost  for the project and construction  was $120 to                                                               
$150  million.   Mr.  Himschoot explained  the financial  savings                                                               
over a  40-year licensing period  to the Nushagak  Electrical and                                                               
Telephone  Cooperative would  total $171  million.   He told  the                                                               
committee  that  the  slide  show  he'd  just  presented  was  an                                                               
abbreviated version  of the presentation shared  to the community                                                               
for outreach.   He said, "We've  tried to include as  many people                                                               
as possible  to see  if there  would be anyone  who would  not be                                                               
supportive  of us  moving forward."   He  answered Representative                                                               
Kreiss-Tomkins' question  by saying  when the  Wood-Tikchik State                                                               
Park was established,  enabling statutes recognized hydroelectric                                                               
as one  of the potential  uses of the  state park and  called out                                                               
two particular  sites that  had been identified  in advance.   He                                                               
said  those  were  Grant  and   Elva  Lake.    He  continued  his                                                               
explanation by saying the cooperative  was constantly looking for                                                               
a path  off of diesel and  had evaluated both the  Grant and Elva                                                               
Lake sites but  neither one of them turned out  to be financially                                                               
feasible.  Mr.  Himschoot said what the cooperative  is trying to                                                               
do  is  study  the  Nuyakuk  Falls to  see  if  the  location  is                                                               
feasible,   both   environmentally   and   financially,   for   a                                                               
hydroelectrical power facility.                                                                                                 
10:18:36 AM                                                                                                                   
REPRESENTATIVE KREISS-TOMKINS expressed  his understanding of the                                                               
difficulty  in finding  non-diesel  projects, then  asked if  the                                                               
$120  million   to  $150  million  project   price  included  the                                                               
transmission line infrastructure.                                                                                               
MR. HIMSCHOOT answered yes.                                                                                                     
REPRESENTATIVE KREISS-TOMKINS  asked how the  electrical baseload                                                               
would  be  affected if  the  project  was  to include  the  three                                                               
communities  that  Mr.  Himschoot  mentioned  could  possibly  be                                                               
included  in  the project  if  the  studies showed  enough  power                                                               
MR. HIMSCHOOT  answered that the amount  of electricity produced,                                                               
even in the  low times, would be enough for  those communities to                                                               
avoid diesel generation.                                                                                                        
10:20:25 AM                                                                                                                   
REPRESENTATIVE KOPP  said the project had  enormous potential and                                                               
shared  some  information  about other  successful  hydroelectric                                                               
projects with which he was  familiar.  He mentioned the potential                                                               
for a  fish processing plant in  Levelock and how excited  he was                                                               
about  the benefits  from the  hydroelectric  project that  could                                                               
10:22:01 AM                                                                                                                   
CHAIR  STUTES  shared  that Kodiak  was  99.7  percent  renewable                                                               
energy.   She  said the  reasonable  cost of  electricity was  an                                                               
economic driver  for the community,  bringing in  fish processors                                                               
due to the low cost of electricity.                                                                                             
10:23:08 AM                                                                                                                   
REPRESENTATIVE VANCE asked whether  Mr. Himschoot had a breakdown                                                               
of  projected cost  per  home in  the area,  and  whether he  had                                                               
projections for  utility costs per  household if the  project was                                                               
to succeed.                                                                                                                     
MR.  HIMSCHOOT answered  that much  of what  Representative Vance                                                               
asked would be determined through  the studies and design process                                                               
for the  project.  He said  based on the known  current costs and                                                               
projected estimated  costs, the household energy  costs would not                                                               
increase.   He  expected  to be  able to  find  grants and  other                                                               
funding that  would drive  the project cost  down.   He explained                                                               
that all  the modeling  for the  project was  based on  a 40-year                                                               
license  from the  Federal Energy  Regulatory Commission  [FERC].                                                               
He   added   that  40   years   is   a   very  short   term   for                                                               
hydroelectricity, but  in the long  term the region  will benefit                                                               
from a mature hydroelectrical facility with lower rates.                                                                        
REPRESENTATIVE VANCE acknowledged that  choosing Bradley Lake was                                                               
one of the  wiser decisions made by  the state.  She  said it was                                                               
impressive  that this  project did  not need  a dam  and that  it                                                               
maintained 75 percent of the  natural water flow for fish habitat                                                               
and  passage.   She expressed  her hope  that this  project would                                                               
move forward.                                                                                                                   
10:27:17 AM                                                                                                                   
CORY  WARNOCK,   Senior  Licensing  and   Regulatory  Consultant,                                                               
McMillen Jacobs  Associates, shared his background  and explained                                                               
he had  been working with NETC  for the past year,  exploring the                                                               
initial feasibility  of the Nuyakuk Falls  hydroelectric project.                                                               
He  said he'd  been  hearing some  concerns in  regard  to HB  99                                                               
potentially  allowing  for  the   expedited  development  of  the                                                               
project prior to fully exploring  the feasibility of the project.                                                               
He said he  was available to answer procedural  questions and add                                                               
clarity  with  respect to  the  intent  of  the bill  versus  the                                                               
onerous and requisite  FERC licensing process that  would need to                                                               
take  place.   He  explained  one  phase  of the  FERC  licensing                                                               
process is  to collect existing  baseline natural  resource data,                                                               
then to go  through a process with state and  federal agencies to                                                               
determine additional study needs.                                                                                               
CHAIR  STUTES asked  for clarification  about  the FERC  process.                                                               
She  explained that  she  wanted to  make sure  HB  99 would  not                                                               
circumvent any of the steps required by anyone in the process.                                                                  
MR.  WARNOCK replied  the  bill would  allow  the cooperative  to                                                               
begin   the  study   development  and   implementation  processes                                                               
necessary  to  inform  the  FERC  process; it  would  in  no  way                                                               
circumvent or avoid it.                                                                                                         
CHAIR STUTES asked  for an estimate of the  timeframe involved in                                                               
getting a FERC permit.                                                                                                          
MR. WARNOCK answered five to  seven years based on no significant                                                               
issues associated with legislation or other external influences.                                                                
10:31:03 AM                                                                                                                   
REPRESENTATIVE  KREISS-TOMKINS  commented  he'd heard  the  words                                                               
"onerous," "burdensome," and  "time-consuming" in the description                                                               
of the  FERC process, and  he asked  Mr. Warnock to  elaborate on                                                               
what is entailed in the FERC permitting process.                                                                                
MR.  WARNOCK answered  there are  a series  of phases;  the first                                                               
phase is what  the cooperative is in now.   He told the committee                                                               
that the cooperative  had applied for and  received a preliminary                                                               
permit from the  FERC, which would grant them access  to the site                                                               
for  a feasibility  study.   He went  on to  explain the  initial                                                               
permit  granted  the  cooperative  three  years  to  perform  the                                                               
feasibility and  exploration phase  requirement.   At the  end of                                                               
the  three  years  the  cooperative would  have  to  show  enough                                                               
progress  to   be  granted  an  additional   two-year  extension.                                                               
Following  the baseline  data acquisition,  there is  a five-year                                                               
window  for  all  the  stakeholders  to  determine  and  complete                                                               
studies that govern  whether the completion of  the project would                                                               
be more beneficial  than detrimental overall.   He explained that                                                               
once  the  studies  are completed,  all  the  stakeholders  would                                                               
reconvene and determine whether  the project should move forward.                                                               
The  stakeholders then  would develop  terms and  conditions that                                                               
they would  like to see in  the FERC license.   Mr. Wardnock said                                                               
that at  this point  the cooperative would  file a  final license                                                               
application   with  FERC,   those  terms   and  conditions   from                                                               
stakeholders  would  be  applied,  then  FERC  would  do  a  full                                                               
comprehensive review to determine if  the project was viable.  If                                                               
FERC determined it was viable, then a license would be issued.                                                                  
10:34:29 AM                                                                                                                   
REPRESENTATIVE  TARR asked  if  there were  any  sites closer  to                                                               
Dillingham that could work better for a hydroelectric facility.                                                                 
MR.  HIMSCHOOT said  the search  that  led to  the Nuyakuk  River                                                               
Falls site was from a comprehensive search of the area.                                                                         
10:36:15 AM                                                                                                                   
MR.  WARNOCK added  to Mr.  Himschoots  comments  by saying  that                                                               
from  a  biological  perspective,  the proposed  site  is  fairly                                                               
unique  because   of  the  small  footprint   the  project  would                                                               
encompass.  The amount of area  for viable rearing or spawning of                                                               
the resident  and anadromous salmonids  that exist in  the system                                                               
would not be impacted.   From an engineering and natural resource                                                               
perspective, the falls site is appealing.                                                                                       
CHAIR STUTES  asked for a ballpark  idea for cost of  the project                                                               
through the FERC permit being issued.                                                                                           
MR. WARNOCK answered  that there are a lot of  variables, but the                                                               
project estimates  are $6 million for  natural resources studies;                                                               
regulatory services  for engineering feasibility would  be in the                                                               
range of  $10 million to  $20 million.   He recognized  the range                                                               
was broad but  said it would be refined, and  he, hoped minimized                                                               
as they learned more.                                                                                                           
10:39:06 AM                                                                                                                   
REPRESENTATIVE  KREISS-TOMKINS  asked  a two-part  question,  the                                                               
first part being  what the anticipated impact  on anadromous fish                                                               
was; then what sort of summer  and winter studies would be needed                                                               
to get through the FERC process.                                                                                                
MR. WARNOCK said he could  definitely address the studies part of                                                               
the  question.   As an  example of  site-specific needs,  he said                                                               
there would  be geotechnical work done  in the first year  of the                                                               
study  program.   That would  include analysis  of the  substrate                                                               
being used  for development of  the project to determine  what it                                                               
can withstand in  terms of the force of the  river and the amount                                                               
of infrastructure that  would be added.  From  a natural resource                                                               
perspective,  he  said one  of  the  first and  highest  priority                                                               
studies  would be  the Nuyakuk  Falls.   Overall,  he said  there                                                               
would  be   minimal  impact  to   habitat;  however,   the  falls                                                               
themselves would  be an area called  a "bypass reach" or  area of                                                               
the river  where water  would be moved  around to  develop power.                                                               
He stated, "We  would be looking at the flow  through those falls                                                               
to  ensure  that safe,  effective,  and  timely passage  of  both                                                               
upstream migrating adults and  downstream migrating juveniles was                                                               
maintained  throughout the  entire  year."   Mr. Warnock  related                                                               
another unique  feature of  the project is  that these  falls, at                                                               
certain times  of year that  coincide with upstream  migration of                                                               
certain anadromous  species, create  a velocity barrier  that can                                                               
prohibit  upstream migration.   He  said removing  some of  those                                                               
(indisc.)  flows over  the falls  at  certain times  of the  year                                                               
would  provide "more  safe, timely,  and  effective passage  than                                                               
natural conditions currently allow."                                                                                            
MR.  WARNOCK said  those are  the primary,  upfront studies,  but                                                               
because  there is  not  a lot  of existing  data  for the  remote                                                               
location,  there would  also be  a period  of studies  that would                                                               
"more globally  and comprehensively investigate the  project area                                                               
for  species  presence" and  composition,  and  to determine  the                                                               
water quality.   He said, "All of that would  ... coalesce into a                                                               
model  or a  series of  models  during the  data analysis  phase,                                                               
which  again would  be cross-referenced  with  project design  to                                                               
determine how  natural conditions would  be, if at  all, impacted                                                               
by project operations."                                                                                                         
10:43:49 AM                                                                                                                   
REPRESENTATIVE  KOPP   asked  whether   the  project   was  owned                                                               
cooperatively  with  any other  companies,  because  he had  seen                                                               
Naknek Electric was  also pursuing a FERC permit for  the same or                                                               
similar project.                                                                                                                
MR.   HIMSCHOOT   replied   that   he  believed   there   was   a                                                               
misunderstanding, then  explained the Naknek  Electric resolution                                                               
was  in  support  of  the Nushagak  Cooperative's  efforts.    He                                                               
explained that the project would  certainly need to be a regional                                                               
project, but it was too early  in the planning stages to know how                                                               
the cooperation  between the regional electrical  companies might                                                               
REPRESENTATIVE  KOPP  explained  that  he had  just  misread  the                                                               
10:46:12 AM                                                                                                                   
REPRESENTATIVE KREISS-TOMKINS  asked for  an explanation  to make                                                               
sure he understood what velocity barrier meant.                                                                                 
MR. WARNOCK  said he used the  term velocity barrier to  define a                                                               
natural condition where water flow  coming over a barrier such as                                                               
a  waterfall impeded  the upstream  movement of  adult anadromous                                                               
10:48:12 AM                                                                                                                   
REPRESENTATIVE EDGMON  commented that  this project had  a myriad                                                               
of steps and  stages and was comparative, on a  smaller scale, to                                                               
the gas  line project in  the complexity of the  overall process.                                                               
He then  asked Mr. Himschoot  if at  any time in  the exploratory                                                               
phase  the  cooperative  would  be  compelled  to  recognize  the                                                               
project wasn't feasible, and if so, what would happen.                                                                          
MR. HIMSCHOOT answered  that Mr. Warnock had  given a description                                                               
of the process.   He said some of the  more critical studies were                                                               
going  to  be  done  early in  the  process,  specifically  those                                                               
studies  that had  a  "go/no  go" bearing  on  the  project.   He                                                               
continued by  explaining that if  any of those studies  came back                                                               
indicating the  project was not  feasible, the  cooperative would                                                               
evaluate the decision to move forward or not.                                                                                   
REPRESENTATIVE  EDGMON  commented  that this  was  a  speculative                                                               
project  for  a  small  cooperative  and  would  be  a  long-term                                                               
process.   He  added  that given  those  factors the  cooperative                                                               
would have to err on the side of caution.                                                                                       
10:51:33 AM                                                                                                                   
CHAIR STUTES announced that HB 99 was held over.                                                                                

Document Name Date/Time Subjects
HB099 Supporting Document - Naknek Electric resolution.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 5/7/2019 10:00:00 AM
HB 99
HB099 Supporting Document - NETC Fish First Resolution.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 5/7/2019 10:00:00 AM
HB 99
HB099 Supporting Document - Nuyakuk Hydroelectric_2019update.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 5/7/2019 10:00:00 AM
HB 99
HB099 ver A 3.28.19.PDF HFSH 4/2/2019 10:00:00 AM
HFSH 5/7/2019 10:00:00 AM
HB 99
HB099 Supporting Document - Nuyakuk Studies Description and Estimate.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 5/7/2019 10:00:00 AM
HB 99
HB105 Fiscal Note DLWD 03.29.19.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 4/4/2019 10:00:00 AM
HB 105
HB105 Sponsor Statement 03.29.2019.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 4/4/2019 10:00:00 AM
HB 105
HB105 Support Document - PSVOA 03.26.2019.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 4/4/2019 10:00:00 AM
HB 105
HB105 Support Document - SEAFA 03.26.2019.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 4/4/2019 10:00:00 AM
HB 105
HB105 Support Document - SEAS 03.26.2019.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 4/4/2019 10:00:00 AM
HB 105
HB105 Support Document - UFA 03.26.2019.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 4/4/2019 10:00:00 AM
HB 105
HB105 ver A 03.26.2019.PDF HFSH 4/2/2019 10:00:00 AM
HFSH 4/4/2019 10:00:00 AM
HB 105
HB099 Fiscal Note DNR 03.29.19.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 5/7/2019 10:00:00 AM
HB 99
HB099 Sectional Analysis ver A 3.28.19.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 5/7/2019 10:00:00 AM
HB 99
HB099 Sponsor Statement 3.28.19.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 5/7/2019 10:00:00 AM
HB 99
HB099 Supporting Document - Aleknagik Resolution.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 5/7/2019 10:00:00 AM
HB 99
HB099 Supporting Document - BBNA resolution.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 5/7/2019 10:00:00 AM
HB 99
HB099 Supporting Document - Curyung Tribal Council resolution.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 5/7/2019 10:00:00 AM
HB 99
HB099 Supporting Document - Dillingham City Council resolution.pdf HFSH 4/2/2019 10:00:00 AM
HB 99
HB099 Supporting Document - Hydro presentation_testimony.pdf HFSH 4/2/2019 10:00:00 AM
HFSH 5/7/2019 10:00:00 AM
HB 99