AIDEA board approves up to $10 million stake in Augustine volcano geothermal project

The Alaska Industrial Development and Export Authority's board on Wednesday approved investing up to $10 million in GeoAlaska, a company that wants to turn the heat under Augustine Island, an active volcano in Lower Cook Inlet, into electricity.

AIDEA Executive Director Randy Ruaro wrote to the board the project could meet nearly a third of the power demand on the Railbelt, the grid that runs from Fairbanks to the Kenai Peninsula.

The board's resolution doesn't set a price, how much of the company AIDEA would own or what say it would have. It leaves those terms for Ruaro to negotiate. AIDEA can't commit any money until, among other conditions, it finishes reviewing the company, confirms it has the legal authority to invest and its chief financial officer confirms the agency's finances can handle it.

In January, GeoAlaska said it was seeking $12 million for 20% of the company, valuing it at $60 million, in a slide deck filed with a state House committee. AIDEA's documents don't say how that pitch relates to its investment.

The project's estimated size has more than tripled from an earlier figure. A 2024 paper co-written by GeoAlaska CEO Paul Craig estimated the island could produce about 70 megawatts, and warned the number would change with more data. An update after more survey work raised that to about 204 megawatts. The resolution now uses 224 megawatts, a figure GeoAlaska's slides credit to a 2024 report by the consulting firm JRG Energy that covered about a fifth of the project's land. That report isn't posted, and AIDEA's posted documents include no independent review of the resource.

No record reviewed by Alaska News shows a well has been drilled to confirm what's underground. In September, the U.S. Department of Energy picked an Augustine test well to negotiate funding for, but said that wasn't a commitment and named no amount.

Getting the power to customers would be its own project. GeoAlaska's slides say it would take an undersea cable of 70 to 150 miles, depending on where it comes ashore, plus two transmission projects that haven't been built. No contract to sell the power appears in the record, though GeoAlaska says Homer Electric Association signed a strategic agreement with it in 2022.

Augustine erupts about once every 30 years, according to GeoAlaska's slides, most recently in 2006.

The board discussed GeoAlaska's application, filed in April, behind closed doors in October and took no action then. AIDEA hasn't posted audio of Wednesday's meeting.