Anchorage Assembly considers $1.75M federal grant to replace port's 1960s electrical system

Federal money will cover only $1.75 million of a $35 million electrical overhaul at the Port of Alaska, leaving the port to find the remaining $33.25 million for a project that underpins cargo service to more than 100 Alaska communities.

The Anchorage Assembly considered Tuesday whether to accept the U.S. Department of Transportation Maritime Administration grant, which is designated for design and construction of electric infrastructure and emergency electricity generation equipment for port cargo terminals. The required non-federal match of $437,500 draws from a 2023 state legislative grant and revenue bond sales the Assembly approved in April 2025. The bulk of the project cost has no identified funding source in the memorandum.

The grant is reimbursable, meaning the port spends first and seeks federal repayment upon submitting required documentation. Port tariffs and lease agreements are the primary mechanism by which the port funds its operations and capital projects, meaning port users bear the cost of infrastructure investments not covered by outside sources.

The Port of Alaska Modernization Program carries an estimated total cost approaching $1.9 billion to replace most existing port infrastructure. The electric substation project is one piece of that larger effort.

Cheryl Beckham, port deputy director, wrote that "the POA's current dock power facilities date back to the 1960s and are located within active cargo transit yards subject to seismic and tsunami hazards."

Some electrical equipment sits on dock structures that must be demolished to make way for new Terminal 1 construction. The existing system also lacks the capacity to power three new ship-to-shore cranes planned for the modernized terminal.

The project would relocate critical electrical infrastructure to a seismically hardened, tsunami-protected site away from dock and transit yard operations, according to the memorandum, which was approved by Terry Umatum, port director.

The stakes extend well beyond Anchorage. The port handles cargo for roughly 90 percent of Alaska's population, and about half of all inbound freight to the state crosses its docks. If the port stopped operating, residents in more than 100 communities could feel the impact within days.

Mayor Suzanne LaFrance, in submitting the resolution, noted that "unlike many areas of the contiguous United States, Alaska lacks redundant transportation systems capable of replacing the Port's statewide cargo function during a disruption."

Some Alaska residents and port users have questioned the overall scale and cost of the modernization program, arguing that billions in spending and related port tariffs place an undue burden on consumers and businesses. Because port tariffs help repay revenue bonds for modernization, the cost of food, fuel, and other goods in Anchorage and statewide can rise alongside infrastructure investment.