Chugach files for four hydro sites, eyes 2033 construction start

Southcentral Alaska's electric rates and heating costs are tied to Cook Inlet natural gas, a supply that has been in long-term decline for decades. Chugach Electric Association, Alaska's largest electric utility and a member-owned cooperative headquartered in Anchorage, is now pursuing hydroelectric power as one hedge against that risk.

CEO Arthur Miller told members at the utility's annual meeting Thursday in Anchorage that Chugach has filed preliminary permit applications with the Federal Energy Regulatory Commission and water right applications with the Alaska Department of Natural Resources for four hydroelectric projects totaling about 52 megawatts. The four sites are Boulder Creek, Caribou Creek, Canyon Creek, and Godwin Creek.

Cook Inlet gas fields have supplied Southcentral Alaska for more than 60 years, but production has declined sharply. About 40% of Chugach's natural gas requirements are met through a contract with Hilcorp Alaska that expires at the end of the first quarter of 2028. Chugach owns a two-thirds working interest in the Beluga River Unit gas field, which covers roughly 60% of its gas needs and has been the top-producing field in Cook Inlet Basin for 2024 and 2025.

Miller said strong performance at that field has allowed Chugach to extend the timeline for securing additional gas supplies from the first quarter of 2028 to the first quarter of 2029, aided by banking arrangements with Marathon Petroleum Company and Hilcorp. The supply gap has been debated in the Alaska State Legislature for months, with utilities, producers, and policymakers weighing Cook Inlet investment, LNG imports, and new generation resources as contracts begin expiring.

The permits authorize feasibility work only. No decision has been made whether to proceed with any of the projects.