Comment closes on state's no-cost sale of 5,805 acres for Bradley Lake hydro

The Alaska Department of Natural Resources closed public comment Tuesday on its proposed no-cost, noncompetitive sale of about 5,805 acres on the east side of Kachemak Bay to the Alaska Energy Authority. The land covers most of what the authority already leases for its Bradley Lake hydro project, plus land needed for the Dixon Diversion, the core of its Bradley Lake Expansion Project.

The parcel, about nine square miles of state land northeast of Homer in the Kenai Peninsula Borough, is smaller than the authority first sought. It applied June 6 for about 8,087 acres, then amended its request Aug. 26 to leave out tidelands, submerged lands, shorelands and two critical habitat areas.

The department's next step is a final decision, which could be issued without further public notice if no significant change is required. Only people who filed timely written comments can appeal it.

Under the preliminary decision, the authority would pay administrative costs such as surveying but not for the land itself. The state would also give up its usual right to take back land no longer used for a public purpose, citing federal license conditions that already require hydro use. The department considered keeping and amending the lease instead. It said the state earns no revenue from the lease while bearing its costs, and that without title the authority would lack financial flexibility. The decision lists reduced state oversight of the project among the transfer's impacts and says those impacts can be minimized or mitigated.

Curtis Thayer, the authority's executive director, told the governor's office in a May 27 email that the transfer "will support our FERC amendment and the financing of the Dixon Diversion."

The Dixon Diversion would send glacier meltwater through a 4.6-mile tunnel into Bradley Lake, raising its water level about 16 feet. The authority says the work would add about 167,000 megawatt-hours a year, a 38 percent increase, enough to power up to 30,000 homes, and offset about 1.5 billion cubic feet of natural gas a year. Its board materials put the total project cost at $435 million. The price has been stated several ways since April, Alaska News reported July 25.

The authority's board, meeting Thursday, has the land transfer on its agenda as part of the director's update on the expansion.