Railbelt utilities to repay $100 million for Bradley Lake; comments close Aug. 28

Railbelt electric customers will ultimately repay up to $100 million in short-term debt under a financing plan the Bradley Lake Project Management Committee approved on July 24 in Anchorage. The measure authorizes the Alaska Energy Authority to open a commercial paper program, drawn as money is needed, to carry the Bradley Lake Expansion Project through the state fiscal year ending June 30, 2028. The authority expects the project to raise the hydroelectric plant's average annual generation by about 38 percent, from roughly 436,000 to 601,000 megawatt-hours, with first water targeted for 2031.

Committee materials put the total budget at about $435.9 million. The authority has secured about $32.7 million, including $12 million in interest earnings from its Series 11 bonds, leaving roughly $403.2 million still to be financed. The expansion would raise Bradley Lake's normal maximum pool by 16 feet, adding 62,000 acre-feet of storage by diverting meltwater from the Dixon Glacier.

Repayment falls on the five purchasers of Bradley Lake power: Chugach Electric Association, Golden Valley Electric Association, Matanuska Electric Association, Homer Electric Association through Alaska Electric and Energy Cooperative, and the City of Seward. The debt is secured under the authority's 1989 bond resolution by a pledge of Bradley Lake revenues.

Alaska Energy Authority Executive Director Curtis Thayer told the committee at its June 26 meeting that the 16-foot dam raise was sized to qualify for federal tax credits worth up to $200 million. Eligibility remains unsettled, and the committee cites that uncertainty, along with unfinished cost estimates and current interest rates, as reasons for borrowing short rather than issuing long-term bonds now.

The committee kept several exits. Financing must close no later than November 30, 2026, and the resolution preserves the committee's right to withdraw approval before closing. The authority must also bring back a 60 percent design and cost estimate in November, a 95 percent design in March 2027, and results of its federal license amendment in summer 2027.

The original Bradley Lake bonds were paid off in 2021. The existing 119.7-megawatt plant, on the Bradley River in the Kenai Peninsula Borough, supplies about 10 percent of Railbelt energy and averaged about 4 cents per kilowatt-hour from 1995 through 2020, according to the authority.

The Federal Energy Regulatory Commission is taking comments, protests and motions to intervene on the license amendment, docket P-8221-124, until 5 p.m. Eastern on August 28. Brief comments can be filed through the commission's eComment system without registering. Thayer asked utilities to raise questions with the authority before writing to FERC.