State energy board clears talks on up to $150 million federal award for Beluga-Healy line

The Alaska Energy Authority board on Nov. 5 authorized Executive Director Curtis Thayer to negotiate and accept a Defense Production Act award of up to $150 million from the U.S. Department of Energy for a transmission line between Beluga and Healy. The line would give the Railbelt a second path between Southcentral and Interior Alaska.

The board also backed a $142.3 million state request for the Cook Inlet PowerLink subsea cable, approved the nearly $5 million Red Dog Mine solar loan it took up Thursday and accepted $32.8 million in federal grid resilience money, the program's third and final formula allocation to Alaska.

The authority projects the 223-mile, 230-kilovolt line will cost about $418 million. DOE says it would serve about 75% of Alaska's population. Scope, budget, cost share and schedule remain open to negotiation.

The selection is not yet money. An Oct. 6 letter from DOE says it does not authorize work or costs, that DOE has no financial obligation until it signs a final award and that DOE may rescind the selection if the authority does not keep pace. The letter sets the proposed non-federal share at $268 million, and where that money would come from has not been settled. The board directed Thayer to develop a funding and financing strategy for the rest and report back.

The 38-mile high-voltage direct-current cable under Cook Inlet would link the southern and central Railbelt, starting at 100 megawatts in either direction. The $413 million project has a $206.5 million federal grant and $64.2 million in matching money committed. The board called finishing the cable its top legislative request.

The Power Project Fund loan to Tugliq Red Dog1 LLC is $4,955,444 over 19 years at 5.57% interest, reduced from a $4,999,999 request to stay under the $5 million threshold that requires legislative approval. It would help pay for an 8.8-megawatt solar array and 15-megawatt-hour battery, a project of about $35 million due in October 2028, with all power sold to mine operator Teck Alaska. It cannot close until Tugliq's parent company signs a guarantee and Tugliq confirms its remaining financing and a signed power purchase agreement.