The Alaska Energy Authority may receive nearly 6,000 acres at the Bradley Lake hydroelectric plant under a proposal from the Alaska Department of Natural Resources. The land transfer would support a long-planned expansion of the plant. The public is invited to comment on the conveyance through 5 p.m., Nov. 3. 

AEA owns the Bradley Lake project, but leases the land from DNR. The proposed conveyance would grant AEA ownership of the 5,805 acres underneath the existing project, including the planned expansion. A draft mineral order paired with the conveyance would also close the area to new mining to reduce potential land-use conflicts, DNR Division of Land, Mining and Water Chief of Operations Rachel Longacre said. 

“We’re not disturbing the original footprint of the dam,” said AEA CEO Curtis Thayer. “We’re cleaning up the books, so to speak, on the property, but at the end of the day, the state still owns the project.”

Bradley Lake, located near the head of Kachemak Bay about 27 miles northeast of Homer, is the largest of seven hydroelectric facilities in Alaska. With a capacity of up to 120 megawatts, it serves more than 70% of the state’s population and produces 10% of the total annual power used by Railbelt utilities. Homer Electric Association draws 12% of the output, or 14 megawatts, from Bradley Lake to generate electricity. 

The expansion project, also called the Dixon Diversion, would increase power production by about 40%. 

“If you can get 40% more out of Bradley, which is about five more percent of power, it displaces 1.5 billion cubic feet of natural gas (and) the utilities can use hydro as opposed to burning natural gas,” Thayer said. 

AEA plans to divert water from the Dixon Glacier watershed to Bradley Lake through a 4.6-mile long underground tunnel and raise the existing 125-foot-high dam wall by 16 feet to accommodate the additional water.

The Dixon Diversion is touted as the largest hydropower development on the Kenai Peninsula since Bradley Lake came online in 1991. AEA’s project application says the additional hydroelectric energy will reduce stress on the natural gas transmission network during the cold months and allow more gas for home heating.

In comments filed in March, however, the Kachemak Bay Watershed Council raises concerns and calls for data collection about the impacts of climate change on the project and on aquatic species in the associated waterways.

“As a result of the operation of the Bradley Lake Hydro Project since 2018, there have been no less than nine occasions during critical salmon spawning periods in which both the Bradley River and Battle Creek have fallen below the required minimum stream flows,” KBWC wrote.

The Homer Independent Press reached out to KBWC for additional comments, but did not receive a response before press time. 

Thayer said the conveyance will help as AEA looks at federal financing options to expand Bradley Lake’s capacity. Construction is estimated to cost $400 million. 

“In one of the loan programs that we’re looking at with the Department of Energy, we (need to) have 20% equity of the property against what we’re borrowing,” he said. “It’s still going to be a state-owned asset … just now we have the land and the facilities on it. (That) possibly lowers our interest rate for borrowing.”

Federal funding would be backed by a power sales agreement, in which utilities would pay a portion of the project cost based on the percentage of power they draw from Bradley Lake. Because HEA draws 12% of the plant’s output, it would pay 12% of the expenses.

“That’s the same agreement we’ve had for a long time,” Thayer said. “Right now, Bradley is 4.5 cents per kilowatt. When we do the diversion, we anticipate that number to go to roughly 5.5 cents…. When the financing is over in 30 years, it goes back to being four-cent power.” 

Concurrent with the Bradley Lake expansion, AEA also plans to upgrade the transmission line between Anchorage and Homer to operate at 120 megawatts more efficiently. The existing transmission lines operate at 75 megawatts, Thayer said. 

“We hope to have Bradley done by 2030, and the transmission upgrades done about the same time,” he said. 

Longacre said once the public comment period closes, the department will review all input and issue a Final Finding and Decision. If approved, the conveyance and mineral order would undergo a standard 20-day appeal period before the decision becomes final. There is no set timeline between the comment period’s end and DNR issuing its final decision. 

AEA will host a virtual “industry day” on Oct. 21 about the expansion project’s scope and site logistics. To receive the meeting link, RSVP to Ryan McLaughlin, Bradley Lake Chief Dam Safety Engineer, at rtmclaughlin@akenergyauthority.org.