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Governor Parnell’s Budget Proposal Has Implications for Multiple Energy Projects, Not Just Susitna

by Phillip Manning ~ December 16th, 2013

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Governor Sean Parnell’s budget proposal for Fiscal Year 2015 includes many cuts to capital projects.  KTNA has covered the Governor’s decision to cut funding to the Susitna-Watana Hydroelectric Project, citing land access issues, but it was far from the only energy project to take a financial hit.  There are a number of energy projects on the table, and with less funding, the state may have to pick and choose where it goes.

Chris Rose, Executive Director of the Renewable Energy Alaska Project, or REAP, says that the implications of decreased revenue are fairly simple.

“With less money, we’re going to be able to do less.”

Chris Rose says that REAP’s most recent forum on energy in Alaska featured a presentation on where the state is when it comes to big projects.

“Antony Scott, from the Alaska Center for Energy and Power, went through the money that’s already been spent by the State of Alaska on various energy projects–just since 2008–including gas pipelines, the dam, renewable energy fund projects,  energy efficiency, and so on, and came up with a number over $3 billion that’s been spent.  Really, the only projects that have come out of that, so far, have been the projects that have come out of the Renewable Energy Fund and all the home weatherization projects that have been done through the rebate programs that HFC oversees.  The other projects are all still in process.”

With multiple gas, hydroelectric, and other projects still in the initial phases and revenues falling short, Chris Rose said a major takeaway from Antony Scott’s presentation comes down to crunching some numbers.

“I think one of his points was, with decreasing state revenues, we’re going to have to come up with a way to prioritize these projects, and figure out which ones are commercially feasible, and have some criteria that allows us to prioritize.”

Governor Parnell’s budget, while cutting a great deal of project funding, does still lay out some priorities.  In the ten year fiscal plan produced by the Office of Management and Budget, investing in hydropower is specifically listed as one of the administrations strategies for achieving the goal of 50% renewable electricity by 2025.  Last year’s budget saw $380 million dollars go to gas pipeline development and just over $400 million to “other energy” and hydro projects.  This year’s only mention of big energy projects in the Governor’s summary is $10 million to Susitna-Watana.

Governor Parnell has not set a hard spending cap for the legislature, so funding could find its way back to some big energy projects before the budget is finalized.

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