Can the state afford to pay for the estimated $5.66 billion cost of Susitna-Watana Hydro?

AEA does not expect the State of Alaska to directly pay the estimated $5.66 billion needed to build the project. Instead, AEA expects the project will be publically financed using a combination of bonds, loans, state investments, and other financing solutions. Repayment of project debt and return on the State’s investment will come from the sale of electricity, primarily to Railbelt utilities.

Alaskans may be familiar with the AEA-owned Bradley Lake Hydroelectric Project, just east of Homer.  In the successful financing model, Bradley Lake project construction was funded by a combination of bonds and state investment through appropriations.  Railbelt utilities purchase the power generated by the project through a Power Sales Agreement. Under that Agreement, the Railbelt utilities continue to make payments after bonds are paid off, effectively providing a return on the State’s investment in the project.

Posted in: Susitna-Watana Hydro Basics