Over 20 Alaska villages on tap for $125M in federal funds for solar and hydroelectric projects

Solar and hydroelectric projects in villages across rural Alaska are on deck to receive up to $125 million in funding from the giant 2021 federal infrastructure law.

The projects, including new solar arrays for several villages, will reduce the use of costly diesel fuel that’s used to make electricity at village power plants across the state, the Biden administration said Tuesday. If they’re funded and built, the projects will also create jobs and income for tribes that sell the power.

One of the projects could receive up to $26 million to deploy solar power arrays and battery storage banks in eight Interior Alaska villages, according to the U.S. Energy Department.

The Tanana Chiefs Conference, a tribal consortium representing 39 villages, applied for the funding. Villages that will benefit include Nulato, Huslia and Holy Cross.

The selection is a “huge deal” for the region, said Edward Dellamary, rural energy manager for the Tanana Chiefs Conference.

It can offset the region’s diesel consumption by up to 40% and provide a business model that other villages can follow, he said. The plan calls for a tribal ownership of the projects, with profits from the sale of power to the local utility reinvested back into the village, the agency said.

“This will assist communities that have some of the highest energy costs not just in Alaska, but in the whole country,” Dellamary said in a phone interview.

About 1,000 residents in the eight villages will directly benefit, he said.

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The Energy Department said that the Alaska projects are among 17 projects across the U.S. that have been selected for award negotiations of up to $366 million. The negotiations are a step toward final funding.

Dellamary said Tuesday that he had met earlier in the day with Energy Secretary Jennifer Granholm at the agency’s Tribal Clean Energy Summit in Temecula, California. The meeting was part of the negotiation process, he said.

U.S. Sen. Lisa Murkowski said in a statement that the funding from the agency will benefit Alaska more than any other state. It’s part of the Energy Improvement in Rural or Remote Areas program.

“One of my priorities when crafting the bipartisan infrastructure law was cleaner and more affordable energy for Alaska,” Murkowski said. “I see the opportunities we have to utilize more of our local resources, the hardships that high energy costs cause across our state, and pushed this innovative program as a way to tackle both.”

“This major investment — a result of our work in the Infrastructure, Investment and Jobs Act — will fund hydroelectric facilities, battery storage, transmission lines, and other energy infrastructure” in several Alaska villages, U.S. Sen. Dan Sullivan said in the statement.

The Energy Department said the funding for other projects in Alaska includes:

• Up to $55 million to create 10 solar and battery storage projects in villages across the Northwest Arctic Borough in the state’s northwestern region. The villages will be able to sell the power to the local utility, bringing in close to $1 million in annual revenue. The project will also distribute heat pumps that help reduce heating costs. Overall, the villages will save about $2 million in electric and heating costs.

• Up to $27 million for the Thayer Creek Hydroelectric Project in the village of Angoon, in Southeast Alaska. The 850-kilowatt, run-of-river project could meet three times the community’s electricity needs, providing additional power for heating and fish processing. Kootznoowoo Inc., the Alaska Native corporation for the village of about 350, applied for the funding.

• Up to $7.3 million to replace a leaking wooden dam in Chignik with a new facility that diverts a portion of a river to to product energy, called a “run-of-river” facility. It could fully replace diesel consumption in the village of about 100, and provide extra power for heating and local economic activities like fish processing. The Lake and Peninsula Borough applied for the funding.

• Up to $10 million to Old Harbor, a village of about 200 on Kodiak Island, for a run-of-river hydropower facility that could offset diesel use by 95% and operate year-round. The Alutiiq Tribe of Old Harbor applied for the grant.

President Joe Biden signed the $1.2 trillion infrastructure bill into law in 2021. The statement from Alaska’s senators said more than $7 billion from the law has been announced for Alaska, with over 1,600 projects identified for funding. Both lawmakers voted for the act and helped craft it, along with the late U.S. Rep. Don Young.