The U.S. Department of Agriculture's Rural Energy for America Program has awarded a $500,000 grant to Upper Tanana Energy LLC for construction of the 1.5-MW Yerrick Creek hydropower project.
Located near in eastern Alaska, the small run-of-river plant is expected to replace 375,000 gallons of diesel fuel per year while providing about 40% of the power needed in Tok, Tetlin, Dot Lake and Tanacross.
The project will be build on lands owned by Tanacross Inc. and the state, and has already received non-jurisdictional and Finding of No Significant Impact determinations from the Federal Energy Regulatory Commission.
Power generated by Yerrick Creek will be sold by Upper Tanana Energy (UTE) wholesale to the Alaska Power & Telephone Co. (AP&T).
"The community is highly appreciative of this USDA funding award, which will play a significant role in helping to complete the Yerrick Creek project for the benefit of energy consumers in the upper Tanana region," Tanacross Inc. president Robert Brean said.
Still, the $19 million project will require additional funding before construction begins. UTE said it plans to apply for $4 million in State of Alaska Renewable Energy Fund grants, $1 million from the U.S. Department of Energy, and other low-interest loans from the state within the coming year.
"While AP&T is able to help support completion of Yerrick Creek predominantly through private investment, some additional grant and low-interest loan funding support is required to assure the project is financially feasible," AP&T President and CEO Robert Grimm said. "We are hopeful that the State of Alaska will recognize the tremendous long-term financial relief this project provides to the state, in addition to families and businesses in interior Alaska."
The plant's developers previously received grants from the Denali Commission and Alaska Energy Authority and the USDA's High Energy Cost program in 2008.
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