The 2012 capital budget approved by Gov. Sean Parnell included more than $40 million for energy projects that benefit the Kenai Peninsula.
Homer Electric Association’s main priority, a transmission line upgrade between Nikiski and Soldotna, received $20 million.
That was $5 million less than the utility asked for, but HEA General Manager Brad Janorschke said in a written statement the appropriation is enough to benefit the association.
“We will now begin the design and engineering phase of the project and then enter into the construction phase,” Janorschke said in the press release. “The timing of the construction phase will depend on the outcome of the design plans for the upgrade of the line.”
The upgrade will take the 69-kilovolt line that is used to move power between Nikiski and Soldotna and turn it into a 115-kilovolt line. That means that service to the Kenai and Nikiski area will be more reliable.
In the statement, Janorschke said the state appropriation will cover the majority of the cost of the upgrade. HEA will pay for the remaining costs.
The approved budget also includes funding for a variety of alternative energy projects.
The tidal project proposed by Ocean Renewable Power Company received a $2 million grant.
HEA’s Joe Gallagher said in the utility’s statement that Ocean Renewable hopes to have a small tidal generator installed in Cook Inlet sometime during the summer of 2013. Homer Electric is partnering with that company on its tidal efforts.
Ormat Nevada received almost $2 million for a geothermal project on Mount Spurr.
Another $12.5 million appropriation for a geothermal development in that area was also listed, with Alaska Energy Authority designated to handle the money.
Ormat tested wells last summer and this summer, and is expected to continue its work next summer if this summer’s studies continue to show potential.
The budget also included about $1 million for field studies at Grant Lake, where HEA has proposed a hydro project, more than $100,000 for work on Independence Power LLC’s Fourth of July Creek hydroelectric project near Seward and $1 million for a remodel of the Cook Inlet gas gathering system.
A number of other Railbelt utility projects received funding, including work on transmission lines that connect the Kenai Peninsula to the Anchorage area, improvements to the Girdwood and Sterling substations, and work on the Seward Power Plant.
Nikolaevsk, a small community north of Homer, also received funding for a community natural gas pipeline. That will allow the area to begin the process of connecting with the Enstar pipeline in the area.
Parnell’s final capital budget also includes nearly $66 million for the Alaska Energy Authority to pursue a large hydroelectric project and $21 million for the Alaska Gasline Development Corporation to continue with year two of work on an in-state gas project.
The large hydro appropriation was a sticking point earlier in the budget process, when state senators wanted to link all energy projects, including that one, into an all-or-nothing package. The state house removed that language, but Parnell left a majority of the energy projects untouched.
Vetoes came primarily in the form of reduced spending on various projects.
The largest blows to local projects were a $9 million reduction on the Battle Creek Diversion project, and the complete veto of money for a Homer natural gas pipeline. The legislature had slated $10 million for that project.
A Quartz Creek to Soldotna transmission line upgrade and geothermal development on Mount Spurr, both funded through AEA, each received about $5 million less than the Legislature had budgeted. Smaller projects also saw smaller cuts.
In HEA’s statement, Janorschke credited area legislators for funding local projects.
“We worked closely with the Kenai Peninsula legislative delegation to secure funding for the Nikiski to Soldotna transmission line upgrade,” Janorschke said in the written statement. “A special note of appreciation is due to Senator Tom Wagoner who was able to include the project in the original capital budget and to Representative Mike Chenault who supported the project in his leadership role as Speaker of the House. We are very fortunate to have legislative representation that works on behalf of the members of HEA.”