A hydro license brings district heating one step closer in Juneau

After years of waiting, Juneau Hydropower Inc. was recently awarded a federal license for Sweetheart Lake Dam. It gives the company the go-ahead to start serious planning for a new multi-million dollar hydro facility. It could power a gold mine and supply heat to the downtown core of the capital city with an innovative system.

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Duff Mitchell calls getting the Federal Energy Regulatory Commission or FERC license a milestone. He’s the managing director of Juneau Hydropower. After waiting six years, he learned his company was receiving the license in early September.

“I hate to use it but it’d be like a liquor store. You bought all the liquor, you bought the store but you can’t sell it until you get permission. This is the permission,” Mitchell said.

In the U.S., water — like Sweetheart Lake — is considered a public resource. That’s why Juneau Hydropower had to apply for the regulatory license. That public resource could be used to generate electricity from a privately owned dam.

There are still a few more hoops to jump through, but Mitchell thinks they could start some preliminary work at the site as early as this winter.

Once the dam is built, the company plans to power the Kensington Mine, which runs entirely off of diesel. Meanwhile, Mitchell says they’ll also began construction next summer on a seawater heat pump in Juneau.

“And so we’re going to be trying to lay pipe in Juneau this summer, too,” Mitchell said.

The technology works similar to your fridge at home. Except, in this case, it’s warmth that’s transferred away from the water.

It’ll be powered by Sweetheart Lake dam and bring heat to buildings through pipes in the downtown core — displacing heating fuel.

But not everyone has been supportive of the dam project. Back in 2014, the privately-owned utility that services Juneau — AEL&P — sent a critical letter to FERC explaining there wasn’t a need for new hydro.

Tim McLeod — AEL&P’s president says that was before the dam proposal included the district heating idea.

“We did not forecast a load that would justify the project when we submitted that letter,” McLeod said.

Now that district heating is part of the equation, McLeod says he’s isn’t sure. He doesn’t know how much juice it would take to pencil out.

“I don’t have any knowledge of that. That haven’t talked to AEL&P about the heating district,” McLeod said.

But Juneau Hydropower might have to. McLeod says he expects the company will want to use AEL&P’s existing transmission lines. And Duff Mitchell agrees. He says he’ll work with the utility to make it happen.

For district heating to make sense, Mitchell says large Juneau buildings will have to come online, like the capitol complex, state office building and Juneau-Douglas High School. And eventually, people’s homes.

“It’s going to require a subscription. In other words, a lot of the neighborhoods are going to want to do it. It can’t be just one house,” Mitchell said.

He believes there’s interest from the large downtown buildings.

“Yes, the bottom line is that this reduces greenhouse gases. A lot of people are interested because this is the wave of the future.”

He says the Danish government thinks so, too. Denmark has a long history with district heating. And Mitchell says the country’s representatives have their eye on Juneau.

“So they’re working with us however and whenever they can, and they see Juneau as a flagship where they can also sell more Danish pipe and stuff in the future,” Mitchell said.

Mitchell thinks Denmark could help pay for some of the project cost with Danish bonds. And he believes that’s a real possibility, along with financing from the Department of Energy and private investors. A bill that passed the Alaska legislature this year also frees up low-interest loans from a state backed corporation.

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