The leaders of Alaska and Yukon met in Vancouver and announced a joint study into the possibility of Alaska developing the West Creek hydro project near Skagway and exporting the energy to Yukon’s isolated grid.
The West Creek hydro development was studied 30 years ago, then again last decade. The project would see the construction of an 18-25 megawatt hydro dam on West Creek, off the Taiya River, about 7 miles from Skagway. Skagway does not need the energy in the winter when Yukon does, but rather in the summer when the cruise ships are in dock.
The public announcement by Governor Parnell and Premier Pasloski was vague in terms of timing and cost.
According to Alaskanomics the unemployment rate in Skagway is 23% in the latest state statistics. A major hydro project would create many jobs in a high-unemployment area of Alaska.
The project is a perfect candidate for a P3 partnership. Have the private sector front the development cost in return for a financial return over time. BC Hydro is doing this in several places in northern BC. It could be a win-win-win proposition; Yukon and Skagway get electricity, the developer earns a respectable return and Alaska exports some renewable energy.
Alas, while Alaska has a remarkable number of renewable energy projects, it has little to show in the way of P3 type projects.
In spite of the need for jobs in Skagway, the likely outcome is that there will be no development if the project risk is borne by a small municipality like Skagway (population less than 1,000 people). The project needs a proponent with deep pockets.