AEA secures $206.5M for Alaska's first HVDC submarine power transmission line

The Alaska State Legislature's House Finance Committee convened on March 20, 2025, to discuss significant developments in energy infrastructure and funding opportunities for the state. A key focus of the meeting was the proposed HVDC submarine cable project, which aims to enhance the resilience and efficiency of Alaska's electric transmission system.

The Alaska Energy Authority (AEA) announced that it has secured $206.5 million in federal funding for the project, which is designed to create a redundant power transmission line from Nikiski to Beluga across Cook Inlet. This initiative is crucial for improving energy reliability, especially in light of past incidents like the Swan Lake fire, which left northern utilities without power for months. The new cable will facilitate better power exchange between southern and central Alaska, allowing for increased integration of renewable energy sources and reducing carbon emissions.

The project is expected to generate significant economic benefits, including the creation of approximately 1,470 jobs and an estimated economic output of $332 million during its construction phase from 2024 to 2032. However, an additional $143.8 million is still needed to fully fund the project, which has a total estimated cost of $413 million.

Committee members also discussed the potential impact of tax credits on the project's overall cost, with estimates suggesting that these credits could offset expenses by up to $100 million. The AEA is currently working with a national accounting firm to explore available tax incentives, although uncertainties remain due to changes in federal administration policies.

In response to a question about alternative methods of crossing Cook Inlet, such as a bridge, officials clarified that this option was not considered due to logistical challenges and high costs associated with bridge construction.

The meeting underscored the importance of modernizing Alaska's aging transmission infrastructure, which averages over 50 years old, and highlighted the state's commitment to enhancing energy resilience and sustainability through innovative projects like the HVDC submarine cable.