The Anchorage Assembly on Dec. 12 reviewed a package of three agreements intended to replace an expiring 1984 arrangement and preserve municipal access to water from Eklutna Lake for the Anchorage Water & Wastewater Utility (AWW).

Department of Law staff and AWW counsel walked the Assembly through an "s" version of an ordinance and three contracts: (1) a water facilities interconnection agreement to build and connect portal-valve infrastructure, (2) a long-term water transportation agreement under which AWW would transport owners' water through its pipes, and (3) a water rights agreement designed to replace the 1984 agreement and provide a contractual path for the municipality to obtain priority water rights.

Why it matters: the 1984 agreement that governed AWW’s preferential use of Eklutna Lake was due to expire at the end of 2025 (briefly extended to June 1, 2026). Counsel said the package preserves AWW’s access to the lake while changing how compensation is calculated and capping the municipality’s annual payment exposure.

Key terms and numbers

- Current and new compensation: AWW currently pays roughly $1,200,000 per year under the existing arrangement, presented as background. Counsel Michael McLaughlin said the proposed water-rights agreement would cap compensation at $600,000 per year, subject to inflation, payable in cash or in kind; AWW’s own generation can offset part of that obligation.

- Long-term transfer: the agreement includes an option for AWW to receive up to 41,000,000 gallons per day of the owners' water rights. Counsel described a contractual transfer that would make those water rights municipal property after about 35 years, at which point compensation would end.

- Construction and control: the interconnection agreement would make power owners primarily responsible for design, approvals and construction of portal-valve facilities while preserving AWW’s ability to review plans and to override or shut down the owner-controlled valve in an emergency to protect water quality or AWW infrastructure.

Concerns raised in the session

Assembly members pressed officials on safety of the portal valve and on the long time horizon for acquiring rights. One member said the decades-long horizon raises risks if circumstances change; in response counsel and staff pointed to contractual triggers that could allow earlier acquisition of rights if the owners sell or cease operations, and they said the contract was written to make the transfer automatic rather than discretionary at the 35-year mark.

Transparency and public statements

Department of Law highlighted a confidentiality/public-statement clause (article 14.5(b)) in the interconnection agreement that, as written, would limit AWW's ability to make public statements about the fish and wildlife plan and related operations. The attorney advised deletion of subsection 14.5(b) before execution, saying the subsection "does prevent AWU broadly from saying anything that could have negatively affect[ed] public perception of the final fish and wildlife plan" and could impede necessary safety or operational disclosures.

Governance and the municipality’s voting rights

Several Assembly members raised a broader governance concern: they said the municipality has lost meaningful voting authority on the hydropower owners' governing body in prior regulatory and transactional processes. Department of Law summarized past and ongoing legal steps to restore the municipality’s vote through the Regulatory Commission of Alaska and related suits, saying some attempts were unsuccessful and a third suit is ongoing.

Next steps

No formal votes were taken at the work session. Department of Law and counsel offered to draft ordinance floor amendments. Members were told the item will be on the Assembly agenda on Tuesday; counsel and staff offered to provide further risk assessments and draft language (including language to delete article 14.5(b) or attach other conditions) prior to that meeting.

The work session left several open questions for Tuesday’s agenda: whether the Assembly will approve the agreements as submitted, approve them with conditions (including deletion of the public-statements subsection), or reject them while pursuing other legal avenues to restore municipal voting authority.