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Throwing the switch at Bradley Lake.

This month marks the commercial startup of the Bradley Lake hydroelectric project, which carries the power of Kachemak Bay's pristine glaciers and abundant waters to 73 percent of the state's population. A 90-megawatt generating facility capable of producing 376 million kilowatt-hours annually, Bradley Lake is Alaska's largest hydroelectric project. At a cost of $312.5 million, it's also the biggest capital construction project ever undertaken by the state.

Capable of meeting 10 percent of the Railbelt's long-term energy requirements, the Bradley Lake project will "help us stabilize our power costs and reduce our dependence on fossil fuels," says Dave Eberle, project manage for the hydroelectric facility and an employee of the Alaska Energy Authority (AEA), the state agency responsible for Alaska's hydropower projects.

According to Eberle, statistics show that 95 percent of the electricity generated in the Railbelt area -- from the Kenai Peninsula to Fairbanks -- depends on fossil fuels. As fuel prices rise and fall, so do electrical rates -- creating a need for stable energy sources such as hydrogenerated electricity.

The fifth and largest of AEA's hydro projects, Bradley Lake's completion also marked several construction milestones: a $43 million savings over the original construction estimate, world records for tunnel boring and North America's first successful baldeagle-nest relocation project. Yet, to achieve these results, AEA and its contractors faced many challenges: operating in a delicate, rich natural environment; resolution of socioeconomic issues; designing a structure that could withstand earthquakes and cross fault zones; and coping with funding changes.

The challenges began nearly 30 years ago, when Bradley Lake was first recognized as a prime hydroelectric site. Sitting in a narrow glacial valley, 27 miles northeast from Homer at the tip of Kachemak Bay, the lake receives water from glaciers at the southern end of the Harding Icefield. In 1962 the site was authorized as a federal hydro project by the U.S. Army Corps of Engineers.

When the Crops failed to secure federal funding for construction, the Alaska Legislature assumed development of the project in 1982, giving responsibility to the Alaska Power Authority (now AEA).

The challenges had only begun. Before receiving a license from the Federal Energy Regulatory Commission to construct and operate the Bradley Lake hydroelectric facility, AEA had to answer many environmental questions. The Kachemak Bay area lies surrounded by state and federal parks and protected habitat regions. Not only would the proposed dam drown out the habitat of moose, goats and bears in the lake valley, but changes in the Bradley River flow could affect fish and waterfowl areas. Also discharge from the dam into Kachemak Bay had the potential to increase winter ice conditions.

With input from Homer residents, AEA worked through answers to the environmantal questions and by December 1985 received the FERC license for Bradley Lake. As AEA contracted with Stone & Webster Engineering Corp., of Boston, Mass., to design and engineer the project, Homer residents began asking other questions.

They sought to identify socioeconomic changes that could come with a potential construction boom. Residents wanted to know about the rules for local hire, the safety of workers on the job and the impact of job-seekers flocking to town.

AEA also faced engineering challenges. The proposed mountain valley dam, at 125 feet high and 600 feet long, had to be strong enough to withstand severe earthquakes. The 3.5-mile underground tunnel from the dam to the powerhouse at tidewater had to cross two fault zones.

Financing issues, too, threw up barries. An estimated $350 million was needed to complete the project. Initially, the state agreed to pay 50 percent, or $175 million, and a power sales agreement with Raibelt utility companies would finance the remaining 50 percent. Before signing a final agreement, however, the utilities wanted state assurance for funding an intertie system to connect the Bradley Lake project with their local electrical systems.

To answer local questions, AEA backed a Bradley Lake Steering Committee composed of Homer city council members and local residents. According to Larry Smith, a steering committee member who works as a carpenter, fisherman and consultant in Homer, "AEA was receptive to our information, and our issues were resolved in a cost-efficient way."

To answer design and funding questions, AEA worked through ongoing rounds of meetings, studies and signed agreements, while at the same time trying to move ahead with the project's construction timetable.

Funded by the state's $175 million, AEA obtained designs for a threephase construction plan that included four major contracts. Phase one covered the first major contract, site prereration, and would last from May 1986 to May 1987.

Phase two covered three more major contracts: general civil construction, powerhouse construction and transmission line completion, as well as procurement contracts for the project's turbine-generator units and remote-control equipment. Approximately 2.5 years would be needed to complete this phase.

The third and final phase would include site rehabilitation and installation of electrical-stability support equipment. It would start when the project came on-line in January 1990.

Phase One. Right on schedule, in June 1986, AEA awarded the first phase of the Bradley Lake contract to Alaska International Constructors-Martin Joint Venture. Bidding $22.9 million against a phase-one estimate of $33.3 million, Alaska International started a low-bidding trend that ran consistently for many other contracts awarded during the project's life span.

With a new name, Enserch Alaska Construction, the company started work in July 1986, facing formidable tasks. Because there were no roads to the site, a barge facility and airsstrip had to be built immediately to bring out materials and personnel. A road network -- reaching 10 miles up to the dam site and four miles along the bay's contour to the powerhouse -- had to be developed. Finally, a diversion tunnel had to be excacated so that the Bradley River could be rerouted while workers built the dam.

To satisfy local residents, Enserch agreed with the state's request to use local hire whenever possible for this first phase, which would require 150 to 200 workers. Other phase-one contract provisions also brought economic benefit to Alaskans: 10 percent of each amount had to go to minority-owned subcontractors and 3.2 percent to women-owned businesses.

As equipment was gathered on the construction site, environmental studies were started, bringing together the coordinated efforts of many different local, state and federal groups. One experiment focused on removing two active bald eagle nests built close to the construction areas.

An eight-year salmon study was begun to monitor salmon populations in the lower Bradley River to determine how flow from the project would affect the five local salmon species. To answer local concerns about increased icing in Kachemak Bay, AEA launched ice studies.

Other parts of the detailed environmental program focused on wildlife, waterfowl and human use of the area. Once the hydroelectric project was completed, everyone wanted assurance that the region's natural and human environment would be maintained or improved. AEA placed an environmental field officer, Dave Trudgen, on the job site throughout construction to enforce these programs.

"Our of our greatest challenges was to ensure that the Bradley Lake project was permitted properly," says Trudgen. "It was quite a challenge because we needed more than 150 permits from multiple agencies to cover the whole job."

At the end of December 1986, Enserch completed 70 percent of the site-preparation work, finishing up by July 1987. Still without a finalized power sales agreement, AEA shut the project down, leaving Bradley lake a quiet ghost town through the 1987 construction season.

By December 1987, six Railbelt utilities had signed a final agreement to buy Bradley Lake electricity. The commitments were from chugach Electric Association, 30.4 percent; the municipality of Anchorage, 25.9 percent; a consortium of Homer Electric Association and Matanuska Electric Association, 25.8 percent; Golden Valley Electric Association, 16.9 percent; and the city of Seward, 1 percent.

One last regulatory hurdle remained: to remove the power sales agreement from the purview of the Alaska Public Utilities Commission, whose review process could further slow project construction. The Alaska Legislature exempted Bradley Lake from APUC review in early 1988, which paved the way for AEA to take out long-term bond financing to complete the project.

Phase Two. In July 1988, AEA awarded the general civil construction contract to a joint venture of Enserch Alaska Construction, a subsidiary of a Dallas, Tex., firm; Losinger USA of Santa Anna, Calif.; and Ebasco Services of New York, N.Y. Under their low bid of $9.15 million, the Ensearch partners agreed to build the 125-foot high dam and dig the 3.5-mile power tunnel. Because of the one-year delay, AEA moved the startup of the hydroelectric facility to September 1991.

Quiet for more than a year, the mountains around Bradley Lake again hummed with activity when Enserch began construction in July 1988. Contract stipulations required that 90 percent of the Bradley Lake jobs go to qualified Alaska residents, with at least 50 percent of the workers from 22 different trades coming from the depressed Alaska Gulf Coast region. During phase two, only union workers were employed at the job site.

Other phase-two contract provisions were targeted for economic benefits: in addition to 10 percent minority-owned subcontractors and 3.2 percent women-owned contractors, AEA adopted federal equal employment opportunity hiring standards. As a result, 15.1 percent of the jobs went to qualified minorities and 6.9 percent to qualified women workers. Also, an Alaska Products Preference statute gave bonuses to contractors for using state-produced materials.

Through the 1988 construction season, Ensearch focused on excavating the powerhouse, drilling the power tunnel and tunnels that lead from the power tunnel to the powerhouse, and excavating the dam site. By year's end, 34 percent of the total project stood completed.

With the start of 1989, AEA awarded the second major phase-two contract, powerhouse construction, to H.C. Price Construction Co. of Dallas, Tex., for $31.7 million. The powerhouse would contain two turbine-generators capable of providing in excess of 45 megawatts each, with provisions for adding a third turbine-generator.

The company projected work would begin in April 1989, with the powerhouse struture largely completed and ready for turbine installation by early 1990. By early 1991, turbines would be ready for testing, with power on-line by September 1991.

Throughout 1989, Enserch kept drilling the power tunnel. The tunnel had three major segments: a 16,000-foot-long lower power tunnel going from the powerhouse up into the mountain, connected to a 750-foot vertical shaft that joined a 700-foot-long upper power tunnel bored into the Bradley Lake basin.

For the long, demanding lower tunnel, Enserch used a sophisticated tunnel-boring machine. Weighing 150 tons and stretching 400 feet, the $3.5 million "Mole" could work three times faster than conventional blasting and drilling techniques to excavate the tunnel's 15-foot diameter hole.

The tunnel-boring machine proved so successful that it broke two world records at the Bradley Lake site, boring 275 feet in a 24-hour period and 116 feet in an 8-hour shift. Beginning in March 1989, the tunnel excavation was finished in September 1989, 10 weeks ahead of schedule. Boring of the other two tunnel sections also was completed early.

"This could have been one of the worst projects we'd ever worked on, but we had some good things going for us," says Eddie Meeghan, Enserch's tunnel superintendent, who has 31 years of experience on worldwide tunnel projects. "We had some real experienced people, and, fortunately, we did not hit any bad ground with the boring machine."

Outside, on the upper dam site, Enserch also worked fast during 1989. In early April, work began on the concrete plinth, or toe, of the dam. Rock fill lay in place by August, and by late September, a 12-inch concrete facing covered the dam, seven weeks ahead of schedule. Spillway excavation also was completed.

In other respects, 1989 became the peak year for the project. Manpower reached a high of 385 contractor personnel in June. The final major contract, for the 20-mile transmission line consisting of two parallel 115-kilovolt lines and support equipment, went to Newbery Alaska, the Anchorage subsidiary of a Buffalo, N.Y., company, for $17.2 million. On schedule with powerhouse construction, H.C. Price employee had the structure completely enclosed before winter started.

Financially, 1989 brought good results for AEA. Low-bidding had already reduced the construction costs. The first issuance of Bradley longterm revenue bonds in September 1989, for $105 million, netted an average interest rate of 7 percent, far below the estimated 10 percent.

The purchasing utilities also benefited from the financial savings, as wholesale power costs dropped from 6 cents per kilowatt hour to 4 cents per kilowatt hour. In the long term, the state would receive its savings as a rebate for its $175 million equity in the project.

Positive environment results also appeared by the end of 1989. The 1986 attempt to move two young bald eagles from their natural nest to an artificial area resulted in the first successful direct relocation of bald eagles in North America. Close on-site monitoring by AEA with oversight by federal and state officials had greatly reduced the project's potential environmental impact during construction.

"The project was developed in an ideal environmental manner," says Don McKay, an Alaska Department of Fish and Game biologist who supervised the project's permitting program. "It contained environmental specifics right from the beginning and the power to implement these specifics. It's rare to see this level of effort in a construction project."

The 1990 construction year saw the completion of most of the details for the hydroelectric facility. By the end of October, 86 percent of the job was finished. Initial startup testing of the turbine-generators done in May 1991 proved successful, giving a green light for commercial operation in September 1991.

Phase Three. The phase-three contract for site rehabilitation went to Doyle Construction of Kenai in April 1991 for $4 million.

Overall, it appears that challenges presented by the Bradley Lake project were met successfully. While environmental questions such as icing on the bay are still being studied, local residents seem satisfied with the project. Nancy Lord, a writer, commercial fisherman and Bradley Lake Steering Committee member, says, "AEA did a first-rate job in the way it went about this project."

Socioeconomic questions also received positive answers. It is estimated that $90 million in wages and area businesses received nearly $60 million in goods and services. In addition, 96 percent of the jobs went to Alaska residents, and the accident rate "was about one-tenth of the national average on similar projects," says Dave Eberle.

In terms of engineering challenges, the construction broke world-tunneling records, produced a dam capable of withstanding earthquakes measuring 8.5 on the Richter scale and built a powerhouse that can withstand 8.3 foot ideal waves.

Financially, the project exceeded expectations. AEA's second revenue bond sale of $60 million in July 1990 again brought a low interest rate, dropping utility costs for utilities to less than 4 cents per kilowatt hour. Although initially power costs from Bradley Lake will be slightly higher than that for fossil fuels, they are projected to be lower within the next decade. In August 1990, AEA's Board of Directors revised the overall construction budget from $355.9 million to $312.5 million, almost $43 million below the original estimate.

"This project shows that Alaska can take short-term oil profits and put them into long-range future energy projects," says Eberle. "Perhaps this is an approach our state should follow more in the future."
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Title Annotation:includes related article; commercial startup of the Bradley Lake hydroelectric project
Author:Woodring, Jeannie
Publication:Alaska Business Monthly
Date:Sep 1, 1991
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