Anchorage Assembly Work Session on Klutna Hydro Agreements - 2025-12-12
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Anchorage Assembly Work Session on Klutna Hydro Agreements - 2025-12-12
The Anchorage Assembly convened on December 12, 2025, to review and discuss three proposed agreements (AO2024-123S) with Anchorage Hydropower and the Klutna Power Owners. The session focused on resolving the impending expiration of the 1984 water use permit, implementing the Governor's final Fish and Wildlife Program via the "portal valve option," and securing long-term water rights for the Municipality. Key speakers from the Department of Law, Anchorage Water and Wastewater Utility (AWW), and Anchorage Hydropower Utility presented the terms, while assembly members expressed significant concern regarding the Municipality's loss of voting authority on the hydropower utility and the length of the 35-year timeline for acquiring these rights.
Consent Calendar
- No consent calendar items were discussed; the meeting was dedicated entirely to deliberation and work session review.
Public Comments & Testimony
- No public comments or external testimony were recorded during this work session.
Discussion Items
- Agreement Overview and History: Michael McLaughlin outlined the history dating back to 1984 and 1991, explaining that AWW currently operates under a preferential use permit subject to an annual compensation of approximately $1.2 million, which expires in June 2026. The three new agreements aim to replace the 1984 agreement, facilitate the portal valve construction, and manage water transportation.
- Water Facilities Interconnection Agreement: David Persinger and Christopher Constant described this as a construction agreement where power owners design and build the portal valve, while AWW retains the right to override and shut down the flow if safety or water quality risks arise. Persinger stated he was confident in the safety controls, though Assembly Member Constant expressed concern that he had heard otherwise from the AWW engineering team regarding clear identification of risks.
- Long-Term Water Transportation Agreement: This agreement allows AWW to transport the power owners' water to the portal valve at no cost in exchange for AWW continuing to use the intake valve and tunnel sections. It includes protocols for maintenance and shutdown coordination.
- Water Rights Agreement: This agreement caps AWW's annual compensation for water use at $600,000 (subject to inflation) and provides an option for AWW to acquire actual water rights (up to 41 million gallons per day) free of charge after 35 years (circa 2060). Anna Brawley noted the Municipality had significant leverage in these negotiations and was willing to wait 35 years to secure these rights.
- Confidentiality Provisions: Assembly Member Eva Baldwin Day highlighted Article 14.5(b) of the Interconnection Agreement, which restricts AWW's ability to make public statements that might negatively affect the perception of the Fish and Wildlife Program. She expressed strong opposition to this restriction given its implications for government accountability and transparency, recommending the provision be deleted prior to execution.
- Municipal Voting Rights: A significant portion of the discussion centered on the Municipality's lack of voting authority on the Klutna Power Owners committee, despite owning 19% of the utility. Councilmembers expressed deep concern that the current arrangement anathema to the city charter and public trust. Anna Brawley and others discussed the potential for the Assembly to make the agreement's approval contingent on the co-owners supporting an application to restore the Municipality's vote to the Regulatory Commission of Alaska (RCA), potentially on a per-capita basis. The Department of Law stated they were willing to draft such conditional language.
Key Outcomes
- Deliberation Status: The Assembly adjourned the work session without a final vote, directing the Department of Law to draft amendments. These amendments were requested to: 1) Delete Article 14.5(b) regarding public statement restrictions, and 2) Potentially condition the approval of the agreements on the co-owners (Chugach and MEA) supporting the Municipality's application to the RCA to restore voting authority.
- Next Steps: The issue is scheduled to be brought before the Assembly for decision on the Tuesday following the meeting (December 16, 2025).
- Risk Acknowledgment: Members acknowledged the risk of the 35-year timeline for water rights acquisition, though officials noted the contract terms are binding and include triggers for earlier acquisition if the power owners sell or shut down the project.
- Timeline Context: The existing agreements are set to expire on June 1, 2026, providing a window for these renegotiations and conditional amendments.
Meeting Transcript
December the 12th, 2025. It's 210 on the record from 210 to 310. We're here to discuss AO2024-123S, or the original version and ordinance authorizing the municipality of Anchorage, Anchorage Water and Wastewater Utility and the municipality of Anchorage to Anchorage Hydro Power to execute and enter into three agreements pertaining to the municipal public water supply and the Klutna Hydroelectric Project Fish and Wildlife Program. We'll start with introductions, Mr. Johnson. Zach Johnson, Jared Gerger, Scott Meyer. Anna Brawley. Christopher Constant. Do we have Ms. Baldwin Day on the phone? Yes, you do. Thank you. Any other members on the phone? Okay, I don't think so. We're also joined by uh the administration. David Persinger, General Manager, Anchorage Water and Wastewater Utility. Michael McLaughlin, outside counsel to AWW and Mark Spafford, deputy municipal manager and Anchorage Hydropower Utility Director. Second. So the assembly, uh, these items were introduced months ago early this year, with the intent to have them uh proceed through the assemblies process and uh see what happens to them. But after months of successive delays, um, in order to kind of take the onus off of the assembly to act when it wasn't ripe and ready, we referred the agreements to the Department of Law to do some work and to come back with a reasonable proposition to us. And so um effectively what we have before us are some updated versions that have been, I believe, um, worked on by the Department of Law. So today's work session will be primarily driven by the review and analysis of the Department of Wall, and then we'll have some discussion with the utilities and their counsel. We have outside counsel here from Landy Bennett Blumstein, Andy Erickson as well. And so um and Leslie may be on the phone or not. I don't know less they need. And so uh with that, then we'll pivot over to our friends from the municipal department of law. Thank you. Um, and thanks all for your attention to this. Just to help you navigate what you have in front of you. There are two versions. There's can you switch microphones or maybe pull it real close and see if it works? Is this better? Yeah, try a different microphone. We've been having some mic issues better. Can you pull closer? How about this? That's fair. Thank you. Okay. Uh so to help you navigate the documents you have in front of you. Um, there's the original, there's the original version that was submitted in December of 2024, and then the S version. And we are uh asking you to take a look at the S version. That's kind of the predominant version. And then but there are is some information in the original packet that might be useful. We uh so the S version has some the three contracts attached to it with some modifications that we made, but it does not have all of the uh technical attachments to those original agreements. So if you would want to look at the original technical attachments that would also attach to the to the S version agreements, you should look at the original packet just to navigate that. Um but I'm gonna actually hand this over to uh the presentation over to Dave Persinger from EWU and uh Mr. McLaughlin or outside council to kind of start walking you through uh why we're here and what we're doing. Thank you. So I'll I'll go ahead and start out if you can go to the next slide, please.
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