​In the postcard-pretty coastal mountains near Cordova, Alaska, the Shephard Glacier feeds a stream that got its name more than a century ago when the town’s boosters recognized its power-generating potential. But daunting construction costs kept postponing their vision for Power Creek, and the townspeople got used to paying dearly for electricity generated by burning diesel fuel that had to be barged in. 

Then in the late 1990s, the availability of state and federal grants started Cordova Electric Cooperative on a path to developing Power Creek and another hydroelectric project, thus reducing its dependence on diesel to only 20 percent of its load. 

The residential rate topped a whopping 30 cents a kilowatt-hour before Power Creek came online. That was reduced to 17 cents by a state power-cost equalization subsidy (funded by crude oil tax revenues), but commercial accounts like North Pacific Processors, Cordova’s biggest business, didn’t qualify. And in the winter of 2000, NPP paid as much as 25 cents, double the industry average. 

“Only a company that has no choice at all would locate here,” said Ken Roemhildt, the plant’s superintendent.

Down the street, Ocean Beauty Seafood, a salmon processing plant, spent $70,000 a month on electricity. Manager Hap Symmonds, who also happened to be Cordova Electric’s board president, noted with a helpless shake of his head that competing plants in Valdez and Seward paid less than half that.

Because of Cordova Electric’s high rates, the town’s two cold-storage facilities stayed shuttered most of the year. Without refrigeration, Cordova couldn’t extend the processing season the way the other towns could.

Symmonds joined the co-op’s board in 1993 out of concern for “the high cost of power.” Power Creek is “going to be a real boon to Cordova,” he said at the time.

Lower rates were “a critical objective” of the project and critical to getting Cordova’s economy moving again, added Ken Gates, the co-op’s CEO and general manager. 

The price tag for the hydroelectric project was $24 million. With enthusiastic help from Alaska’s congressional delegation, Gates had already secured almost $9 million in grants from the U.S. Department of Energy and was busy bargaining with the state for a $12 million grant. To make it easier for legislators in Juneau to swallow, he proposed dropping out of the power-cost equalization subsidy program, which would save the state about $600,000 annually.

Power Creek was a financial winner even without the larger grant, he said. Cordova Electric would save $1 million on diesel annually, which could go toward debt reduction or lower rates or both. He predicted that residential rates would be 25 percent lower in five years. 

“We can control our destiny this way,” he said. “It’s an exciting project, especially since they’ve been talking about it for the last 90 years.”