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AEA, Railbelt utilities pursue Kenai Peninsula’s largest hydropower project in 30 years

May 4, 2022

The Alaska Energy Authority (AEA), in partnership with the Railbelt utilities, has filed a license amendment with the Federal Energy Regulatory Commission as an initial step in pursuing the Dixon Diversion. The addition of Dixon Diversion would be the largest hydropower development project on the Kenai Peninsula since the Bradley Lake Hydroelectric Project was first developed. The proposed project would be located five miles southwest of Bradley Lake, approximately 27 miles northeast of Homer on the Kenai Peninsula.

AEA owns the Bradley Lake Hydroelectric Project, the largest hydroelectric plant in Alaska. This 120-megawatt facility generates 10 percent of the total annual electrical energy used by Railbelt electric utilities and provides some of the lowest-cost power in the state to about 550,000 Alaskans.

Following the successful completion of the Battle Creek Diversion project in 2020, which increased Bradley Lake’s output by about 10 percent, AEA is studying the Dixon Diversion to optimize Bradley Lakes’ energy potential further. Similar to Battle Creek, the Dixon Diversion would divert water from the East Fork of the Martin River into the Bradley Lake reservoir. The Dixon Diversion project, as planned, could increase the power output at Bradley Lake by almost 50 percent.

Bradley Lake currently electrifies the equivalent of 54,000 homes. The Dixon Diversion Project has the potential to power an additional equivalent of up to 30,000 homes. The development timeline includes five years of studies and permitting, followed by five years of construction. The project is projected to create significant job benefits in construction and operations over its lifespan. The project’s estimated construction cost is between $400 and 600 million. The construction funding source is yet to be determined.

“I am planning for the near-term rapid growth of renewables on the Railbelt,” said Governor Mike Dunleavy. “The Dixon Diversion has the potential to be the largest renewable investment within the Railbelt since the Bradley Lake Hydroelectric Project was built 30 years ago. Natural gas prices have only risen while the cost of renewable energy has plummeted, and Alaska needs to consider where it will be 20 years from now. The Dixon Diversion is a big step towards energy independence.”

“We and our Railbelt utility partners are also planning to upgrade transmission and energy storage capacity to improve reliability and resiliency,” said Curtis W. Thayer, AEA Executive Director. “These improvements will facilitate and increase the benefit from new renewable generation on the Railbelt, such as the Dixon Diversion.”

“I appreciate the Governor’s vision and leadership on this important topic,” said Tony Izzo, CEO of Matanuska Electric Association and the Chair of the Bradley Lake Project Management Committee. “The Bradley Lake Project Management Committee works to ensure the reliable operation of the biggest renewable asset in Alaska. Alaskan leaders and visionaries of the 1950s and 60s recognized the power generation potential of this glacier fed lake. Because of their vision and expertise, ratepayers benefit from the low-cost power of Bradley Lake hydro today. With the Governor’s support, we are working to diversify our energy mix, including clean, renewable energy for future Alaskans.”

To learn more about this project, AEA will host a Joint Agency and Public Meeting this June to share additional information. For additional information, please contact AEA Director of Owned Assets Bryan Carey at or by phone at (907) 771-3065.

What: Joint Agency and Public Meeting for Dixon Diversion Project

When: Tuesday, June 14, 2022, 5-7 p.m.

Where: Aspen Suites Hotel, 91 Sterling Hwy, Homer, AK 99603

The Railbelt utilities include Chugach Electric Association, Golden Valley Electric Association, Homer Electric Association, Matanuska Electric Association, and the City of Seward.

The Alaska Energy Authority is a public corporation of the state. Its mission is to reduce the cost of energy in Alaska.