Chugach Electric Explores 4 Hydropower Projects to Address Natural Gas Shortage

Alaska's largest utility files early permit applications to investigate potential hydropower sites in Southcentral Alaska.

Feb. 16, 2026 at 12:39am

Got story updates? Submit your updates here. ›

Chugach Electric Association, Alaska's largest electric utility, has filed early applications for permits with state and federal regulators to investigate four new hydropower projects in Southcentral Alaska. The utility says the projects, if developed, could reduce its reliance on natural gas and provide a stable source of clean power as local gas production declines in Cook Inlet. The proposed hydropower sites are located on the Kenai Peninsula and in the Matanuska Valley, with the potential to generate a combined 52 megawatts of electricity.

Why it matters

Chugach Electric is exploring these hydropower projects in response to concerns about a future shortage of natural gas from Cook Inlet, which could lead to costly imports of liquefied natural gas (LNG) and higher utility bills for customers. The utility sees hydropower as a way to reduce its dependence on fossil fuels and meet its decarbonization goals.

The details

The four proposed hydropower projects include a run-of-river project at Canyon Creek on the Kenai Peninsula, as well as larger dam-based projects at Caribou Creek, Godwin Creek, and Boulder Creek. The projects were selected from more than 150 options and would not be built in areas accessible to migratory fish like salmon. If developed, the projects could offset a 'material' amount of natural gas used by the utility, though they would require years of study and permitting before construction could begin.

  • Chugach Electric filed early permit applications for the hydropower projects in 2026.
  • The utility wants to beat a December 31, 2033 deadline to start construction in order to receive federal tax credits.

The players

Chugach Electric Association

Alaska's largest electric utility, which is exploring the new hydropower projects.

Arthur Miller

Chief executive of Chugach Electric, who stated that hydropower is the 'lowest cost long-term energy source for ratepayers' and will help the utility reduce its use of fossil fuels.

Antony Scott

Director of economic and regulatory analysis for Renewable Energy Alaska Project, who said the proposed hydropower projects could offset a 'material' amount of natural gas used by the utility if all are built.

Got photos? Submit your photos here. ›

What they’re saying

“Hydropower is 'the lowest cost long-term energy source for ratepayers.' It allows the utility to 'reduce the need for fossil fuels, and helps us meet our decarbonation goals'.”

— Arthur Miller, Chief Executive, Chugach Electric Association

“It is unfortunate that they've waited until now to pursue these sorts of opportunities, given that the current natural gas crisis has been known to be coming right around this time. Having said that, the best time to plant a tree is 20 years ago, and the next best time is today. So I'm glad that they're pursuing it now.”

— Antony Scott, Director of Economic and Regulatory Analysis, Renewable Energy Alaska Project

What’s next

Chugach Electric plans to conduct site visits and feasibility studies to investigate the hydropower projects this year, launch a public website about the efforts, and study other possible projects. The utility will also provide more details in its monthly newsletter in March.

The takeaway

Chugach Electric's exploration of new hydropower projects represents a proactive effort to diversify its energy sources and reduce reliance on natural gas as local production declines. If successful, these projects could help the utility meet its decarbonization goals and provide a more stable and affordable energy supply for its customers in Southcentral Alaska.