Feds fund peninsula energy efficiency efforts

The United States Department of Agriculture announced it is investing $42 million for climate-conscious infrastructure in rural Alaska early this month, which will include loans for sustainable projects on the Kenai Peninsula.

The initiative is part of the Build Back Better agenda under the Biden-Harris administration, according to a USDA press release issued Dec. 3. Under the program, the Electric Energy Cooperative, which is a subsidiary of the Homer Electric Association, is set to receive a $38 million loan to finance a battery energy storage system on the Kenai Peninsula.

Jo Cappeto, USDA public affairs specialist, said in an email that the battery is set to improve much of the electricity consumption on the peninsula.

“The battery energy storage system, with its fast response time, will be able to respond more effectively to system disturbances, thus reducing load shed events (which is critically important to some of our industrial customers) and reducing potential system restoration events,” she wrote. “Homer Electric Association’s typical combustion turbine takes 7 to 15 minutes to start, whereas the BESS output is immediately available.”

The battery energy system will have a capacity of 46.5 megawatts and will be able to deliver up to 93 megawatt hours of energy on demand. Megawatts are used to measure the output of electricity or energy from a power plant, while megawatt hours refer to how much electricity is consumed per hour.

According to the U.S. Energy Information Administration, one home consumes an average of 893 kilowatt hours of energy per month.

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Cappeto said via email that the application process for the USDA loan was “long” and “thorough.” A construction work plan approved by engineers, a budget, load forecasting for the area, a 10-year financial forecast, emergency response plan and environmental impact approval are all elements included in the application.

In addition to the battery energy storage system on the Kenai Peninsula, Sitka received a $4 million loan to finance generator upgrades and modification projects for one of its hydroelectric facilities.

Cappeto said Tuesday that the battery is already ready to use on the Kenai Peninsula, and that HEA is working on generating more sustainable energy the system can store.

The USDA announced it would also invest in the Red Diamond Liquor Barn in Soldotna by granting the business $20,000 to install an energy-efficient walk-in cooler.

There are seven total businesses set to receive funds from the USDA, as well as eight Alaska fishing vessels.

Reach reporter Camille Botello at

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