AP&T has supplied low-cost, reliable electrical power and communication services to rural Alaska for 39 years. The company's steady growth merges modern technology with historic reliability to meet business and residential needs.

Alaska Power Company (APC) is recognized as one of the most progressive electric utilities in Alaska, building hydroelectric facilities, retrofitting diesel systems with the latest in remote controls, and extending power lines to additional customers.

The key to APC's success as a supplier of electrical power is its willingness to develop long-term, reliable energy sources. While 2001 power sales were down slightly in the communities we serve due to a combination of warm weather in Alaska and an economic downturn, APC continued its program of equipment upgrades and expansion of services.

Hydroelectric

AP&T has more hydroelectric projects on line, under construction and in the planning stages than any other investor-owned utility in Alaska.

The continued quest to harness renewable resources is a mix of modern technology, environmental priorities and the ability to tackle complicated engineering problems.

AP&T works with landowners, federal and state management and resource agencies, consumers and local government to offer safe, reliable and reasonably priced electric power. Diesel-powered generation systems remain a long-term reality in some of the company's remote areas. Hydro can replace or supplement reliance on fossil fuels, ensuring long-term energy service and reliability.

As of June 30, 2004, we shared out 4th successful year of commercial operation with our partners in the Pasabien hydroelectric project in Guatemala. Generation for fiscal year 2004 totaled 45,510 MWh. The Pasabien project has been the epitome' of reliability operating with zero technical difficulties or equipment failures since becoming operational over 4 years ago. A slow start to the "rainy" season in the region has lead to output projections for FY 2005 in the vicinity of approximately 42,000 Megawatts.

Our efforts in Guatemala are led by Eduardo Barrientos, General Manager of HydroWest Guatemala. Eduardo's breadth of experience in the electrical market in Central America will make him a key participant in the development of the Rio Hondo II project and other projects in our future.

BBL Hydro

At the time of its licensing and construction, the Black Bear Lake Hydro Project was the most ambitious project in company history. This 4.5-megawatt storage project is located on Prince of Wales Island, 15 miles northeast of Klawock. This project first came on line in late 1995. Since then a majority of the communities on the island benefit from this environmentally clean energy.

Upper Lynn Canal Power Supply System

The Upper Lynn Canal Power Supply System was formed by AP&T to coordinate electric utility operations currently serving Skagway and Haines. The Prince of Wales Power Supply System is a similar plan.

Goat Lake Hydro

The Upper Lynn Canal's cornerstone is the Goat Lake Project, a 4.0-megawatt hydroelectric facility located seven miles north of Skagway. The 204-acre glacially fed lake has the winter storage necessary to sustain year-round hydro generation.

Goat Lake Hydro became operational in December 1997, and was interconnected with Haines via a 15-mile submarine cable in September 1998. The submarine cable was laid in Taiya Inlet, a fjord with depths up to 1,500 feet. This project allowed diesel-powered generators at both the Skagway and Haines plants to be quiet for the first time in nearly 80 years.

Dewey Lakes Hydro

The 943 kilowatt Dewey Lakes Hydro Project is located adjacent to downtown Skagway. This project was built in the early 1900's and has been operated by AP&T since 1957. This run-of-river project is currently going through a re-licensing process with the Federal Energy Regulatory Commission. An application is expected to be submitted in 2005.

Kasidaya Creek Hydro

In October 2002 the Federal Energy Regulatory Commission issued a license for this 3.0 megawatt run-of-river project that is located 3 miles south of Skagway. This project will intertie with the existing submarine cable that presently connects Skagway and Haines, supplementing the other hydro projects during the summer months. Construction is expected to begin in 2004.

South Fork Hydro

This 2.0 megawatt, run-of-river, hydroelectric project received a non-jurisdictional determination from the Federal Energy Regulatory Commission. Instead of a federal license, this project had only state and federal environmental permitting, which has been completed. Construction is expected to begin in 2004 or 2005.

Connelly Lake Hydro

The Connelly Lake Hydro Project is under a preliminary permit with the Federal Energy Regulatory Commission to develop and submit a license application. This storage project, which would include a small dam, would have a power plant of up to 10 megawatts. Located up the Chilkoot River approximately 12 miles southwest of Skagway and 15 miles northeast of Haines, this project is still in the preliminary design stage.

Lutak Hydro

The Lutak Hydro Project operates in a run-of-river mode, providing seasonal energy to the Upper Lynn Canal Power Supply System. Located near Haines, this small project was purchased from a local developer in 2002.