How a historic influx of federal dollars is remaking Alaska.
Above: Wind farm atop Pillar Mountain in Kodiak. Photo by Michelle Theall, wilddepartures.com
Federal funding has long been crucial to Alaska’s economy, even before statehood. From the Alcan to the pipeline to our airports and beyond, it props up Alaska’s transportation and energy sectors, providing the infrastructure necessary to move people, fish, oil, and minerals. Federal programs have also long supported education, health care, research, and much more. In each case, a steady—and often overlooked—flow of federal dollars helps Alaskans afford the cost of life in the North.
Now two recently passed laws are taking that support next-level. The impact is already here from the 2021 Bipartisan Infrastructure Bill, which directs billions of dollars to Alaska. A second funding wave, mostly in tax credits and rebates, is only beginning to arrive from the 2022 Inflation Reduction Act, aimed at tackling climate change.
Together, they engage federal agencies in projects that will transform life for many Alaskans. Priorities will surround modernizing infrastructure, addressing climate impacts, and jump-starting renewables.
Across the state, experts describe the opportunities as generational, once-in-a-lifetime, or simply unprecedented. They also come with a promise to include Alaska’s rural and underserved communities that historically have been left behind. And while the laws reflect Biden administration goals on infrastructure and climate, Alaska’s bipartisan delegation is enthusiastically bringing the investments home.
It’s now up to Alaska’s builders and community leaders to put the funds to work. Below, meet some of them as they prepare to leave their mark on Alaska.
Getting online
As a teen in the 2010s, Brittany Woods-Orrison stood in clouds of mosquitoes outside Rampart’s tribal office, waiting to use the community’s internet connection. Occasionally a bear would rustle through nearby brush. “And it was all for this really slow connection,” she laughs, remembering her village life along the Yukon River 100 miles northwest of Fairbanks.
Another time, during a prolonged outage, friends in Fairbanks had to download and print residents’ emails and send them north by plane. Emails arrived slowly by mail, but still faster than a click. Today Woods-Orrison is a broadband specialist for both Native Movement and the Alaska Public Interest Research Group. With a focus on digital equity, she’s part of a statewide network laying the groundwork for how to spend a whopping $1.8 billion in new infrastructure dollars aimed at connecting every Alaskan to high-speed internet.
“Alaska will be a different state when this is done,” she says.
Alaska ranks last among U.S. states for internet access. The most service is in southeast and southcentral Alaska, and the least—which often means none— is in southwest and interior Alaska. But even where access is high, like in southeast Alaska, some rural communities go without. Urban residents can lack affordable access, too. Statewide, Alaska Native people are twice as likely as Caucasians to lack access, according to Broadband Now research.
Woods-Orrison says increased service in rural Alaska will bring cross-generational benefits that span health care, education, and business. For instance, for rural people, the access to telehealth that most Alaskans already enjoy can lessen the need for expensive flights to health care hubs in Fairbanks or Anchorage. It can improve preventative care for youths, help adults plan for their later years, and potentially allow more Elders to age at home.
On the economic front, says Woods-Orrison, internet access can diversify village economies, uplift rural artists, and improve access to education in villages struggling to retain teachers, all while saving time, money, and carbon emissions. She hopes it can slow the outmigration plaguing rural Alaska.
Implementing the program, which occurs under the U.S. Department of Agriculture, will take time. Statewide surveys are underway to identify areas most in need, which will inform site-specific plans that Woods-Orrison says will be driven by rural and village voices. But she says the “once-in-a-lifetime opportunity” must be approached with care.
“We’re going to need to have some very real conversations,” she says, explaining that internet access also carries risks of online addiction, fraud, child endangerment, and a possible worsening of violence against Indigenous women and girls. She wants to see digital literacy programs help rural residents manage the risks.
Opening the tap
Brian Lefferts welled up with emotion when the infrastructure bill passed, knowing it would bring piped water to thousands of households in dozens of villages. As public health director at the Yukon-Kuskokwim Health Corporation in Bethel, he knew it meant transformational change.
“Everyone knows someone who has become sick or been hospitalized,” he says, referring to the high rates of skin and respiratory infections, including pneumonia, that accompany a lack of plumbing. Long- term impacts can range from tooth decay to asthma. Piped water, he says, can prevent 4,500 outpatient visits and 26 deaths every year in rural Alaska, where most people are Alaska Native.
Lefferts, who has worked in Y-K public health for 18 years, explains that most illnesses result from reusing water at home. When water is not available at the tap, he says, people tend to ration for drinking and cooking. As a result, Alaskans without plumbing use as little as four gallons per person per day, far below the World Health Organization’s recommended minimum of 13 gallons—and just a fraction of the 90 gallons average Alaskans use.
Over 3,300 Alaskan households lack adequate water, with roughly 1,800 in the Y-K region. Root causes include exorbitant building costs, a short construction season, and extensive permafrost that prevents creating typical water and sewer systems. Climate change exacerbates problems by thawing permafrost, which mobilizes soils, and bringing extreme weather like the 2022 Typhoon Merbok, which swamped freshwater lagoons with saltwater.
Without plumbing, many people still use “honey buckets”—five-gallon buckets fitted with toilet seats and lined with plastic bags—for human waste, which is collected and brought to dump sites. Freshwater is delivered or self-hauled from community sources, often by four-wheeler or snowmachine. In some places, running water is only available at schools or community washaterias. Most of the options are costly in time and money.
Along with health benefits, Lefferts says piped water will alleviate hardship. For instance, even minor illnesses not represented in statistics cause missed school or work. But when medical help is needed, family escorts also miss school or work and may require daycare. The strain rises when severe illnesses—which affect children and Elders the most—require costly out-of-region care. Lefferts sees the worry, stress, expense, and even stigma all this puts on families and communities.
Like broadband, change will take time. The infrastructure bill requires that locally informed design proposals reach the Indian Health Service within five years, but construction may take longer.
“We don’t want to overpromise,” says Lefferts about the timeline. “But any way you look at it, we’ve never seen [investment] like this. It’s just incredible and we’re grateful.”
A lifeline for ferries
“Hope is on the horizon,” says a cheerful Robert Venables, executive director of the Southeast Conference, the economic development organization for southeast Alaska. He’s referring to the $286 million the infrastructure bill floats to Alaska’s beleaguered ferry system.
Venables, who has promoted the ferries in various roles for over two decades, calls the system an “absolute lifeline” for southeast Alaskan commerce, connectivity, medical needs, and much more. It even carries high school speech and sports teams to meets in far-flung communities. But the system has foundered for years from an aging fleet, state budget cuts, and staffing shortages.
Venables says this perfect storm has corroded reliability. No communities are unaffected, with reduced or canceled service that hikes up costs for residents and essential businesses such as commercial fishing. The infrastructure funding, administered by the Department of Transportation, will purchase a long-sought ferry for the open ocean routes between Homer, Kodiak, and the Aleutians. It replaces the 296-foot Tustumena, built in 1964 and now known alternately as the “trusty” or the “rusty” Tusty, depending on its operational status.
The funds will also purchase a smaller ferry for one of Southeast’s shorter shuttle routes. Reflecting Biden administration climate goals baked into the infrastructure bill, it will be an electric or hybrid ship like those used in the state of Washington. Venables hopes it’s the first of many.
More than just new boats, the funding will also upgrade docks, modernize existing ships, and bolster operational costs, which Venables says can improve the system’s ability to thoughtfully plan.
The help carries the imprint of Senator Lisa Murkowski, one of a bipartisan group of 10 senators who negotiated the infrastructure bill. Murkowski ensured the law’s language on ferries was custom fit for Alaska. In August 2023, she and U.S. Transportation Secretary Pete Buttigieg touted the bipartisan bill as they commuted together by ferry from Juneau to Haines.
Venables says the changes will take time and entail their own challenges, including finalizing a hefty state funding match and finding U.S. shipyards that can do the work or supply the parts for the new ships, a requirement of the law. Already, Murkowski and others have expressed frustration about delays in progress.
Across Alaska, the law also provides transportation funds for airports, highways, hybrid school buses, EV charging stations, new road culverts to help salmon, and port improvements for Nome and Anchorage.
A grid for tomorrow
In 2019, the Swan Lake wildfire took out the sole line carrying power from Bradley Lake near Homer, the state’s largest hydroelectric facility, to the nearly 80 percent of Alaskans who live along the Railbelt. The four-month outage cost ratepayers from Anchorage to Fairbanks an estimated $10 million in more expensive natural gas. It also highlighted the age and growing vulnerability of Southcentral’s electrical grid, something that $206 million from the infrastructure bill will now help fix.
“We have not seen this amount of funding in our lifetime,” says Curtis Thayer, executive director of the Alaska Energy Authority. AEA won the federal grant, which now requires a state match.
The money will pay for an undersea cable from the Kenai Peninsula to Chugach Electric’s power plant at Beluga, on the west side of Cook Inlet. Thayer says it will provide essential redundancy for a grid that serves thousands of businesses and five strategic military bases. The funding will also help upgrade poles and other outdated infrastructure from the Kenai to Fairbanks and install new battery banks in Anchorage and Fairbanks.
While it builds resilience, Thayer says the investment can also spur more solar, wind, hydro, and tidal power at a time when Railbelt customers face a projected shortage of Cook Inlet gas. Recent research from the National Renewable Energy Lab indicates such investment would substantially cushion Railbelt customers from expected rate hikes. Thayer says the grid’s current capacity limits renewable investment. The grid, which covers over 700 miles, relies on 80-percent fossil energy today.
Thayer also sees the tax credits and incentives in the 2022 Inflation Reduction Act as “changing the game” for renewables. The availability of incentives to tribal and nonprofit utilities, common across Alaska, creates new opportunities and can shield ratepayers from development costs, ultimately making projects possible.
Both laws, says Thayer, vastly increased AEA’s budget and led to “new and effective” partnerships that leverage tens of millions of additional dollars for solar, heat pumps, home energy rebates, and efficiency upgrades, with direct and indirect benefits statewide.
Additionally, in March the Department of Energy announced funding for renewables and grid upgrades in five rural Alaska regions where exorbitant energy costs impact every aspect of life. The projects include solar, heat pumps, battery storage, and hydro development that will benefit dozens of communities from Southeast to the Arctic.
“Many of Alaska’s rural communities are not energy secure,” says Joselyn Fenton, director of programs at the Denali Commission. She explains that rural communities often rely on diesel to feed aging energy grids that lack redundancies. The catastrophic loss of land to thawing and erosion—called usteq in Yup’ik—also stresses energy systems, she says.
The Denali Commission is intricately involved in rural development throughout Alaska and will facilitate projects supported by both federal laws. Fenton also calls the funding unprecedented. She says the investments in broadband, water, energy, and transportation will help rural Alaskans attain comforts other Alaskans have enjoyed for decades.
A team effort
This is just a sampling of projects the two laws will bring. Many others will address the climate impacts Alaskans have already faced for a full generation. For instance, the southwestern villages of Newtok and Napakiak, which are endangered by flooding and thawing, will receive Interior Department relocation assistance, while Army Corps of Engineers funding will support statewide flood mitigation and infrastructure resilience. It’s welcome in a rapidly warming state where in the last decade three extreme weather events caused $750 million in damages. There’s also funding to restore salmon runs, clean beaches impacted by ocean plastics, and more.
Some projects leverage funding from both laws. Some receive additional support from the Denali Commission and other entities or require state matches. And believe it or not, bipartisanship is a theme, as evidenced by Murkowski and Buttigieg riding the ferry together.
“It’s really a team effort,” says Thayer of AEA. He and others describe an all-hands effort where state, federal, and non-governmental groups are working together.
The cooperation is worth noting in a state where independence from the feds is a popular political narrative and where 36 percent of survey respondents recently favored seceding from the union.
But cooperation will be necessary. Alaska remains a remote state with expensive delivery and construction costs, which along with potential workforce shortages could constrain progress. Our reliance on outside help, as seen with the slow progress on ferries, will also bring unforeseen challenges. And even if all the projects succeed, Alaska will still face the realities of life in the North, including rural schools desperately in need of capital investment and the increasing disruptions from climate change, which will still require dozens of communities to relocate.
“This has the potential to be transformational,” Fenton says of the whole effort. “But only if we do it right. And that’s our goal, to make this long-lasting and sustainable.”
Tim Lydon is the assistant editor of Alaska magazine.
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