A $2.5 million grant to help the City of Ketchikan build the long-planned Whitman Lake hydroelectric dam is on the Ketchikan Gateway Borough Assembly agenda Monday.
The Assembly will talk about the proposed grant during a work session, which allows less formal discussion. After the work session, the Assembly might vote on the issue.
The city had considered abandoning the project because the cost of construction is over budget, even after reducing the scope. However, following public comment in favor of the project and a suggestion of possible financial assistance from the borough, the Ketchikan City Council agreed on Nov. 1st to continue work.
The city has $23.7 million to spend on the project, $15 million in voter-approved bonds and $8.7 million through a state grant. The cost reductions brought the total cost down to $26.2 million, leaving an approximately $2.5 million shortfall.
City Manager Karl Amylon prepared a comprehensive report on the project for the Assembly to review Monday. In it, he says the project still would have a capacity of 4.6 megawatts, but some of the cost reductions mean the annual power generation will be reduced about 22 percent.
Additional cost reductions might be possible, but Amylon says the city must move forward, at least for now, with the current plans because the project has a firm March 16 deadline for construction to begin. That deadline is established in the city’s federal license.
Under a power sales agreement between the city and the Southeast Alaska Power Agency, the city can’t use electricity from Whitman Lake if any power is available from SEAPA. That means Whitman might be a backup power source, to help offset the cost of diesel power generation.
Amylon also notes that there isn’t enough power available now to meet the needs of, for example, a new ore processing facility that could be built on Gravina Island.
Also on Monday, the Assembly will consider adopting an ordinance to appropriate state and federal grants for the borough’s transit and airport departments.
The Assembly meeting begins at 5:30 p.m. in Borough Assembly chambers. Public comment will be heard at the start of the meeting.