The City of Ketchikan plans to scale back or even kill its long-planned Whitman Lake Hydroelectric Dam project after construction bids came in at least 12-million-dollars over the estimated cost.

The engineer’s estimate for Whitman was about $14.3 million. The lowest bid, submitted by Ketchikan’s Dawson Construction, was $26.4 million

City Manager Karl Amylon said that design engineering firm Hatch Associates blames the rising cost of steel and a redesigned access road. Hatch representatives worked with Dawson officials to find a way to reduce the cost.

Amylon said the revised plan would delete the larger of the two generators at the dam. Removing that unit also would eliminate the need for some related items, such as diverting the nearby Achilles Creek.

It also would reduce the dam’s power output. Originally Whitman was expected to add 4,600 kilowatts of capacity. That would drop to 700.

Amylon said he’s disappointed the full project won’t happen.

“We’ve been at this for a long time, and we thought we were on the verge of moving the project forward, and with the numbers that came in on the bids, I think everyone was taken aback,” he said.

He said the city has worked on the project for about 25 years.

“We definitely have several million dollars into the development of the license and the engineering of the project,” he said.

Amylon said if the city wants to move forward with the project, construction must begin by March 16, 2013, to comply with the Federal Energy Regulatory Commission license.

He says the smaller scope would require an emergency declaration by the Ketchikan City Council to allow an immediate redesign, for construction to start by deadline.

He said project changes would need FERC approval, as well as the OK from other federal and state agencies.

Amylon said the city instead could cut its losses and abandon the project, but that would be a difficult choice.

“This is particularly disappointing because we have a limit on our available hydroelectric resources that the community can take advantage of,” he said. W”hitman was the next logical step. I’m not really sure where we’re going to go from here.”

If the city kills the project, he said they should try transferring an $8.7-million state grant for Whitman to the Southeast Alaska Power Agency, to help expand capacity at Swan Lake Hydroelectric Dam.

SEAPA is a cooperative of Southeast utilities, and provides power to Ketchikan, Petersburg and Wrangell.

The Ketchikan City Council meets Thursday, and will decide then what to do about Whitman.