City: Abandon Whitman Lake hydro project

City of Ketchikan officials have recommended that the City Council abandon the long-planned Whitman Lake hydroelectric project, citing funding shortfalls as the primary concern.

The project has been on the city’s radar since 1997, when Whitman Lake was identified as the best opportunity for adding power to Ketchikan’s grid. After many years of consideration and planning, the city hired Hatch Associates for design work, and to provide a cost estimate.

That estimate was about 14-point-three-million dollars. When the city opened bids in June, however, the lowest bid, submitted by Ketchikan’s Dawson Construction, was $26-point-four million.

Since then, city officials have worked with representatives from Hatch and Dawson to reduce the scope of the project, in hopes of bringing it down to the approved budget.

In an Oct. 24^th memo to the Council, City Manager Karl Amylon said that even with the value engineering, the project remains $2-point-5 million over budget, with a likelihood of additional costs.

He said the city approached Southeast Alaska Power Agency officials as a potential partner in the project, but that agency won’t commit to it until after a review of the project and the next SEAPA board meeting in Mid-December.

In order to meet the March 16^th start-of-construction deadline required by the Federal Energy Regulatory Commission license, the city would have to finalize designs and submit them to FERC as soon as possible. Amylon said the city also would have to move forward soon with final contract negotiations with Dawson, and all that would cost the city money with no guarantees of help from SEAPA.

Based on those concerns, Amylon said it’s in the best interest of the city to cease work on the project and send the license back to FERC. He adds that the city might be able to use an $8.75 million state grant for the project for an upgrade at Swan Lake hydroelectric dam, instead. That upgrade would increase Swan Lake’s power capacity.

The Ketchikan City Council will consider the Whitman Lake issue at its regular meeting Thursday. The meeting starts at 7 p.m. in City Council chambers, with time for public comment at the beginning.