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An advisory question means the voters are stating whether they support a project, not whether the project will or will not take place. In other words, the bonds will be issued regardless of how the vote turns out.
But city finance director Dave Wolff says if Sitkans approve the measure, it will give lenders confidence.
“That means lower interest rates, which means less debt service,” he said. “Less debt service means rates will not have to go up. It may have to go up a little bit but not substantial. If we don’t get the vote when I talked to them, they’re saying it may cost us up another half a percent of interest. That’s $250,000 a year.”
The project at Blue Lake will raise the dam 83 feet and add a new powerhouse and three new turbines there. It also will add a new turbine at the utility’s site near the Blue Lake campground, and make other repairs.
Doing so will help expand the capacity of the city’s hydropower. More hydro capacity means it’s less likely the city will need to run expensive diesel generators. But utility director Chris Brewton said during the on-air forum that Sitka keeps coming close to its maximum capacity.
And Brewton says economic development is being delayed because Sitka doesn’t have the capacity.
“We’re dumping hundreds of thousands of pounds of fish waste into the Eastern Channel because we have no way to process that,” Brewton said. “There are several processors out there that would like to look at that, but we can’t offer them firm electrical service, so their project is not economical. Another example is that a lot of the buildings in town would like to convert from their oil boilers to electric boilers. We can’t offer them that now because we don’t have the capacity. So with adequate hydro we could fill all those needs and all the benefits that come with it to our community.”
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