Note: The opinions expressed in commentary on KCAW are those of the author, and are not necessarily shared by the station’s board, staff, or volunteers.
By Mim McConnell
At the start of the 21st century Sitka was running out of power, affecting the ability to diversify and develop our economy. Using +/- $100/barrel, environmentally harmful diesel fuel with our antiquated generators was not a good option for increasing electric generation. The best solution was Phase 3 of raising the height of Blue Lake Dam.
Preliminary engineering in 2007 estimated the project would cost around $50 million. By the time design development was done in 2008, the cost had increased to $100 million. The state committed to funding 50%. In 2011, $11 million in contracts were awarded for custom fabrication and the crane. In late 2012, general construction bid costs came in at $145 million, which was shockingly higher than engineers had estimated in 2008.
The city staff and Assembly were suddenly faced with a difficult decision. There were three options presented: cancel, re-bid, or proceed. On 9/11/2012, they voted to proceed, knowing electricity rates were projected to rise to 15.8 cents per kWh. This decision was based on having already invested a substantial sum, the need for increased electric generation, and with a commitment to try to secure additional funding from the state and federal governments.
The years that followed brought staff and the mayor in front of legislators, governors, and our congressional delegation, looking for help. Some additional help from the state came but they could no longer commit to the 50%, and so three additional low-rated bonds were issued to pay for completion of the dam, refinancing Green Lake (in our favor), and paying the balance on the turbine. The four electric revenue bond issues totaled just over $126 million.
In spite of the rate increases, Sitka still has affordable power when compared to other communities around the state, and even the Lower 48. When oil prices once again go over $100, and additional local institutions convert to interruptible power, more electricity will be used and rates will go down.
It’s important to keep in mind that Sitka has an infrastructure that is equivalent to a city of 100,000 in the Lower 48. There are no regional utilities to share expenses; Sitka has to supply everything. With the hydroelectric project complete, we now have a reliable, 100% clean, affordable electric system that is almost unheard of both in Alaska and the Lower 48.
The Assembly and community will always be making difficult choices. Assembly members are elected to represent the community, and to do their best in making wise, educated, discerning decisions. Staff members are grilled, debate at the table can be heated as differing opinions are voiced, and finally, those difficult decisions are made. This is what a working democracy looks like.
Mim McConnell is a former assembly member and mayor of Sitka.