Petersburg’s borough assembly Monday voted to approve the purchase of equipment upgrades for the borough’s hydro-electric plant at Blind Slough and to award repair work on the fire-damaged motor pool building.
An international company based in England called Gilkes Hydro submitted the lowest of five proposals to supply a new generator and other equipment for the plant that generates electricity from Crystal Lake on southern Mitkof Island. The borough will agree to purchase that equipment for just over two million dollars but could pull out of the agreement if the assembly or voters reject a future plan for funding the work.
Utility director Karl Hagerman explained that the proposal is good pricing on this equipment but the funding is not yet secured for the upgrades or the work to install them.
“So it was very important to tie in the equipment vendor into a long term agreement that allows the borough to back out of the agreement if the financing does not come together for that,” Hagerman said. “But we were successful in getting an agreement that will go out to October ’22 in the long-term and in that time period from now until October 2022 is when I’ll be working on that financing package to come together.”
The current plan is to bond for the project with that debt repaid by revenue from the electric utility and likely an increase in electrical rates. Local voters would have the final say on whether to move forward with that.
Assembly member Dave Kensinger was supportive of the purchase during a radio call in show Monday.
“We need to keep Crystal Lake going if we want to continue to have as low power rates as we do now, so yes we need to make this investment now and if we can get everything upgraded then it will continue to produce really low cost power for many years to come.”
The vote was 6-0 to award that contract to Gilkes Hydro with assembly member Taylor Norheim not at the meeting. It was also a unanimous vote to award a project to repair the motor pool shop building, damaged in a fire in August 2019. Petersburg company Rainforest Contracting wins that work for just over 1.1 million dollars, with most of that to be paid by the borough’s insurance.
“This low bidder is a local contractor and the nearest bid to that was like 400,000-450,000 dollars higher so it’s nice to have local work,” said Mayor Mark Jensen.
Two other companies also bid on that work.
The borough will pick up the cost of upgrading some parts of the building, like expanded tire sheds, concrete floor repair work and replacement stairs.