Water from Crystal Lake is drained through a penstock to a powerhouse at Blind Slough. (Joe Viechnicki/KFSK)

Petersburg’s borough assembly Monday approved the first reading of a ballot question on bonding for Petersburg’s electrical system. The measure would be one of two to appear on the October 5th ballot and could shore up both hydro and diesel power generation for electrical customers on the island.

The 7.8 million dollar bond would pay for an overhaul and upgrades at the borough’s hydroelectric power plant at Blind Slough, on southern Mitkof Island. Overall that’s expected to cost around nine million dollars. Utility director Karl Hagerman explained the work will keep the power plant running as Petersburg’s cheapest source of electricity.

“The project is a large project but it is very much needed so that we can refurbish that facility and continue to get low cost hydro power out of that for many years,” he said.

The hydroelectric plant at Blind Slough was installed by the city of Petersburg a century ago. Much of the existing equipment dates back to the 1950s. The borough hopes to replace much of that, the generator and turbine along with control systems. Those were recommendations of a consulting company that looked at the facility in 2019.

The bond issue would also pay for additional diesel generation capacity. The community runs on diesels when hydro power is not available. Hagerman explained peak demand during the winter is nearing the limit of those generators.

“We’re within about five percent of our standby capacity which is cutting it a little but too close if we have a really cold wintertime and we have an outage at (the Southeast Alaska Power Agency) it’s going to be very difficult to restore power and then even if we get it restored any blips in the system have the opportunity to trip off a generator.,” Hagerman explained. “If one goes down, they’re all going to go down. So it’s a very precarious position we don’t want to be in. I see both of these projects as being very important.”

He expects the utility would have to increase revenue nine and a half percent this year and the same amount next year to repay that debt. That will mean rate hikes for local electrical customers. Those would also cover the cost of an expected boost in the cost of power from Petersburg’s main supplier, the Southeast Alaska Power Agency, or SEAPA.

Vice mayor Jeigh Stanton Gregor expressed his support for putting the issue to voters this fall and thought the investment in the local electrical system made financial sense.

“Also investing in that generator and reupping with Blind Slough it also provides energy security aside from the SEAPA system, obviously that’s our core but energy security especially in those colder months is important to all of us in the borough so I’ll definitely be voting yes,” Stanton Gregor said.

The vote was 5-0 to approve an ordinance in its first reading putting that question to voters. Mayor Mark Jensen and assembly member Taylor Norheim were not at the meeting.

It was also a unanimous vote to hire Anchorage consulting firm Electric Power Systems for $31,163. That company will study the community’s need for backup diesel power.