Makushin Volcano Could Provide Energy To Unalaska — If City Agrees To Buy From OC/Chena Power

Nov 27, 2019

Ounalashka/Chena Power, LLC is pursuing a U.S. Department of Energy loan worth $350-$500 million. The company plans to develop geothermal energy at Makushin Volcano (pictured).
Credit Hope McKenney/KUCB

After decades of false starts, geothermal power may be coming to Unalaska.

The Ounalashka Corporation and Fairbanks-based Chena Power, LLC have formed a company to develop a geothermal project at Makushin Volcano.

At a City Council meeting on Tuesday, Corporation CEO Chris Salts said the company's goal is to reduce the city's consumption of 200,000 gallons of fuel each month, as well as lower and stabilize utility costs for residents and businesses.

"We don't intend to replace the city's utility. We just want to supply power to it," said Salts. "We plan to eliminate the city's reliance on fossil fuels to generate electricity and heat."

This attempt at geothermal energy marks the latest effort in a long history of companies trying to develop the resource about 14 miles from Unalaska's current power grid. For three decades, the plans of private developers have fallen through, largely due to high start-up costs. The last attempt was abandoned in 2015.

City Manager Erin Reinders said the city supports the new project. The City Council has also identified alternative energy as one of its federal lobbying priorities.

"The city continues to look for support with reliable and cost-effective alternate energy sources for the community, including geothermal and wind," said Reinders.

With city backing, Ounalashka/Chena Power is pursuing a U.S. Department of Energy loan worth $350-500 million.

Salts said that funding would allow the project to move forward at no expense or risk to the city. He also said the company will use existing research performed at Makushin over the last 60 years, meaning further feasibility investigations aren't necessary.

A test well drilled in the 1980s revealed a hot-water reservoir that could generate at least 12 megawatts of electricity, or enough to heat around 10,000 homes.

Steam issues from a geothermal test well drilled at Makushin Volcano in the 1980s.
Credit Kiiguusi Suuluta Land Company

Salts said leaders of the new company will attend the City Council's meeting on Jan. 14. That's when they'll ask the city to sign a formal power purchase agreement (PPA) — a deal that would have the city agree to buy geothermal energy from their operation.

"Once we do have a PPA in place, I think it's important to point out when we might be enjoying this diesel-free and clean energy," said Salts. "We would target commercial operations to commence before the end of 2022, if everything works out well."

The company will present more information on its proposal, including its costs and technical aspects, at the upcoming meeting. Salts said he's hoping to win a city agreement by the end of January.