Unalaska Weighs Whether To Commit To 30-Year Geothermal Deal With OC/Chena Power

Feb 5, 2020

OC/Chena Power officials have said their goal is to develop the geothermal potential at Makushin Volcano, reduce the city’s fuel consumption, and improve utility costs for Unalaska’s residents and businesses.
Credit Courtesy Malcolm Herstand / Alaska Volcano Observatory

A private company looking to develop geothermal energy at Makushin Volcano wants the City of Unalaska to commit to a 30-year power deal by the end of the month.

At a special meeting last week, the City Council heard an update from consultant Mike Hubbard on the energy project proposed by OC/Chena Power.

"The powerhouse would be at the site of the wells, and electric power would be brought to the city," said Hubbard. "It would be brought down the flank of the mountain, down along the valley, and via a submarine cable over here and tie in to the city grid."

Company officials have said their goal is to reduce the city's fuel consumption and improve utility costs for Unalaska's residents and businesses.  

But councilors said they still don't have enough information to sign on to the decades-long power purchase agreement, especially as OC/Chena Power has yet to make a formal presentation to council.  

Vice Mayor Dennis Robinson said he wouldn't vote in favor of the project right now, but he ultimately hopes it'll move forward.

"Sitting here as a council member, I would probably say 'no,'" said Robinson. "There's some more work that needs to be done on this one."

High up on the list of concerns is how much risk the city will be taking on and how much it will cost both the city and the consumer.

Rates will depend on how many kilowatt-hours the city commits to purchasing. They could also change if local seafood processors sign on to the project, though most largely generate their own power.  

Of the three Unalaska residents who testified during public comments, two expressed reservations.

Matthew Scott asked councilors to weigh the financial risks before moving forward.

"I'll support anything that's green — wind power, hydro, anything — but I won't support it to the point where there won't be a community to live in," said Scott. "Heat pumps are great, all that stuff is great, but it still needs to pencil out."

City Manager Erin Reinders said representatives from OC/Chena Power — formed by the Ounalashka Corporation in Unalaska and Fairbanks-based Chena Power — will likely attend a council meeting in the coming weeks to provide a more detailed outline of their proposal.