The City of Unalaska is pulling out of the Makushin geothermal project after the city council on Tuesday rejected new terms requested by the company building the project. The project’s goal was to harness energy from an active volcano to power the community, which has relied on diesel since World War II.
It was the fourth time that the joint venture between the Ounalashka Corp. and Chena Power, called OCCP, asked to amend its terms for the roughly $200 million project. This time they wanted to raise the rate they would charge the city for electricity.
City Manager Bil Homka said in a memo last week that he encouraged the council not to agree to the rate hike and to let the power purchase agreement expire.
While council members all voiced general support for the project, the consensus was that they had lost confidence that the project would be completed on a reasonable timeline.
“I’ve been in full support of this and I want to see this thing go through, but at the same time, we’ve done more than enough,” said Councilmember Alejandro “Bong” Tungul. “We’ve done three resolution amendments to extend it, and I still don’t see anything that will get it moved forward.”
Representatives of the project pushed back against some of the claims made in the council packet, including that the project would be unable to secure funding.
“We acknowledge the frustration that all parties have and are experiencing due to the project delivery timelines,” said program manager Dave Mathhews in a memo to city council. “OCCP does have financing and is proceeding with project development.”
Local resident Travis Swangel was among several community members who spoke out in favor of the geothermal project. He called the project “one of the most important and pivotal projects in the community’s history” and urged the city to be patient.
Councilmember Shari Coleman made a request to the city to allow a six-month extension for the geothermal project to find funding, but she was unable to find support and the motion was denied, effectively ending the city’s participation in the project.
