Unalaska, AK – The city sold $25 million in bonds yesterday at 5.46 percent interest to pay for the construction of the new powerhouse. City Manager Chris Hladick said the sale was just good luck--a month ago the bond market was very uncertain and the city was told interest rates might be as high as 8 percent. Had the city sold at an 8 percent interest rate, total payments would have been $15.24 million dollars higher over the 30-year payback period. To avoid that, the city developed a plan to loan itself the money. That plan is no longer necessary.

Hladick said city employees are glad the project is back on track. "It is the basis for economic infrastructure for the community."

They city hired SKW Eskimos construction company to build the new facility next to the old powerhouse. They should start work on the 18-month project in April or May and complete it by June 2010. They will be hiring locally.

The powerhouse project began in 1998 when the city began looking at ways to solve the energy production capacity problems. Building a new, more efficient diesel power plant was considered the best option. Along the way they encountered large numbers of PCBs in the area of the new plant. It cost the city $4 million to remove the contaminants left by the U.S. government during World War II. Hladick said the city is considering suing the government to get their money back because the federal government says they are not responsible for the pollutants.

"They are," explained Hladick, "because we found them at 14 feet deep in the ground. PCBs are not supposed to travel in soil so the only way you could get PCBs to the depth of 14 feet is to have turned them over and disturbed the soil and we have not dug to 14 feet at that powerhouse site."

The City Council will discuss the issue during a February meeting.

The sale of the powerhouse bonds are not linked to the sale of the school repair bonds. Those will be sold by the state. If you are interested in the powerhouse construction jobs, contact city hall for more information.