Grants earmarked for electricity at port, pass

MAT-SU -- Electricity may be turned on as early as next summer at the Valley's two largest economic-development projects, Hatcher Pass and Port MacKenzie.

In what many assembly members called a confusing jumble, the assembly in the same ordinance appropriated two grants from the Department of Community and Economic Development. The grants totaled nearly $500,000.

One grant, of $315,000, will fund the design and possibly some construction of electrical distribution at Port MacKenzie. The second grant, at $175,000, will go toward water and sewer distribution at Hatcher Pass. Its confusing nature aside, the money will fund two long-awaited projects on the north and south ends of the Valley.

The Port MacKenzie project will actually be done by Matanuska Electric Association, according to information from port project manager Marc Van Dongen, since the company will eventually take over maintenance of the lines.

"It will bring three-phase power . . . from the corner of Holstein down to the dock," Van Dongen said, a total of 10 1-2 miles. "That will probably last us eight to 10 years before it will have to be upgraded."

The distribution lines, Van Dongen said, at their maximum output will generate enough electricity to support 2,000 homes. In the future, Van Dongen said, the area will likely need a 25-kilovolt line, which would be operated by a co-generation plant -- a plant that operates off natural gas to generate electricity.

There are 123 parcels in the area, Van Dongen said, that will be able to tie into the electrical line to obtain power. In addition, Alaska Manufacturing Contractors, the one business currently operating at the port, will be put on the power grid -- at the same time their generators will be reaching the end of their suggested life.

"They've been operating off generators for about a year and a half," Van Dongen said. "The timing will be really good for them."

The $315,000, Van Dongen said, will likely cover the design cost and a portion of the cost of materials. Design, he said, will likely be completed by February. At that time, the assembly will likely see a request for additional appropriations that will fund the full cost of materials and construction -- an estimated $1.5 million, Van Dongen said. The project itself will likely be finished by June.

Running electricity to the port will knock out one of the key obstacles to further development at the port. Electric and gas utilities, a ferry landing at the port and in Anchorage, and pavement on the last 14 miles of Point MacKenzie Road, Van Dongen said, are the main reason there currently isn't more development at the port.

"I've talked, personally, to over 30 companies in the last three months," Van Dongen said. "If we had those three things, I think we would get a majority of them."

Electrical design work will be going on at Hatcher Pass at the same time, with the $175,000 DCED grant, said borough manager John Duffy, and electricity should be ready to use in June.

The money allocated for Hatcher Pass is only part of what's available, Duffy said. The assembly approved $100,000 for the engineering and design of electricity, and the remaining money will be spent on wells.

"What we'd like to do is to identify the quantity and depth for potable water, and to see if there is potable water there," Duffy said.

One of the wells will be drilled farther up the mountain, in order to accommodate snow-making facilities, Duffy said.

At Tuesday's meeting, assembly member Talis Colberg expressed concern that putting in electricity and water before wooing private developers to begin building a ski area would lessen the borough's leverage in the project.

"Really, it takes away some of our bargaining position," Colberg said. "It starts to become an argument for 'Well, it's all there, why don't we build a borough ski resort?'"

But some assembly members disagreed.

"If I was looking at the concept of developing at Hatcher Pass and I knew the infrastructure was going to be in place without me asking for it, I don't find . . . that money poorly spent at all," said assembly member Dan Kelly. "Having provided that infrastructure, we're also helping people who live in that area and above. The intent of the borough is to see that land is properly developed."

Duffy said Talis was right, the borough does need a bargaining position, but he believes the borough still has ample leverage.

"I would agree with Talis -- we will need something to bargain with, and that's the borough land," Duffy said, referring to the land on the south end of the Hatcher Pass land lease. That land, according to the Hatcher Pass Management Plan, can only be developed after the ski area is under way. "I think that is the true bargaining chip."