AP&T announces cost escalation on 5-MW Hiilangaay hydropower project

Alaska Power & Telephone Company (AP&T) has announced that its 2019 results will include a pretax charge of about $10.5 million to $11.5 million, or $8.30 to $9.10 per share, for estimated cost increases on the 5-MW Hiilangaay Hydropower Project.

The company says the project has “experienced a number of construction challenges” since it began in 2016. Field conditions and design changes have resulted in significant cost overruns above the original project cost estimates. The additional costs are primarily related to the penstock, diversion structure, powerhouse and site mobilization.

Costs to complete the project in 2020 are estimated to be in the range of $5.5 million to $6.5 million, and such costs to complete the project are included in the above-identified charge.

The Hiilangaay project (formerly called Reynolds Creek) is located on Prince of Wales Island. The project includes a 28-foot-long, 6-foot-tall diversion structure, a 3,200-foot-long penstock, a 5-MW powerhouse and a 12-mile transmission line.

According to a press release, AP&T is conducting a further review of the project to determine if there are any additional impacts. AP&T is in the process of preparing its 2019 financial statement and expects that its other business lines will perform as planned.

AP&T provides energy and communication services to 40 communities from the Arctic Circle to the southernmost tip of southeast Alaska. The company owns and operates seven hydroelectric facilities: 4.5-MW Black Bear Lake, 943-kW Dewey Lakes, 4-MW Goat Lake, 3-MW Kasidaya Creek, 250-kW Lutak, 2-MW South Fork and 800-kW Falls Creek.

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