SEAPA workshop discusses possible TBPA takeover

The City and Borough of Wrangell held a workshop on Monday, Nov. 5 to deal with a number of issues related to the Southeast Alaska Power Agency, Thomas Bay Power Authority, and a report by an engineering and consultancy group that is recommending a change in the way Tyee Lake’s hydropower facility, among others, is operated.

A report by D. Hittle and Associates, which was commissioned by SEAPA, is calling for the cancellation of the partnership agreement between TBPA and SEAPA for the operation of Tyee Lake Hydroelectric Plant – and will reportedly see a $461,500 reduction in costs with the dismissal of four plant operators.

The report is also advocating a pair of operational and management plans. The first would see a modified SEAPA structure with the agency providing O&M. The second would keep SEAPA’s 5-employee structure intact, but would utilize a single contractor for the Tyee plant and Ketchikan Public Utilities.

After a historical presentation of the development of the project, TBPA chief Paul Southland outlined pointed that he feels the agency is at risk.

“Today, as we look at this O&M review, Thomas Bay is at risk,” Southland said. “Tyee was initially operated by the State of Alaska. Thomas Bay took over the Tyee operation shortly afterward and the reason was exactly the same thing being mentioned in this O&M study. Two years into the operation by the state, in each of those years, costs approached $2 million.”

Southland also pointed out that SEAPA is anticipating, should their board adopt the study and its recommendations, that the final year of TBPA’s involvement in Tyee would begin in July 2013, with the finalization of the plan coming in July 2014.

SEAPA CEO Trey Acteson, during the meeting, said that dismissal of employees would not be the focus, but rather cost savings would be made through attrition.

“With respect to SEAPA power and reliability, in relation to the proposed manpower reduction, first of all, we haven’t decided yet that there is going to be a manpower reduction,” Acteson said. “We haven’t decided if there is going to be one person out on site. That’s yet to be fully determined. As far as access to SEAPA power and reliability, SEAPA has undergone and undertaken several very impactful projects that have increased reliability.”

That is an assertion Southland disagrees with – and he said he fears the loss of local Wrangell jobs if the O&M plan changes.

“To get to the $461,000 savings recommended, you have to eliminate employees,” Southland added. “It may be over time but you’re still eliminating employees. If the report is adopted as written with single roving operators, the odds are all the current Wrangell positions will be eliminated, and that equals about $550,000 in lost wages to the community.”

Acteson also added that SEAPA’s outlook is for the long-term.

“We’re a regional entity with a long-view approach and our number one goal here is to look out for our ratepayers,” Acteson added.

Ketchikan Public Utilities board member and SEAPA alternate voting member Andy Donato also brought up the issue of SEAPA’s small size – and whether they can handle the issues associated with electrical generation failures.

“The problem with the SEAPA organization is that they are small,” Donato said. “I think they’re brilliant. I think they’re gifted. But to throw the baby out with the bathwater and think they are going to do this in a year’s time and develop the plan, I think is not a good one.”

Donato also challenged whether a single attendant would actually save money should a power outage at the plant occur.

“In the report, it is suggested to a have a single attendant on the weekend for cost savings,” Donato added. “Is that prudent? And are the cost savings there if I lose generation for any appreciable amount of time?”

Borough Assemblyman James Stough made a pointed statement regarding his involvement in the formation of the agency after divestiture of the four-dam pool in 2009.

“I have read the report and listened to the presentations of SEAPA,” Stough said. “I come from the perspective that it was my vote that made SEAPA. Without my vote, and turning and having a re-vote, you wouldn’t have SEAPA. I come from the fact that we, at that time, were assured that we’d keep Thomas Bay as part of the group that runs that up there, due to their experience and due to their expertise and their history.”

Stough then explained his reasons for supporting the current staffing levels at Tyee.

“I see this going down a road where this report comes back as a fact of supporting the idea of a single operator, and I have a problem with that. Part of the problem is the way I see the operation being run,” then adding, “I want to make sure that our communities keep these people in place. That’s why I voted for that. I want that to continue. I think Ketchikan does a damn good job over there, and I think that Wrangell has done their community a good service. Thomas Bay Power Authority has served Petersburg and Wrangell very well and I think we have competent people out there to run that.”

Wrangell resident Kip Valvoda, who worked in the power industry prior to moving to Alaska, commented that having a single operator was a dangerous proposition.

“It’s not a good idea, and it’s also against OSHA regulations,” Valvoda said. “It’s also against the IBEW contract, so you’re putting someone at risk.”

Mayor Don McConachie, who chaired the workshop, also raised the issue of whether Tyee employees, who are currently covered under the Alaska PERS system would continue under that plan if SEAPA takes over operations of the plant.

“There is a really large deficit in the PERS system and it has been required by the state, even after a person is laid off, we as a community have to pay for that person into that PERS retirement program,” McConachie said.

“SEAPA has looking at that issue,” Acteson said. “Our (controller) has looked, and it appears, from what we can see, SEAPA can adopt PERS as one of the classes for our employees.”

After the meeting ended, Southland said the proposal would result, ultimately, in an unaccountable agency controlling the power system in Wrangell and Petersburg.

“We’re talking about an organizational setup right now that answers to 33 elected officials across Southeast Alaska,” Southland said after the meeting. “If we go to a single operator setup, the organizational oversight will not be accountable to anyone except the SEAPA board and its CEO.”

Acteson, when asked how SEAPA, as a 5-person organization, could handle the power system if the O&M is changed, said he felt the agency would be able and ready to do so.

“I think we have the experience to handle it,” Acteson said. “We have 60-70 years of experience on our team and we have the background. I have rewritten and participated in agreements to merge and take over contracts, so I have the experience to handle these contracts and make it successful.”

The next workshop meeting will be held today in Ketchikan starting at 7 p.m. at the City Hall chambers.