Discussion of a possible divestiture of Wrangell from the Southeast Alaska Power Agency by 2015 eclipsed a rescission and new vote on a motion by the Borough Assembly related to operations at the Tyee hydroelectric plant on Friday, Nov. 30.
The meeting was called after the Assembly passed a motion in error on Tuesday, Nov. 27 that originally called for a letter of non-support to be issued against a report by D. Hittle and Associates – a report which calls for the operations and management of Tyee and the Swan Lake facilities to be governed under a single operator by 2014.
After rescinding the original motion, the Assembly, with members Pam McCloskey and Wilma Stokes absent, clarified and passed a new motion instructing representatives to the SEAPA Board of Directors to enforce the standing Power Sales Agreement between the agency and the communities of Wrangell and Petersburg.
The motion, which passed unanimously, also states that the SEAPA representatives must, “recognize that Petersburg and Wrangell share equally 100 percent of the operating capacity of Tyee Hydro and also that the Operations and Maintenance Agreement be reviewed and consolidated under one operator with cooperation and approval of the three municipal owners (City of Ketchikan, City of Petersburg, and the City and Borough of Wrangell.)”
Ernie Christian addressed the Assembly during the public comment portion of the meeting and stated that he felt SEAPA was not cost effective for the city or customers, due in part to high salaries and operating expenses.
“The CEO gets over $200,000 and they get bonuses each year,” Christian said. “To me, SEAPA is not a cost saving entity to the City and Borough of Wrangell or to the ratepayers, which we all pay (and) SEAPA has over $17 million in reserves in the bank (so) it seems to me like they’re overcharging. How is this going to save us all money? That’s the bottom line because the ratepayers are the ones paying SEAPA.”
After the motion was read, Assembly member Bill Privett was the first to speak up during discussion – and was the first to mention leaving SEAPA as a way of ensuring Wrangell’s financial stake in the two-dam pool.
“I think divestiture of the SEAPA process is something that should be on the table,” Privett stated after thanking Christian for his comments. “No different than divestiture of the four-dam pool. The second that the thing was signed everybody looked at each other, now we just have to wait for the day when we can all say goodbye to each other. So, I think that’s probably a realistic thing.
Privett then added that Wrangell needs to get paid back for anything it has already put into the project should SEAPA seek to grow in its size and scope in Southeast Alaska.
“Somehow, the state is looking at SEAPA in a way of becoming an energy regulator, et cetera,” he added. “I guess I don’t have a problem with that at SEAPA if we move in that direction, but we need to be paid for that, because we’re paying for that. I don’t know that that’s fair. If the state wants us to go out and develop projects for their citizens, our ratepayers should not be held accountable and held hostage in that process.”
Agreeing with Christian again, Privett said the administration of SEAPA was “top-heavy,” in his mind, and that the lion’s share of work was not being done by the agency but by the contractors on the ground. He also pointed out what he felt was the proper chain of command in terms of the dealings between the agency and municipal government.
“One reason it’s top-heavy is because the O&M, for the majority, is being done by KPU and Thomas Bay,” Privett said, adding, “I think that, in many regards, that somehow SEAPA has evolved into a position where they forget that they are basically employees of the City of Ketchikan, the City and Borough of Wrangell, and the City of Petersburg.”
Privett then reiterated his call to look at splitting from SEAPA.
“I think it should be looked at, as Mr. Christian implied, that if there is a time frame that’s out there, the divestiture is a serious consideration,” he said.
Concurring with Privett’s motion, Assembly member James Stough then added that he was supportive of a possible departure date from SEAPA that could become available in 2015.
“I feel we need to keep our options on the table,” Stough said. “Bill is right. I think we should keep the option open of looking at that 2015 date and talk about it, because if we’re going to do it, at least be open about seeing what the options are. I think that was the goal of all these communities to own their own operations.”
Although representatives from SEAPA were listening in during the meeting via teleconference, they made no statement during the public comment or discussion portions of the agenda.
Thomas Bay Power Authority was formed in 1975 and Tyee, along with Swan, were later part of a four-dam pool along with Terror Lake and Solomon Gulch until 2009 when the two latter members were sold to individual utilities in Kodiak and Copper Valley, respectively.
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