Acteson report: PR firm, Kake Intertie, staffing discussed

The Southeast Alaska Power Agency Board of Directors held their regular bi-monthly meeting in Wrangell on Tuesday and Wednesday, March 5-6 to discuss a number of items of both new and old business – and to announce the agency is working with a public relations firm to try to “foster a positive public image.”

In SEAPA CEO Trey Acteson’s report to the board, he outlined his plans for improving the image of the agency – and challenged that misinformation and inaccuracies are abundant in local media covering the organization.

“SEAPA is finalizing a professional services agreement with Full Circle Media Arts to assist in our ongoing efforts to enhance public knowledge of the agency, address an abundance of misinformation, and foster a positive public image,” Acteson wrote. “As you know, the Agency is under assault by a small group of people that have no obligation to speak the truth and their extreme views are provided a public forum without any boundaries.”

Acteson goes on to write that he believes Full Circle will assist the agency in its efforts by keeping tabs on local and regional media reporting on SEAPA actions.

“Full Circle will help us monitor a number of media outlets so we can more effectively respond to inaccuracies,” he continues in his report. “They will also provide production services, marketing materials development, and public outreach support as needed.”

Acteson then acknowledged a story from the Petersburg Pilot where he felt the agency received “favorable” coverage. Also noted was an article in the Ketchikan Daily News.

A trip to Juneau by Acteson for the Alaska Power Association “Manager’s Fly-in Conference” was also detailed in his report.

“While in Juneau, our lobbyist Ray Matiashowski was instrumental in scheduling time for SEAPA to meet with key legislators and regional decision makers,” Acteson wrote. “We maximized these opportunities by presenting our White Paper on the Swan Lake Reservoir Expansion and pitched it as our number one funding priority. We also introduced our upcoming Request for Offers (a.k.a. Call for Power) and explained the four options for proposing. There was very strong interest in this process and some folks requested periodic updates so they can follow our progress.”

Acteson then went on to state that SEAPA must maintain a strong lobbying position in the Legislature in order to meet the agency’s goals.

“There is a lot of pressure to reduce capital expenditures this year and funding is going to be very limited. This sentiment was echoed by most legislators I spoke with,” Acteson added in his report. “It is essential that we maintain a strong presence in Juneau to make sure our projects are considered for funding and also stay in the queue for subsequent years. One legislator bluntly told me that the general consensus on the hill is that Southeast Alaska has received a disproportionate amount of funding over the last few years and the focus is now on other regions. This is reflected in the restructuring of key positions on the house and senate finance committees.”

Acteson also outlined his goals for a “best practice” business model for the agency.

“SEAPA continues to make good progress in our efforts to implement ‘Best Practices,’ he stated. “Our foundational documents have been posted to our website and are available for download. These include our Bylaws, Joint Action Agency Agreement, and the Long-term Power Sales Agreement. SEAPA Board Packets and meeting agendas are also now available in advance for download by the general public.”

At the end of January, SEAPA finalized a “Request for Offers” of power in Southeast Alaska. Acteson reported that there were concerns by member utilities about the plan and its forecast of load projections.

“I want to take a moment to address a concern publicly voiced by some of our member utility representatives that our load projections are low,” Acteson wrote. “It is important to remember that our approach is deliberately conservative. We will adjust our projections as prudent over time, but current loads are actually below established modeling. Inflow history is extremely volatile and it would be unwise to commit to purchasing power if spill is anticipated. Additionally, potential mine loads are not yet confirmed and their duration of operation is uncertain. Demand side management may also play an important role in taming load growth as we bridge the gap to new hydro development. The RFO provides flexibility for adjustment if needed and there is nothing that prevents SEAPA from issuing another RFO down the road.”

The Kake-Petersburg Intertie project, and costs associated with a related environmental impact study, was also updated in Acteson’s report

“The KPI project is moving forward as described in the Memorandum of Understanding (MOU) between AEA, IPEC, and SEAPA, a copy of which was included in your September board packets,” Acteson reported to the board. “The second Steering Committee Meeting was held in Juneau on February 27, 2013. The Committee was brought current with project progress. The next meeting will be in approximately three months … In order for the work to move forward in accord with the MOU, SEAPA issued a task order in the amount of $437,573 to complete the EIS and other environmental permitting work.”

A possible road for the Kake project has put SEAPA in contact with the Federal Highway Administration and the Alaska Department of Transportation. According to Acteson, contractors on the project attended a public scoping meeting on Feb. 21 in Petersburg where an agreement to share data developed as a part of Tetra Tech’s EIS work will be made available in the spring or summer.

“The Federal Highway Administration has provided us the data from their LIDAR survey and aerial photos of the proposed routes,” Acteson wrote of the Kake road concept. “The ROD for the Kake Access project is scheduled for the winter of 2015. Later this year, we will start an RFP process to bring a design engineer on board. Our goal is to have the project ready for construction in the spring of 2015. It is important to highlight that this project still faces significant hurdles before it can be built. It will take considerable political support to secure the necessary 100 percent State funding for construction.”

According to Acteson, the Kake project must maintain operations and maintenance lifecycle costs low enough to be supported by Inside Passage Electric Cooperative’s rate base.

“SEAPA continues to hold a firm stance that this project cannot have any negative financial impact to our organization,” he added.

Alaska Power & Telephone’s recent analysis of SEAPA finances, which also recommended Wrangell, Petersburg and Ketchikan consider purchasing the Tyee and Swan Lake hydroelectric facilities respectively, was also addressed by Acteson.

“I met with our financial advisor Alan Dashan on February 15th and discussed our bond indenture and options with regard to call and redemption dates,” Acteson wrote. “I also questioned him with regard to the recent initiative of a small group calling for SEAPA to be dissolved. It is evident that this could be very costly to the member utilities due to the potential effect of negative arbitrage. I believe this is very important information that needs to be explained to the board by an expert. Although Mr. Dashan is unavailable for our March board meeting, I will schedule him to provide a presentation for the board at our next regular meeting once the date has been confirmed.”

Negative arbitrage is where municipal or general obligation bond holders lose equity in an investment when the money is reinvested and the debt issuer earns a rate or return that is lower than what must actually be paid back to the debt holders.

Acteson also expressed an interest in adding staff to his Ketchikan office in his report.

“It is time we start considering additional staff to meet the needs of the Agency,” Acteson stated. “SEAPA staff currently works well in excess of 40 hours per week. Late nights and weekends have become the norm, which will eventually impact employee retention. Although I am an advocate of maintaining a lean organization, there are core functions better served in-house instead of contracting professional services. It will also provide much needed depth to the organization as well as the added side benefit of boosting local jobs.”

Four specific areas Acteson states should be considered to enhance the organization would be in records management, grant administration, project management and technical support. Such a change in staffing could add “between 2-3 new employees,” according to his report.

In the next part of this report, details of the actions taken by SEAPA regarding its diesel protocol, public records requests, and approval of a possible mission statement for the agency will be presented.