SEAPA board approves utilities rebates

Wrangell and Petersburg utilities can be expecting a rebate this year from Southeast Alaska Power Agency.

This summer the board approved a rebate of $1.5 million for member utilities. A formal award plan was presented at last week’s meeting in Ketchikan on Dec. 10, with $340,563 to go to Wrangell and $372,343 to Petersburg. The remaining $787,093 would be distributed to Ketchikan.

Voting alternate and electrical superintendent Clay Hammer represented Wrangell at the meeting, and he explained the rebate was possible in part because of funds unexpectedly freed up from other projects. For example, at staff’s recommendation SEAPA’s board formally decided to conclude geothermal exploration at Bell Island due to large upfront costs to pursue the project for the promise of a relatively low power yield.

The rebate is divided between member utilities based on the proportion of their demand for the past three years. So because Wrangell uses 22.7 percent of the overall load, it receives that proportion of the rebate. This year’s rebate represents a reduction in the wholesale rate of under a cent to fiscal year 2015 sales. For the past 18 years, the rate of 6.8 cents per kilowatt hour has remained unchanged.

“This was a larger than expected rebate,” said Hammer. “It couldn’t come at a better time for us,” he added. The rebate comes just as Wrangell Municipal Light and Power is looking ahead toward updating its distribution system.

A rate study presented this summer found components of the city’s power infrastructure urgently needed to be replaced. In addition to a number of new utility poles the city will need an additional 2.5 to 3.5 megawatts of backup generation capacity to support demand. A standby generator needed to fill this role could cost as much as $2.7 million.

Currently Wrangell’s power department has around $1.19 million in savings, and it has recommended that the city commission a rate increase study to put more capital in its coffers. A public workshop is scheduled at City Hall tonight at 6 p.m.

On the financial front, SEAPA CEO Trey Acteson explained the fiscal year 2015 audit was successfully completed with no material weaknesses or significant deficiencies

identified. Revenues are

slightly below budget through the end of last month, though total administrative and operating expenses were also lower than expected. Revenues through October were $3.4 million against a budget of $3.7 million.

An operations plan for 2016 was presented and approved. This year SEAPA will not have the flexibility to spill excess water over the Swan Lake spillway during dam-raising work scheduled for the upcoming year.

Inflows can only leave the lake through the powerhouse for generation or over the spillway. From April through September the project will require concrete demolition, form work and concrete placement, followed by installation of 78 feet of flashboards and installation of a 40,000 pound vertical gate.

In his report, SEAPA special projects director Eric Wolfe cautioned that interruption of the work by avoidable spill events would be potentially dangerous to crews and extremely costly to the project. To avoid this, agency staff put together action plan items for how high to keep water levels at the reservoir and manage loads throughout the construction process.

“It’s kind of a tricky thing,” Hammer explained. Weather and precipitation play a factor, and the plan can be adjusted as the year progresses.

Operations manager Steve Henson reported the Wrangell reactor project and switchyard are done, with work completed on time and under budget.

The 105 aluminum helipads manufactured by Touchdown have been received, with around half installed this season.

The remaining 55 are in storage at Ward Cove and will be installed next summer by BAM LLC.

The board also approved setting aside $7,500 to maintain four Forest Service recreation cabins, at Eagle Lake and the Harding River near Wrangell, Reflection Lake near Ketchikan, and above Thomas Bay near Petersburg.

“All of these are kind of adjacent to the SEAPA system,” Hammer explained. The cabins get relatively low usage ordinarily, and so had potential to be decommissioned. However, due to their nearness to SEAPA facilities they can provide shelter during maintenance projects so it would be beneficial to the agency to keep those open.

SEAPA also approved a memorandum of understanding with Southern Southeast Regional Aquaculture Association to release Chinook smolt in Carroll Inlet near the Swan Lake project this upcoming May.