Above, a graph shows SEAPA's total power sales to the community by month over the past three fiscal years. The chart shows sales for Wrangell areas. With FY17 on its way to wrapping up, the year's usage has been given a systemwide boost by colder than usual winters.
The governing board for Southeast Alaska Power Agency has approved a draft for next year's budget, as well as a hefty rebate to its member communities' utilities.
The decision was supported by a fair financial position for the agency, which supplies hydroelectric power to Ketchikan, Wrangell and Petersburg. In a meeting held at Wrangell's Nolan Center Tuesday afternoon, SEAPA chief executive Trey Acteson explained sales revenues had come in higher than expected. Power sales to Ketchikan, Wrangell and Petersburg together totaled $11.1 million, more than $1.15M above what was budgeted, and $1.56M better than the prior year to date. Administrative and operating expenditures were about $1.1M lower than budgeted for as well, at only $4.26M by the end of April.
As of the end of May, expenditures for the year's largest project, the expansion at Swan Lake hydropower facility, came in under budget. Undertaken last summer, the project saw the raising of the dam and redesign of its spillway gate control system and debris boom. In all the raise is designed to increase reserve capacity by 25 percent. Expenditures for the project came in at $10.98M, down from an approved budget of $11.1M.
Reserve funds are also reportedly healthy. In addition to the $6.6M the agency has in its operating fund, as of last month it has over $15M in dedicated reserves and $4.78M in restricted funds. Along with trustee funds, SEAPA's total funds stand at $26.9M.
In light of increased revenues, Acteson recommended a rebate worth $2.7M to member communities. Figures calculating the rebate are based on three-year averages of power sales, with the rebate divided up proportionally to individual communities. As Petersburg has used roughly a quarter of overall power, it would receive $685,403 in the FY17 rebate, while Wrangell would receive $606,137 back. By the agency's calculations, the rebate would reduce the wholesale power rate for the year by 1.4 cents.
"Certainly there are other things we can do with the excess revenue," he added, such as setting it aside for future projects. Board members agreed to the rebate provisionally, provided no particular fiscal hurdles have to be leapt coming from the state or federal governments. Wrangell delegate Stephen Prysunka explained the rebate issue may be relooked into come December.
Board members also debated whether to alter wholesale power rates. At 6.8 cents per kilowatt hour, the rate has remained consistent for the past 19 years. Maintaining that rate was recommended by Acteson.
"I took a real hard look at it this year and thought about it at length," he explained.
Operating and maintenance costs are expected to continue increasing, and it would be prudent to continue saving for large scale projects that will eventually become necessary, such as underwater cable replacement. But given the state of SEAPA's revenues and reserves, he felt a rebate would be manageable.
"I think we were able to make our budget work this year," Prysunka commented. "We've got some good reserve funds and we've got some extra cable."
Board members also approved a small payment of $3,307 to Ketchikan Public Utilities, reimbursing the utility for a short diesel fuel run last month. The run had been necessitated by a forced outage, caused by a SEAPA contractor working on switchgear relay protection at the Swan facility.
Due to uncertainty surrounding the Wrangell City and Borough's ongoing negotiations with its public employees union (see Assembly story), Acteson announced that maintenance along the Tyee Lake transmission line scheduled to start this week has been put on hold. Similar work along the lines emanating from Swan Lake and the Swan-Tyee intertie were already completed this month.
The project was supposed to last for two weeks, during which time Wrangell and Petersburg would be left to their own devices for power generation. There are only a few ideal windows of opportunity to undertake such work, such as late spring and early autumn, when demand tends to be at its lowest.
With Wrangell's electrical workers potentially joining other public employees in a strike, the city's ability to manage running its diesel
generators during the planned maintenance shutdown is doubtful. To minimize impact on SEAPA customers, Acteson explained, the agency would wait until the situation becomes more clear before moving ahead with the project. The Wrangell Assembly was
scheduled to meet in an emergency meeting Tuesday evening, after SEAPA's board meeting.
During the meeting board members also withdrew into a closed executive session to discuss SEAPA's hydrosite investigations. The agency's attorney, Joel Paisner of Ascent Law Partners, recommended the course of action. Acteson explained the decision to do so was influenced by strategic considerations.
Prior to the session, Ketchikan board representative Andy Donato wanted to know whether addition of a third turbine at the Tyee Lake hydrofacility would be included in the discussions. Acteson responded that it would be, to an extent. Considering the cost of such an investment he noted that the amount of use a third turbine would receive would be important. Presently the two turbines at Tyee are sufficient for power demand, but one benefit of having a third would be the added backup generation capability.
Meanwhile, plans to alleviate silting issues at the harbor area of Tyee Lake are awaiting support from the Army Corps of Engineers. SEAPA operations manager Steve Henson reported the Corps' Anchorage office tentatively plans to send staff to the site for a review of the proposal.
The board's next meeting is set for September 28 in Ketchikan. Its next meeting in Petersburg is scheduled for two days beginning December 13.
Reader Comments(0)