A hydro power agency in Southeast Alaska proposed to cut a customer rebate last week after it increased by nearly $1 million in 2017, but the board shot it down while keeping the possibility of a future slash in play.
Trey Acteson, CEO of the Southeast Alaska Power Agency, or SEAPA — which provides most of the power used by Petersburg, Wrangell and Ketchikan — gave two propositions to its board last Thursday: Give $2.7 million in rebate money back to the ratepayers, or cut it by 30 percent to save for future projects and debt.
“I think it’s a healthy discussion to have, just for the benefit of the board,” said Acteson, noting that SEAPA averages about $800,000 in rebate. “So if the board wants to possibly look at perhaps trying to hitch our long term debt and lower that perhaps in the future to keep a cap on rates we could potentially start setting aside funds for larger projects.”
A 30 percent cut would set aside money for risk management funds, start a power rate stabilization fund, or projects like replacing the agency’s submarine cables, which would likely cost between $40 million and $50 million, Acteson said.
“So there’s lots of options,” said Acteson, reiterating possible future discussions on the topic of big project foresight. “We know they’re coming.”
Mark Jensen, a voting member of SEAPA from Petersburg who supported a rebate cut, said the agency should start preparing to tend to its infrastructure. This was Jensen’s last meeting as Bob Lynn is slated to take his seat in 2018.
“I definitely think we need to start putting something away,” Jensen said. “But I know it will affect Petersburg as well to lose 30 percent of what the projected rebate was.”
Since the board vetoed the cut, Petersburg stands to receive about $685,000 in rebate. In Ketchikan, the rebate will add about $1.4 million to its budget.
Karl Amylon, a member from Ketchikan, said the board already approved the rebate without a cut in June, before it was revisited last week after the final SEAPA budget was audited.
“I fully understand the need,” said Amylon, who later voted no, adding that it’s too late in the year. “In Ketchikan … our budget is structured on that.”
With SEAPA state and federal grant dollars fading, Clay Hammer supported the rebate cut, saying it would be bad business not to save now and prepare for high cost items later. Hammer is a member from Wrangell, which stands to make nearly $610,000 from the rebate.
“It’s kind of always been a concern of mine that we do know that we do have big ticket items on the horizon,” Hammer said. “And right now we have extra money and were basically repaying that to the ratepayers, knowing full well that at some point in the future, we are going to have to come up with a whole bunch of money for some of these projects”
Charles Freeman, a member from Ketchikan, said the topic should be shelved until 2018.
“I don’t see the urgency to do that right now,” Freeman said. “I think it’s something we should address early on next year.”
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