The Southeast Alaska Power Agency provides power to the communities of Wrangell, Petersburg, and Ketchikan. CEO Trey Acteson said they have not had a rate increase in over 23 years, holding steady at 6.8 cents per kWh. However, due to anticipated costs in the near future, he reported that they are expecting a necessary rate increase sometime next year.
"It is still a little early in the process to provide a firm number on any potential rate increases, but I can assure you the SEAPA Board prefers small incremental adjustments, with as much advanced notice as possible," Acteson wrote in an email. "The Agency is very sensitive to the ongoing fiscal challenges of our Member Communities during these challenging times."
The main reason for a rate adjustment, he said, is because SEAPA is expecting to take on somewhere between $7.45 to $13.37 million in long-term debt to cover their submarine cable replacement project. This project is expected around May or June of 2021, he said. A rate increase will help them address the debt service. The SEAPA board is also looking at future revenue requirements to respond to issues such as an aging infrastructure, relicensing, and new generation opportunities, among other items.
"There are a lot of unanswered questions at this point," Bob Lynn, Petersburg resident and SEAPA board chairman wrote in an email. "As Trey will tell you we have some insurance on the cable but not near enough to cover the cost. Until the cable is pulled up to see what caused the damage the insurance
company will not pay. Meantime SEAPA will be using almost all its financial assets to pay the costs up front. Until the actual insurance reimbursement can be pinned down a bit better Trey cannot go to the bond bank for a loan. Some of the most important answers will not happen until 4-5 months into 2021. At some point maybe mid next year the rates will need to increase."
Acteson said there was no determined amount the rate increase might be set at yet. However, he did say that SEAPA historically has charged the same flat rate to all three communities.
"We understand that the wholesale power rate has not increased in a number of years, and the aging infrastructure that SEAPA has will need upgrades," Lisa Von Bargen, Wrangell's alternate board member, said. "To keep up with necessary maintenance, rates will have to be slightly increased."
Reader Comments(0)