October 4, 2012 | Vol. 39, No. 40

SEAPA representatives take Tyee and Swan Lake contract issues to City Council

Petersburg Municipal Power and Light Superintendent and Southeast Alaska Power Authority Board member Joe Nelson brought streamlining suggestions to the Petersburg City Council during the regular council meeting Monday evening.

During the regular board meeting of SEAPA, Sept. 19 and 20 there was a suggestion to change contractual obligations with Thomas Bay Power Authority and Ketchikan Public Utility.

“These contracts date back to when the state owned the facilities and were last updated in 1996,” Nelson said. “We hired a consultant to see if there was a better way to do things.”

According to Nelson, the consultant, D. Hittle and Associates, came to the conclusion that the projects should be operated under one entity. He says this consultant feels there could be savings of about $450,000 per year in operating and maintenance costs.

“I personally have difficulty believing the savings is that large,” Nelson said. “This savings was not supported by the report we received from the consultant firm.”

He explained that there is certainly some efficiency that may be gleaned from a single entity, but not to that magnitude.

“We received that report just a few days before the meeting took place,” Nelson stated. “None of us, on the Board, had an opportunity to go through the report at length, but we did our best and discussed it.”

The decision to cancel the contracts between TBPA and KPU was ultimately postponed to the next meeting of the SEAPA board, which will be Tuesday, Dec. 11.

“This will not only give us a chance to really dig into this report, but to bring our findings to you, the City, and see where you would like SEAPA to go with the contracts,” Nelson said. “We know this needs to be looked at, but it will take a lot of discussion.”

Petersburg City Council member Rick Braun asked if the consultants suggest dissolving the agreement, if there is a plan for that action in place.

“It would be nice to see what type of plan that may develop for this reorganization,” Braun stated. “It could give us an idea of how things may work.”

According to Nelson a development plan for this suggestion was not provided with the report. “If we vote to go this direction, it will be up to us, SEAPA, to come up with a plan,” he said. “This was just one of the disappointing aspects of this report. They gave no input and there were no organizational charts that one would normally expect.”

Nelson also explained that he was bringing this issue to the City in order to find out what direction the council wanted them to go.

Petersburg City Council member and SEAPA Board member John Jensen also said he felt the report was sprung at the last minute. “The report was planned and we had commissioned the work, but it came out kind of late to be effective for this meeting.”

Jensen also explained that he felt they wanted an answer at this meeting.

“The group was reluctant to make a decision on a study we really hadn’t had time to go over,” Jensen said. “I am of the opinion that TBPA and KPU can play a big role in power generation for this area.”

According to Jensen they are trying to get rid of TBPA and KPU too quickly.

Council member Don Koenigs suggested they place this issue on the agenda for the next council meeting, Monday, Oct. 15.

“I believe we, as a council, should take the time to go over this report thoroughly,” Koenigs said. “And if they are going to propose something such as this, there should be a plan in place.”

According to Koenigs, the council needs to dig into the report and dust off the old contracts and possibly update the ordinance the City has in place.

“If there are savings to the rate payers and it’s significant, we should take a close look at it,” Koenigs said. “But we don’t need to only look at the cost savings, but the political recriminations as well.”

Thomas Bay Power Authority General Manager Paul Southland asked that the communities weigh in with their opinions on this matter.

“These organizations have been operating for the communities for nearly 40 years,” Southland said. “A single operator may have significant advantages to the communities, but maybe not. Because the communities buy in, they need to be involved in this process in more than a four day period of time.”

This issue has been placed on the agenda for the Oct. 15 council meeting and will also be discussed at the Dec. 11 SEAPA Board meeting in Ketchikan.

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