October 3, 2013 | Vol. 39, No. 40

Petersburg assembly approves SEAPA takeover

The Petersburg Borough Assembly approved a resolution Friday informing the Wrangell assembly of its acceptance of Southeast Alaska Power Agency’s offer to take over Tyee Hydroelectric Project operation costs. The resolution urges the Wrangell assembly to also accept the offer.

Kyle Clayton / Petersburg Pilot
The freezer installation at Hammer and Wikan grocery store should be finished by Monday.

SEAPA CEO Trey Acteson presented the offer that would also absorb existing Thomas Bay Power Authority employees along with their Public Employee Retirement System unfunded liabilities in excess of $750,000 should SEAPA terminate the current Tyee contract.

The Petersburg assembly’s approved resolution states that should the Wrangell Assembly not accept SEAPA’s offer or future negotiating terms that “the unfunded PERS liability…will be the sole liability of the City and Borough of Wrangell should SEAPA determine to terminate the agreement with TBPA.”

SEAPA already owns the Tyee hydroelectric plant and pays for Thomas Bay Power Authority operations and maintenance. TBPA was originally created to develop hydro projects in the area but currently acts as an operations and maintenance contractor for Tyee.

The offer and resolution comes after the Petersburg assembly voted in May not to fund its share of a portion of the TBPA budget labeled non-net billable—funding that Wrangell and Petersburg have traditionally split that goes towards administrative costs of TBPA’s commission. The lack of funding left Wrangell shelling out its $55,000 share.

The Wrangell assembly isn’t entertaining SEAPA’a offer as of yet and is seeking legal advice as they consider asking SEAPA to fund the other half of the non-net billable expenses.

Wrangell assembly member Jim Stough said he wants Wrangell to take over TBPA so his community can have a say in power issues.

“We should have the right to say yea or nay on our electrical rates,” Stough said. “Our community should have a voice.”

Ketchikan Public Utilities is also concerned about a potential SEAPA takeover. In a memo, KPU officials express concern over Acteson’s proposal to absorb the PERS unfunded liabilities.

“It appears that the CEO is effectively recommending that 52% (Ketchikan’s share of SEAPA sales/Budget in 2013) or approximately $394,000 be shunted as debt to Ketchikan in the deal. The justification for KPU to assume the debt is that KPU receives energy from Tyee as well as Swan,” the memo states.

According to the memo, that debt would cause KPU ratepayers an “unjustifiable one-time charge of $53 across all our 7,384 meters.”

The memo also states the three municipalities whose members sit on the SEAPA board have a responsibility to SEAPA to not incur the unfunded liability cost.

Acteson stressed at a joint work session last month between Wrangell and Petersburg assemblies that all aspects of the offer would have to be approved by the SEAPA board.

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