The Petersburg Borough Assembly authorized Borough Manager Steve Giesbrecht to sign off on the agreement between the Petersburg Borough, the City and Borough of Wrangell and the Thomas Bay Power Authority (TBPA) that transitions operation and maintenance of the Tyee Hydro Lake facility to Southeast Alaska Power Agency (SEAPA).

The four bodies have been negotiating the agreement since last year when the Petersburg assembly voted not to fund its share of a portion of the TBPA budget labeled non-net billable—a bill Petersburg and Wrangell have traditionally split that goes towards administrative costs of the TBPA Commission. The lack of funding left Wrangell shelling out its $55,000 share—enough to keep the commission running for about 6 months.

SEAPA owns the Tyee hydroelectric plant and pays for TBPA 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. SEAPA offered to absorb TBPA and take control of operations last September. Monday’s vote marks the beginning of the transition.

“We spent the better part of the time letting our three attorneys hammer out the details,” Giesbrecht said Monday in regards to the past several months of negotiations.

The highlight of the agreement frees up the Petersburg and Wrangell boroughs from paying Alaska Public Employee Retirement System (PERS) liabilities for TBPA employees should SEAPA cancel its contract with TBPA.

“Early on we were worried about the PERS issue,” Giesbrecht said. “We were not sure if SEAPA would agree to that. They did…It’s a great agreement for Petersburg and Wrangell in the sense that it doesn’t cost us anything and we are out from under a potential large PERS

liability.”

Those liabilities could have cost Petersburg and Wrangell more than $750,000.

“The bill will come to Petersburg and Wrangell.We will give the bill to SEAPA, and SEAPA will pay that bill,” Giesbrecht said. “There’s no lump sum money for us to have to invest between the two communities. SEAPA will take full responsibility for that until it ceases to be an issue.”

The Wrangell Borough Assembly voted Tuesday night to move forward with the agreement and the TBPA Commission meets Thursday morning in Petersburg where it will also come to a vote.