Petersburg and Kake not in favor

of Wrangell/Cascade Creek link

Ryan Long

May 29, 2008.

WRANGELL – The Wrangell City Council held a workshop on May 21 to discuss Wrangell’s position regarding the Four Dam Pool (FDP) divestiture and the entity to be formed after divestiture. Representatives from Petersburg and Kake were in attendance and voiced their positions alongside those of Wrangell, particularly with regards to possible harm to development of regional hydropower and Wrangell’s involvement with Cascade Creek LLC.

Al Dwyer, Mayor of Petersburg indicated concern regarding Wrangell’s position on divestiture, particular in relation to Wrangell’s signing of a non-disclosure with Cascade Creek LLC. “We think that it may interfere with power development in Ruth Lake by Petersburg and Wrangell and the Thomas Bay Power Authority (TBPA) and that we wouldn’t be able to discuss the issues related to that because it would go against the agreement if you did sign it,” said Dwyer. “Wrangell’s Wrangell and Petersburg is Petersburg, but we’ve worked together for hydropower development for years. We have TBPA, we have many of the same ordinances on the books, and TBPA is supposed to be the entity that searches out hydropower for us and Petersburg is concerned about having private money on the development of Thomas Bay,” Continued Dwyer.

“We’re looking forward to putting in a permit in January or February, along with Wrangell we hope, for developing Ruth Lake and then, sometime after that, tunneling to Swan Lake and developing the whole thing.

The Wrangell City Council has intimated an interest in studying the feasibility of a second divestiture, if the divestiture of the Four Dam Pool were to go through and leave Wrangell, Petersburg and Ketchikan as the remaining members, with the same legal status and long-term debt required by the FDP, and further pare down the organization leaving the Wrangell-Petersburg project at Tyee under the sole control of Wrangell and Petersburg and excluding Ketchikan. “Right now we’re concerned about what I hear is your position and the perceived notion that the FDP isn’t looking out for our interests. Petersburg feels that they are and it appears that the majority of the Council in Wrangell thinks that they aren’t. That’s a real concern, because if one of us disagrees, nothing is going to happen. We can’t have a One-Dam Pool. If something goes wrong with the submarine cable then we’re both on diesel. There’s no other source. We need to have a backup to Tyee right now,” said Dwyer.

Dwyer indicated that Kake, who is counting on an intertie and power from the Tyee project to alleviate the cost of diesel generation, would also have a vested interest in the success of the Swan and Tyee projects were divestiture from the FDP to become reality.

City Manager of Petersburg Rich Underkofler also expressed concern that a non-compete clause in any agreement with Cascade Creek LLC., would not be in the best interest for the region and sited development at Ruth Lake as a more viable, affordable and pertinent avenue for hydro-development that would keep power in the hands of municipalities instead of private industry.

Duff Mitchell, Business Development Director of Cascade Creek LLC indicated that the non-disclosure agreement with Wrangell does not discuss a non-competition agreement with TBPA in any way. “If we built this 100 MW facility we could provide energy to communities like Petersburg, Wrangell, Ketchikan and other communities if they were hooked up,” said Mitchell. “We believe in the Alaskan first, and I wanted to make that clear,” continued to Mitchell.

Later during the workshop it was indicated that Petersburg was not in opposition to Cascade Creek LLC., but were wary of involvement on the part of Wrangell in any endeavor with Cascade Creek LLC., which may interfere with development of the Ruth Lake project.

According to Vice Mayor Paul Southland, “the question was proposed to the City Attorney as to how signing the non-disclosure agreement would affect the ability of Petersburg and TBPA to proceed with development plans.”

Southland also indicated that the news of Petersburg’s consideration of developing hydropower at Ruth Lake was new information to Wrangell.

During the roundtable at the workshop, representatives from Wrangell and Petersburg discussed their needs and desires in regards to the future entity of Ketchikan, Wrangell and Petersburg, resultant in a divestiture of the Four Dam Pool.

According to Council member Don McConachie, the organization of the Ketchikan, Wrangell and Petersburg projects would be similar to that of the current TBPA.

With the current state of affairs in Juneau after the catastrophic avalanche which disabled hydropower in the region, many members of both the Wrangell and Petersburg have begun to take a look at developing a contingency plan in the event of a catastrophic failure of the Wrangell-Petersburg hydropower infrastructure. One of the ideas posed during the workshop by McConachie would be the creation of a fund to defray the costs of diesel generation during major maintenance periods, when the Tyee project is not in operation. Current operation of diesel generation for communities of Wrangell and Petersburg have hit $21,000 daily.

One of the most difficult hurdles faced by members of the proposed Two-Dam Pool would be the control of power. The current infrastructure and controls for mitigating the flow of power after the Swan-Tyee intertie is in place is already set-up in Ketchikan. According to Light Plant Superintendent Steve Henson, “as a matter of fact it was stated that Ketchikan would be happy to turn over Swan Lake, the Operation and Maintenance and the control center over to the Two-Dam Pool and not worry about it.”

Former Mayor Tom Sims commented, “I remember when Tyee was built. It ended up costing around $132 million. The guys at Swan Lake told me their project was around $90 million. So we’re looking at around $220 million worth of projects for about $10 million, and that’s a pretty good deal. If there’s problems that you have we’ll try to work them out, but I believe that this is a very good deal for the communities of Petersburg, Wrangell and Ketchikan.”

According to Sims, many of the projects available in Southeast Alaska, and particularly in the Wrangell, Petersburg and Ketchikan area, would meet tough resistance were the divestiture to go through.

The Alaska Energy Authority will be meeting in Wrangell on May 28 in Council Chambers and, according to Southland, many of the issues facing Southeast hydropower may be discussed.