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By Dan Rudy 

Tyee PERS liability larger than expected, Swan nears completion


Clay Hammer / Submitted Photo

Risers along the top of the Swan Lake hydroelectric facility spillway await the installation of flashboards, which will enable the 78-foot expanse to collapse in the event of large-scale flood events.

WRANGELL – Costs for the transition of operations at the Tyee Lake hydroelectric facility may be higher than first expected.

Board members for Southeast Alaska Power Agency learned at their September 8 meeting that the unfunded pensions liability for Wrangell employees at the plant were more than double what was estimated when it assumed operations. SEAPA CEO Trey Acteson explained consultants had put the city"s liabilities to the state Public Employees" Retirement System at $648,206, which included up-front costs of $159,440 with the long-term liability.

When SEAPA took over operation of the facility from Thomas Bay Power Authority in August 2014, it had agreed to assume those costs. The up-front portion was billed and paid in February, but Acteson reported the billing for the remaining liability presented by the state in August had come in at over $1.2 million.

"These bills were more than double the original estimate," he said. The discrepancy came from the state"s inclusion of past service costs for all affected employees, not just those enrolled in PERS at the time of the transition. "That was a new development."

With the new billing, the total estimated cost of the Tyee transition has been amended to $1.39 million.

In the board"s financial report, total power purchase revenues through the end of the fiscal year June 30 were reported at $10.92 million, short of the $11.73 million budgeted. Taking displaced sales from other operations, annual revenues for the year ended up being under budget by $147,308. However, savings on the expense side of administration and operations more than offset this shortfall, with $5.7 million spent against a $7.39 million budget.

SEAPA staff is currently preparing for its annual audit, which is scheduled for next month around the 24th.

"We"ve been working hard to get prepared for that," said Acteson.

In projects, the expansion at the Swan Lake hydroelectric dam should wrap up by the middle or end of October. Since June, spillway center pier and wall construction was completed in preparation for Assembly of the gates and flashboards. Components were received early last month, and the project is currently running about two weeks behind schedule.

Inspecting the site while in Ketchikan last week, Wrangell"s electrical superintendent and alternate SEAPA board member Clay Hammer was impressed with the work done so far. It was his first visit to the dam since work to raise it began, and he admitted the visit gave him a new respect for the project"s scale. The raising of 15 feet from its current 59 feet will yield an expected 25-percent boost to capacity, yielding between 6,000 and 12,000 Megawatt hours annually.

"That was a real eye-opener," he commented. "The amount of work and engineering that has gone into this project is also very impressive."

One of the trickier elements to the operation has been maintaining the reservoir at a stable level, both to enable work on the spillway and to provide a steady base for the crane, which is on a modular barge. "They"ve got a kind of sweet spot that they like to maintain," Hammer explained, at about 313 feet.

Work would have to stop if levels exceeded 327 feet, so the difference provided the project with some buffer in the event of unexpected wet weather or loss of transmission capability. In his power systems report, Ed Schofield reported the project has been aided by a dry July and August. As that trend is forecast to continue, he did not foresee an extension into later October as presenting much risk to the project.

Earlier on in the summer there were concerns about keeping the reservoir at that level, after a load bank hired to help regulate outflow encountered problems. The purpose of the device is to draw additional power in order to allow release of water from the turbines as needed. In June it experienced a problem with its cooling circuit, which ended up tripping the system"s failsafe and causing a power outage to the grid. The project continued on without the machine, which turned out to be unnecessary thanks to the dry summer.

"All things considered, they"re doing very well," Hammer said.

In all, the expansion is expected to cost around $10 million. Acteson reported grant

dollars set aside for the project has been fully exhausted,

Clay Hammer / Submitted Photo

The mobile barge at the Swan Lake hydroelectric facility reservoir serves as a platform for a crane used in the dam"s ongoing expansion. Water levels at the reservoir have had to be kept at a steady level in order for the project to move forward.

once invoicing was finished for work completed in August. The $3.32 million grant came from the state Department of Commerce Community and Economic Development and was dedicated to the project.

Expenditures on the Kake-Petersburg intertie project expenditures have been minimal during the final Record of Decision comment period. TetraTech is addressing the last of the filings, which is required before the Final ROD can be signed. The first grant through Kwaan Electric Transmission Intertie Cooperative will not be renewed, so SEAPA has begun to draw on the second, which totals $2,000,000.

Due to revenue shortfalls, the board also discussed ways to increase revenue through surplus power sales. This would involve selling hydropower in excess of its long-term power sales agreement requirements at an adjusted rate, more comparable to the costs of heating fuel. The hope is that this would incentivize dual-fuel source users to shift back and remain on electric heat.


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