SEAPA to hold vote on Tyee staffing plan
The Southeast Alaska Power Agency Board of Directors is set to vote next week on accepting a report that recommends a single operator at Thomas Bay Power Authority and Ketchikan Public Utility sites in Southeast.
SEAPA commissioned the report, which was released in September and will be discussed at their Dec. 11 meeting in Ketchikan, as an alternative to current staffing and risk management solutions at Swan Lake and Tyee Lake hydroelectric plants.
According to SEAPA chief executive officer Trey Acteson, the change in operating structures at the two plants would see a $461,500 reduction in costs – with the dismissal of four plant operators.
The report is also advocating a pair of operational and management plans. The first would see a modified SEAPA structure with the agency providing O&M. The second would keep SEAPA’s five-employee structure intact, but would utilize a single contractor for the Tyee plant and Ketchikan Public Utilities.
The Borough Assembly voted down support for the plan during their most recent regular meeting on Nov. 27, with Acteson responding vividly after the vote.
Acteson addressed the board after Borough Mayor Don McConachie raised the issue of remote site operation as a key factor in questions Wrangellites may have about any proposed change to staffing levels.
“One question was the staffing of the remote sites where we were going to do a certain amount through technology,” McConachie said. “Now, I realize that when we had the report given to us in the workshop we had here a couple of weeks ago, that it was stated by you and others that you have run remote sites before.”
Saying a remote site was a “double-edged sword,” McConachie then asked, “Is a remote site in the lower 48 something that is a long ways away from the community it serves, but still accessible by road? Is a remote site something that you have to fly your people into and out of, and if you have a problem during that time due to bad weather and can’t get there, what happens?”
Acteson then pointed out his experience and explained his thoughts on a single operator at either Tyee or Swan operations.
“All of my experience, 28 years of O&M power plant experience is in Alaska at remote and semi-remote sites, so I’m very familiar with the issues there,” Acteson said. “I would constitute a remote site as someplace that does not have road access. Semi-remote would be a place that has some remote access but is a long distance from anywhere and sometimes access may be very marginal due to weather conditions. But, I think there are examples (of) places where they have remote operation and they have a single person at the plant. There’s ways to manage your work effectively to mitigate that risk.”
After stating that SEAPA does not plan on “terminating people,” Acteson added that he is concerned about the level of training – and cross training of TBPA employees at the Tyee site.
“In a year-and-a-half, if SEAPA were to take the ownership-operation of it back, there are several things I would,” Acteson said. “I would do a skills and needs assessment of the people that are out there. I’ve heard from the foreman, testifying right here, that we can’t work the people between the two plants because they don’t know how. We have clear, clear risk right now. And, I have to emphasize that SEAPA has all this risk.”
Paul Southland, the manager of TBPA is also raising a number of issues – with both the organizational structure of SEAPA and the costs associated with its operations, and the D. Hittle report recommending a single operator.
Southland first noted, after the Nov. 27 meeting, that SEAPA has undergone a 39 percent increase in administrative costs during the past three years of its existence, while losing half of the staff formerly employed by the organization.
“It’s absolutely a foreboding number, that 39 percent,” Southland said after the meeting. “Unless they can establish that they can maintain their administration costs with any reasonable level it certainly is a problem for me and ultimately the ratepayers.”
Southland added that better communication could go a long way in the process, whether under single or multiple operator plans.
“Trey seemed not to be able to communicate with the assembly very well and that is one of the single most important benefits that could be performed by a single operator,” Southland added. “Open communication lines by all of the staff members would help to get every one onboard. I would submit that a single operator is something that can be done, but we can also do this under a multiple operator scenario.
A lack of knowledge of the inner workings of the Tyee and Swan plants could be a thorn in the side of SEAPA, however, according to the TBPA chief.
“The SEAPA plan is bad because KPU and Thomas Bay know all the little bugaboos of a 30-year-old plant and we know all the areas we have to keep an extra sharp eye out for,” Southland said. “While SEAPA emphasizes their multitude of years of experience in the hydro industry, aside from (operations manager) Steve Henson, they have very few years of experience in our particular plants.”
Acteson, in a statement after the meeting, said that movement toward a single operator is a good idea and is also necessary to keep a lid on rates for electric customers in the SEAPA service area.
“There are a few good reasons, primarily being that SEAPA is the responsible party for the projects,” Acteson said. “The D. Hittle report is a recommendation, but the bottom line is that SEAPA is responsible from a compliance and FERC requirement perspective.”
FERC stands for the Federal Energy Regulatory Commission, the federal agency with jurisdiction over hydroelectric licensing, wholesale electric rates, interstate electricity sales and other factors relating to energy rates.
“We are also responsible for the fundamental attributes of the projects, yet we have no control over how they are staffed, operated or maintained,” Acteson added. “That is one big component having to do with the management side of things. Another important component is the upward pressure on rates. One of our primary fiduciary responsibilities is to have a long-term perspective and implement things that will help reduce the impact of escalating rates.”
He then rebuffed Southland’s attempt to paint the downturn in SEAPA staff as a meaningful benchmark
“First of all, that’s a poor attempt at doing an ‘apples to oranges’ comparison,” Acteson said. “The purpose of the D. Hittle report was to view our current operations and maintenance and operations organization in order to see if we can do things better to save money for the ratepayer. What Paul is attempting to do is to compare costs that are currently covered by SEAPA, and if you actually delve into the numbers, SEAPA covers a lot of extra costs that aren’t covered by O&M contractors.”
Acteson added that those costs include fees paid to FERC and insurance premiums.
“We pay those things that are escalating, so what we’re trying to do is look at how we’re doing our business in order to hold down costs,” he said.
The SEAPA board will meet on Dec. 11 in Ketchikan to consider the consolidation plan.