SEAPA meeting covers divestiture, mission statement
The Southeast Alaska Power Agency held their regularly scheduled meeting on March 5-6 at the Nolan Center in Wrangell. During the meeting the group came to a consensus on whether voting or non-voting members can make and second motions, and took a detailed report from Seattle-based attorney Joel Paisner where he informed the board of the basics of the agency – and their “fiduciary” duties to SEAPA.
Before Paisner’s report, however, the board took public comment from Borough Assembly member James Stough and a pair of Wrangell citizens on the topic of a possible divestiture move by the Assembly.
“At the last (Assembly) meeting, we sent forth communication between Wrangell and Petersburg to start looking into divestiture that is supposed to come up in December 2014,” Stough said. “We’re hopefully moving forward with a committee (that) will start studying and look into the pros and cons of this due diligence … we’d like to pursue that and see what the question is and what the answer will be. So, we’ve started our side of the procedure and notified Petersburg that we intend to start that procedure and welcomed them to start their side.”
Stough also added that he was informing the SEAPA board because of how it may affect their organization.
“They’ll probably be independent, but we would like to work jointly with them and also with Ketchikan to look into the procedure and to look into the pros and cons of it,” Stough added. “It is a requirement that we faced before when we went from a four-dam pool to a two-dam pool. I was involved at that time and we’ve come to the juncture … it should be a long-term thing that we start so we don’t make foolish decisions … we feel that may have an impact on your organization and you should be aware of it.”
The committee to review divestiture that Stough has recommended in the past would be comprised of Assembly members, TBPA representatives and others from the community.
Wrangell resident Bob Maxand then addressed the board on why he felt SEAPA should take the place of Thomas Bay Power Authority, the current operator of the Tyee site.
“I was on the original council that along with Petersburg formed the go-ahead on the Tyee Lake project,” Maxand said. “There is probably half a dozen people in this town that for some reason have got it in for SEAPA. I don’t know what the feelings are in Petersburg, but as far as I am concerned, during the past week I have been studying … and I don’t know what these people are thinking, but I have got to commend SEAPA for the job they have done. They’ve got the generation done and they are working on projects and I just don’t understand what some of the people in this town are thinking. The ones that I have talked to say that ‘the Thomas Bay Power (Authority) should go away.’ And I am beginning to think that is what should happen. I think they have served their time and now it’s time for another group to take over.”
Dorothy Hunt-Sweat also spoke up during the public comment period.
“I’m just the opposite of Bob,” she said. “I do not want Thomas Bay to go away. I just think that they do a very good job and it isn’t, to my way of thinking, a good way to reward them for what they have done to say ‘okay, we’re done with you now.’”
Hunt-Sweat then raised questions to SEAPA CEO Trey Acteson regarding new staffing at the agency, as referred to in his report to the board.
“About two months ago you came to Wrangell and I gathered from what you had to say that you wanted to save $500,000 in (ratepayers) money for SEAPA by eliminating the positions at Thomas Bay,” she stated. “But now, I am informed that you’re looking for four new employees and asking for positions. My question is, how come? If we’re going to get rid of a bunch of employees, why hire more employees? Why not use what we have? Retrain them. Is that something you can address now?”
“Just to clarify, that discussion occurred during the O&M study that was done by D. Hittle,” Acteson responded. “There were some recommendations (regarding) staff at some of the projects, that there could be some money saved and that report was commissioned by this board. In regard to new positions, perhaps some existing people could be used. They have to fit the skill set. We have very specific skill needs that we’re looking for and my recommendation is to go a little bit deeper for the agency and in my report I say that could probably be covered with two to three people. It just matters how potential candidates fill the skill set.”
After public comment, Paisner addressed the board on the background of SEAPA and its bylaws, Joint Action Agency Agreement and Power Sales Agreement – and on the fiduciary duty of board members to the agency.
“What’s your obligation to the SEAPA board?” Paisner queried, answering. “All of you as members and alternates are appointed by your city councils to serve here on this joint action agency, SEAPA. SEAPA is not the same as your town. SEAPA provides wholesale power to your towns (and) your towns sell it … essentially, as you sit here as a board member of this agency, you owe what is known as a ‘fiduciary duty’ to this board.”
Paisner then went on to explain what that means in terms of allegiance to board members and their respective communities.
“I would argue that that means you have to owe a duty and allegiance to this board to be loyal to it and fulfill your duty to and not necessarily to your individual towns and what they wish because, surprisingly, the towns don’t always agree with what SEAPA wants to do,” he said. “So, there (are) conflicts there. I would say, as the lawyer representing this agency, you have a duty to this agency to take care of the assets and make sure that you abide by the rules of the road that are governed by the statutes.”
In old business, the board directed Acteson and staff to determine a course of action in relation to a diesel protocol for SEAPA and the member utilities in the event of forced or emergency shutdowns. Information on that plan is set to be forthcoming during the next regular meeting.
The issue of public records requests was also handled by Paisner – and he informed the board that, while their bylaws state they must follow the Alaska’s Open Meetings Act, they were under no formal requirement to answer public records requests.
“The question arose over the last couple of month about what are the agency’s disclosure obligations, and obligations regarding the Open Meetings Act,” Paisner said. “The Open Meetings Act obligation is easy. From the creation of the Four Dam Pool, to its restructuring at the time of renaming to SEAPA, the agency has always agreed in its bylaws to abide by Alaska’s Open Meeting Act.”
Paisner then informed the board of the lack of a requirement to provide records to the public.
“Public records requests and the public records obligation is completely separate from the Open Meetings Act,” Paisner said. “The agency has never agreed and thought that it was bound by those statutes under Alaska law.”
Paisner’s rationale for that argument is that, under the JAA, SEAPA is only a public agency for the purpose and right of “eminent domain and condemnation,” and that except for that limited purpose, the agency is not a public entity but a public utility not subject to a public records act.
“In my opinion, you are not subject to the obligation of the public disclosure act,” Paisner added.
The Wrangell Sentinel reporter, Greg Knight was then recognized by chairman Sivertsen, and thanked the board and SEAPA staff for posting foundational documents and board packets on their website – and also asked for a definition of what was proprietary versus public records. At that point Petersburg’s voting member Joe Nelson asked if a Sentinel reporter had ever been denied access to records, to which Knight stated, “no.”
KFSK FM News Director Joe Viechnicki then addressed the board via teleconference telling them that a request for documents had, in fact, been denied to his station in the past.
“We have sought dollar amounts for the public relations contract and we were not provided that before, for example,” Viechnicki said.
No action in regard to a policy on public records requests was made by the board.
Under new business, the board approved a conflict of interest policy, an annual line contract for transmission lines, and a pole replacement and alignment project. The group also affirmed the Tyee water-cooling project and capital fund outlays for the Tyee stream gauge.
A mission statement for the agency was also approved, with Wrangell’s voting member Brian Ashton voting against it.
The statement reads, “SEAPA’s mission is to provide the lowest wholesale power rate consistent with sound utility planning and business practices. We exist for the long-term benefit of our member utilities and the rate payers, providing unified regional leadership for project development and prudent management of our interconnected power system.”
After the meeting Ashton spoke to why he was not in favor of the mission statement.
“I voted against the measure because the Mission Statement should have been written at outset of SEAPA and in cooperation with the three partner communities that formed the agency,” Ashton said. “I also felt it was important that the Borough councils review the statement before it was passed.”
In TBPA General Manager Paul Southland’s report to the board, he informed that he had developed two budgets for 2014, with one using the normal fiscal process, and with one apportioning non-net billing expenses.
“I am asking the Commission to take formal action to move one forward to the Boroughs at this next meeting,” he wrote. “To give added time for Commission review they were sent in advance of the meeting packet.”
In clearing operations, Southland reported that a line clearing crew started on Vank Island early in February but that he was seeing slow progress compared to last season when an ARGO all-terrain vehicle was available.
A 7-day planned hydro outage is also scheduled for either May 13-19 or June 3-9 according to Southland.
In other items decided during the meeting, Bob Sivertsen was renamed to be the chair of the board, with John Jensen named as vice chair and Sam Bergeron tapped to be the secretary and treasurer. After considerable discussion, the board also decided to allow only voting members, rather than alternates, to make and second motions during open sessions. Alternates may take part in discussion of issues, however.
The next meeting of the board will be April 25 and will be held in Ketchikan.