SEAPA votes to terminate contract with TBPA

The Southeast Alaska Power Agency (SEAPA) board of directors voted 5-0 June 26 to terminate the Operations and Maintenance contract for the Tyee Lake hydroelectric facility.

Tyee Lake is presently operated by a joint creation of the Petersburg and Wrangell assemblies— the Thomas Bay Power Authority. The future of the Authority has been in question since the Petersburg assembly voted to withhold a portion of its operating costs known as the Non-Net Billable in October 2013. Borough assemblies in Wrangell and Petersburg passed December resolutions calling for their managers to negotiate an end-game for TBPA. Negotiations between Petersburg manager Stephen Giesbrecht, Wrangell manager Jeff Jabusch, and SEAPA CEO Trey Acteson have been ongoing.

The motion passed alongside another unanimous vote authorizing Acteson to “execute an agreement providing for SEAPA’s assumption of the Operation and Maintenance obligation” for the facility under a series of conditions, many of which echo discussion from an informal presentation made Sept. 9, 2013.

They are as follows: that SEAPA assumes operations at Tyee; that SEAPA will assume the public pension obligations for TBPA employees; that SEAPA will negotiate a collective bargaining agreement with TBPA employees; that SEAPA will consider employment for the TBPA manager and secretary through the May 3, 2015 end date of the general manager’s contract.

The conditions of that last clause may be affected by actions taken by the TBPA commission, which placed current General Manager Mick Nicholls and Secretary Rhonda Christian on paid administrative leave Friday pending a final determination of their professional status to be conducted at the TBPA meeting July 9.

Taken together, the votes put a certain June 30, 2015 end-date on TBPA operations at Tyee, an at-times uncomfortable marriage of SEAPA (and its predecessor, the Four Dam Pool Power Agency) ownership and TBPA operation dating to the State of Alaska’s divestiture from direct ownership of hydroelectric facilities in early 2000s.

However, the handoff between the two agencies will likely come sooner, said SEAPA board chairman Bob Sivertsen.

“There are certain things we have to get through with the union contract, things like that,” he said.

Sivetersen viewed both resolutions favorably.

“I think it’s a good thing,” he said. “I think it’s been something that’s moving forward for quite a period of time. The first resolution is because we got a time stamp – June 30 – and it’s just good practice to put that in whether we use it or not, because we’re assuming we’re going to do this negotiated transition as we are in good faith with everybody and it’s gonna work out just fine.”

Many of the provisions in the SEAPA resolution are identical in intent, if not exact wording, to similar clauses in resolutions passed by the Wrangell and Petersburg borough assemblies, including a provision to keep the TBPA employees whole. The similarity was by design, Sivertsen said.

“In past meetings, the board

has talked about the fact of keeping the employees whole,” he said. “We don’t wanna create them any harm, and

that has been our focus. Staff has negotiated with the (International Brotherhood of Electric Workers) and the employees very favorably. I think it’s a plus for the employees, and yet it’s still a plus for us. I think it’s a wash in terms of money, but the benefits are going to be much better for the employees. I think it’s a good thing all the way around for everybody.”

The most costly provision to SEAPA would be the Public Employee Retirement System, or PERS benefits. Fewer senior employees and new hires would have their pensions folded into the IBEW system. Employees nearing retirement would be allowed to maintain their PERS pensions under an arrangement where Wrangell would present SEAPA with a bill for the PERS contributions on a monthly basis, Sivertsen said.

Tyee employees will receive a better benefits package under SEAPA and the IBEW, Acteson said.

“I think it’s moving in the right direction,” he said. “It’s been a long time getting there. I think we’ve put together a really good package for the employees and we have a tentative labor agreement, and I’ve met with the folks out at Tyee, and they’re comfortable with that. I think at the end of the day, their retirement package is quite significantly better, especially for the Tier IV guys, and most of guys out there are Tier IV guys.”

“Their existing plan is a high-deductible plan, and the new plan will be a lower-deductible plan, which is a huge, huge benefit to them as well,” Acteson added. “I think SEAPA’s meeting their commitment to taking care of the employees. We’ve talked around these issues for a good year and a half now, and it’s always been our commitment to make sure that they weren’t harmed during the transition. I’m looking forward to moving the process forward and then finalizing it.”

Negotiations between the borough and SEAPA are progressing, and a formal offer could be brought before either borough assembly as soon as the end of the month, according to Acteson.

“We’ve had a tentative agreement that was on the table and we’re moving toward finalizing that, and hopefully they’ll be able to bring something in front of their respective governing bodies in the next couple of weeks,” he said.

Borough managers had said they were eager to accomplish the transition before the July 1 start of the fiscal year to avoid budgeting the non-net billable costs for another cycle. In addition, SEAPA wanted to start the one-year clock – mandated under the terms of the existing contract – running.

“Part of it was the deadline for termination, but since we recently passed that resolution, now it’s just a matter of taking care of the business end,” Acteson said. “Unfortunately we haven’t been able to get in and get our due diligence documents because there’s a business end that we have to make sure that all of the liabilities and contracts and insurance are taken care of and things like that.”

If the transition is handled ideally, local consumers won’t notice any difference in the wholesale portion of their monthly electric bills, Acteson said.

“With regard to the transition … there shouldn’t be any impact to rates,” he said. “I think it allows us to maintain our low rates. We have had steady rates for 17 years. I don’t think the rate-payers out there can put their finger on anything that’s cost the same for 17 years.”

In other business, the board briefly discussed, but took no action on,

altering the annual rebate structure currently in place. Wrangell alternate member Don McConachie suggested that if the Agency does seriously consider an end to rebates, it taper the rebates gradually rather than end them abruptly, which would allow utilities – and the boroughs that own and operate them – to plan for their demise. More discussion and action is expected for the Aug. 28 board of directors meeting in Petersburg.

The board also approved the 2015 fiscal year budget.


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