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By Dan Rudy 

Swan Lake bond sale moves ahead

 

Dan Rudy/ Wrangell Sentinel

At the SEAPA Board of Directors meeting in Wrangell March 25, director of special projects Eric Wolfe discusses the control improvements for the Tyee dam turbine shutoff valve. Depending on the control improvement alternative selected, he explained the project could be completed as late as mid-October, depending on Tyee unit availability.

A project to improve storage capacity at Southeast Alaska Power Agency's (SEAPA) Swan Lake hydropower facility continues along with efforts to finance it with up to $11.36 million in bond sales.

Over the past month, SEAPA's

executive director Trey Acteson and general counsel presented updates on the planned expansion of the facility located northeast of Ketchikan on Revillagigedo Island. Each of SEAPA's three member utilities-Wrangell, Petersburg and Ketchikan- heard presentations on the expansion and the associated bonds.

The project will raise the dam at Swan Lake and increase its capacity by 25 percent. At present, cost estimates for the project put the total at $10 million, with completion expected by the end of 2016.

In meeting with local governments, Acteson requested they pass resolutions authorizing their appropriate officers to complete requisite bond documents and provide supporting information.

Wrangell's City and Borough Assembly approved such a resolution at its March 24 meeting. Similar proposals are expected to be discussed in Ketchikan and Petersburg this month.

Acteson also traveled to San Francisco to meet with two bond

agencies and a Standard & Poor's ratings agency.

"Those meetings went really well," Acteson recounted. He said SEAPA's bond rate may be upgraded due to its financial position, which could result in a lower interest rate. However, this may be contingent on the financial

information provided by member

utilities.

A final bond amount will be

confirmed at the SEAPA board's next meeting before an offering is finalized.

A licensing amendment for Swan Lake is still in its review process by the Federal Energy Regulatory Commission, following delays caused by litigation filed against the project. Without a license amendment construction cannot begin.

Made up of representatives of SEAPA's member utilities, the board of directors approved moving ahead with the Swan Lake bond sale during its monthly meeting at Wrangell's Nolan Center March 25 and 26.

In his monthly report, Acteson also noted revenues for FY15 through February are $1.15 million below budget, a 13 percent shortfall. This has been partially offset by lower administrative and operating costs of more than half a million dollars.

"We're watching that closely as we roll into the fourth quarter," he said. Acteson hypothesized the warmish weather this past winter played a factor in the shortfall, with less electricity usage needed for heat.

"Everybody should leave their

lights on," joked Kay Key. In her

financial report, she confirmed a year-to-date shortfall of sales of close to 17 million kilowatt hours, the bulk of that shortfall from Ketchikan power purchases.

During operations manager Steve Henson's report, he announced SEAPA has received U.S. Forest Service approval for an expected 105 service helipads, which will be installed around its infrastructure.

Henson expects 40 to 50 pads can be set up this year at a cost of $1.5 million, with the rest slated for next year. The total cost of their construction will amount to $3.3 million.

A bid for replacement of the Wrangell reactor was awarded to Electric Power Systems. This will supply 2.5 and 5.0 MVAR reactors to replace the existing 7.5 reactor. Ninety-percent construction drawings have been received and approved, and delivery of the units from Finland is expected by mid- to late-April.

SEAPA will be relocating its operations manager position to Wrangell from Ketchikan, citing efficiency benefits.

"I think it's a good move at this time," Acteson explained.

The board also discussed looking into possibilities for developing future engineers, either through establishing an internship or by working through member communities.

"I fully support bringing youth into the pipeline for future jobs," said Acteson, particularly local students.

"I'm in favor of that; I think it's a good idea," said Joe Nelson, Petersburg's delegate to the board.

Wrangell alternate Clay Hammer expressed support for launching a public relations campaign aimed at reaching out to high school students on the benefits of engineering careers.

"That's the time to get these kids thinking of this stuff," he said. Acteson said he would look into it, bringing back some ideas before the next budget cycle.

Work has begun on the SEAPA's annual shutdown maintenance schedule. In conjunction with normal transmission line inspection and tower climbing transformers will be tested at all locations in the SEAPA system, with infrared surveys performed at the plants and substations along with the transmission line.

 

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