The Petersburg Borough Assembly approved a letter requesting the Southeast Alaska Power Agency (SEAPA) to consider reducing its wholesale power rate to member communities in lieu of issuing annual rebates.
According to a letter written by Vice Mayor Cindi Lagoudakis, “While we appreciate the annual wholesale power rebates from SEAPA, it is increasingly difficult to factor them into the budgeting process.”
The letter goes on to state that SEAPA has taken no action despite community delegate requests that the rate be lowered.
The letter states the average wholesale power rate for the past there years has been 6.13 cents per kilowatt-hour with rebates as opposed to 6.8 cents without them.
“The agency now has enough history to accurately predict its financial performance, so that a modest lowering of the rate would not adversely impact the on-going operations, and would be sustainable,” the letter states. “There would be no need to 'yo-yo' rates.”
SEAPA CEO Trey Acteson said the rebates actually help reduce the “yo-yo” effect of rates.
“They’re making that assumption and I don’t think that that’s necessarily true,” Acteson said. “There are some unknowns out there that the letter doesn’t clearly identify.”
Acteson said legislative support for capital projects, for instance, is one unknown and that rates may need to be adjusted based on SEAPA financing of those projects.
A SEAPA project at Swan Lake is estimated to cost 13.3 million and SEAPA is waiting to see if the Alaska House of Representatives will approve the 25 percent funding that is slated in the senate budget.
“Those types of unknowns have to be dealt with as they materialize,” Acteson said. “Rebates are more appropriate.”
Rebates are, in the end, determined by the SEAPA board of directors who issue rebate decisions based on SEAPA's relative cash reserves.
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