City of Seward, Council, Featured

Seasonal Electric Rates Discussed at September 11th City Council Meeting

Seward’s City Hall on a rare sunny September day, Seward flag visible against the skyline. Photo: Kelley Lane
by Kelley Lane for Seward City News-

City Council met on a glorious Monday night, a day of sunshine after nearly a month of daily downpour. The main topic of the evening was discussed prior to the actual meeting during a Work Session on electric utility rates. Electric rates will be part of the budget that is being built by City Council members for the budget years 2018-2020. Mike Hubbard, of the Financial Engineering Company, gave a presentation that answered a number of questions and analyzed whether the seasonal rate structure has been effective financially. The electric pay rate structure was changed for the years 2016-2017. It dictates that rates are lowered 25% during the six winter months and raised by 25% during the six summer months. Hubbard determined that this pay structure creates a difference in annual payments of only $2 per average household, a negligible amount.

Another question that pertains to determining electric utility rates was overall usage. Hubbard reported that sales have seen a gradual decline over the last two years. This is likely due to greater energy efficiency of users, as well as a decline in industrial usage, according to a previous analysis by Assistant City Manager Ron Long. This decline in usage has resulted in less revenue for the electric department, while base costs remain constant. Hubbard volunteered that industry wide, many utilities are “trying to transition to higher base costs because most costs are fixed costs.”

Tim McDonald asked whether the current rate structure has taken into account that “sixty percent of residences close in winter?” during the citizen comment portion of the Work Session. In response, Council responded that seasonal disconnect costs may need to be readdressed. There was a quick pause to officially close the Work Session and transition to the evening’s Council meeting, which opened with the Pledge of Allegiance, followed by roll call and then Citizen Comments.

Susan Potter, of Seward, addressed Council with concerns about the recent dramatic increase of her electric utility bill. “If you are faced with a choice between feeding your family or paying your electric bill, what would you choose.” She further encouraged Council to think about whether costs could be trimmed. “With every budget, you have to figure out where you can cut back.” Mayor Bardarson responded that utility bills have increased lately due to the fuel surcharges being passed along by Chugach Electric. “We have no control over that,” she said.

Kenn Carpenter, Seward’s representative on the Borough Assembly, gave a report of recent happenings. The Assembly has moved forward on working to approve funding for more patrols on Kenai Peninsula roads, with $232,000 sent forward towards funding this initiative. The State of Alaska designated the Seward area as a Safety Corridor in 2006, due to the “higher than average incidence of fatal and serious injury crashes,” according to Alaska Department of Transportation’s website. “It’s an important corridor that’s not patrolled enough,” said Carpenter.

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The City Manager’s report was given by Jim Hunt, who said that discussion is continuing with the Army Corps of Engineers on assessing the Lowell Creek diversion tunnel. A few representatives of the Corps were in town the Tuesday prior, during a 2-3 inch rain storm in Seward, and were able to view firsthand the outflow from the tunnel. Hunt explained that the City of Seward’s Department of Public Works had been at the outflow area of the waterfall with heavy equipment that day, clearing gravel and boulders in order to keep the water flowing. “Around 4pm, the color of the water changed,” which Hunt explained was a sign that the water flow was blocked upstream. A few minutes later, the tunnel blockage cleared in a dramatic outflow of boulders. Hunt concluded “we do not want to take possession of the tunnel in a couple of years.” This was in response to an ongoing discussion with the Army Corps of Engineers about the previous agreement for Seward to take possession and become responsible for the tunnel’s maintenance within a previously agreed upon timeframe. (As an aside, the Seward Museum, housed in the same building as the Library, currently has a photo exhibit on display in its windows on what Seward looked like prior to the Lowell Creek Tunnel, which helps explain why the Tunnel came to be.)

Seward’s City Council Chambers with Monday night’s meeting in progress, including L to R: City Manager Jim Hunt, Council Members Erik Slater, Deborah Altermatt, Ristine Casagranda, Mayor Jean Bardarson, Council Members Marianna Keil and Sue McClure.

John Foutz, the City of Seward Electric Utility Manager, addressed a few of the concerns about electric rates raised earlier in the meeting. He explained that currently there is not a way for electric customers to opt out of the seasonal utility rates. “We could allow for that.” In previous meetings, Council has discussed the hardship of highly variable rates for customers on fixed budgets and incomes. Foutz further encouraged customers with questions about their utility bill to request a review of their bill by visiting the City’s utility counter. This could help with comprehension of the often confusion seasonal rate structure. “I’ve done that,” said Jim Hunt, “and it was very helpful.”

The evening’s meeting concluded prior to 8pm, a surprisingly short meeting. Council Member Casagranda thanked those who have volunteered to help with the upcoming election, which will take place on October 3rd. Council Member Slater encouraged people to be “bear aware out there,” commenting on the recent visitation by black bears around the town of Seward, including at his business in the Seward Harbor. The meeting transitioned to executive session to review applications for the City Clerk position, available due to current City Clerk Joanna Kinney’s upcoming departure, scheduled for October 9th.

The next City Council meeting will be held on Monday, September 25th at 7pm. It will be preceded by a Work Session at 5:30pm to collect and discuss ideas on what to do with the vacant Army Rec Camp located on the Seward Highway within the City limits.

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