City Will Wait on Changing Industrial Electric Rates

Wednesday, February 26 2014

Businesses and factories that get their power from the city won’t be seeing changes to their electrical bills anytime soon.

At their meeting last night, City Council went over the current rates, who’s using power and how much the city is earning on it. They had some concerns -- like about the big differences in how much revenue is supposed to come from each group of users, particularly industrial ones.

In his presentation to council, long-time consultant Mike Hubbard agreed that the rates will need adjusting down the line. In fact, he says if sales and rates stay the same, the city will start operating at a net revenue loss by 2016.

But Hubbard says they ought to wait on making changes until the fourth engine at the powerhouse comes online, so they can evaluate how it impacts demand for power.

"If we did the exact same numbers with the allocators next year -- the same amount of energy, the same amount of demand by customer class -- we’re going to come up with different answers," he says.

He says it’ll also make a difference whether the state allocates any funding for the fourth engine, as the city’s requested. Governor Sean Parnell didn’t provide that money in his budget proposal, but the legislature hasn’t finalized their version of the budget yet.

City Manager Chris Hladick and others went to Juneau last week to push Unalaska’s interests with the legislature. Along with money for the powerhouse, Hladick also asked lawmakers to ensure the state trooper patrol vessel Stimson remains in Unalaska. The state is considering moving the Stimson to Kodiak.

Last night, councilors passed a resolution supporting keeping the Stimson homeported in Unalaska. Hladick says it's basically the same resolution as one he wrote in 2002, the last time the state wanted to move the vessel. 

Council also passed a resolution officially requesting that the state Department of Transportation tear down the torpedo building next to the airport. Hladick says the resolution is basically the same as the one he wrote in 2002, the first time the city wanted the WWII-era structure removed. Hladick says the city has been working off and on to have the WWII-era structure removed since 2001. He says the building site is too full of environmental hazards to easily renovate or restore.

"It’s undergoing demolition by dereliction," he says.

Mayor Shirley Marquardt agreed that the building needs to go.

"It’s great having historical items and buildings of value in this community that tell the story of WWII," she says. "But when you have a building -- you can’t even really call it a building anymore -- a skeleton that serves absolutely no public purpose because it’s too dangerous to go into, and you can’t go around it, I don’t understand how that can be considered a national historic building that needs to be preserved."

Council also approved the city’s goals for fiscal year 2015 at their meeting last night. The list includes a focus on the city’s marketing and branding. The city also hopes to increase housing options for city employees. And they want to continue planning for infrastructure improvements in Captains Bay and elsewhere in town if oil development ramps up in future.

City council heard annual reports from the library and PCR advisory committees and the planning commission last night. Library committee members report that the public library is currently the number one library of its size in the state, and it’s performing in the top two percent of libraries nationwide.

The PCR committee say their biggest issue is lifeguard vacancies at the pool. They say they’re actively recruiting new staff members.

Council will hold a public hearing at their next meeting on a new budget amendment introduced last night. It incorporates a $3 million state Department of Environmental Conservation grant into funding for the water treatment improvement project. Chris Hladick said that’s another new project that could impact power demand, and another reason to wait to make changes to electric rates.

The next council meeting is on March 11.

CORRECTION: City Manager Chris Hladick wrote a similar resolution asking the state to keep the P/V Stimson homeported in Unalaska in 2002, not a similar resolution asking for the torpedo building to be torn down.

a local in town... on Thursday, February 27 2014:

has hydro-electric ever been considered as a power generating source here on the island? We seem to have plenty of water running off of mountains and hills around here. Why not harness it?

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