The Wrangell Borough Assembly approved a plan Tuesday for the light department to fix its power distribution system over the next six years without raising electric rates.
Last year, a study revealed deficiencies in Wrangell’s power distribution system and the need for additional backup diesel generation.
Electrical Superintendent Clay Hammer asked the assembly to approve an electric rate study to help determine if Wrangell Light & Power is financially ready to address those problems. The borough assembly rejected his request for a rate study in November in order to avoid any rate increases.
On Tuesday, borough staff presented a plan that sets out financial goals and a work schedule to complete one project in each of the next six years. If Wrangell Light & Power fails to meet its cash goals at the end of each year, the department can come back to the borough assembly to discuss potential electric rate increases.
The first project on the list is fixing the substation behind the power plant. That is expected to cost about $180,000, and the Southeast Alaska Power Agency has agreed to pay half.
The electrical department will go on to repair the distribution systems on Church Street, Cow Alley and Case Avenue. The last project on the list is adding more backup diesel generation.
Borough Manager Jeff Jabusch said this plan is meant to work without a rate increase, but he said there is a risk to waiting six years to implement additional diesel generation.
“If you had a winter where you had zero-degree weather for a while, [and] you had a lot of people on electric heat, [if] Tyee goes down, we would be hard pressed to meet everybody’s needs,” Jabusch said. “That is the risk, and it’s important everyone knows that.”
Jabusch said a rate increase would be necessary to get additional generation sooner.
The last time electric rates were raised was in July 2014. That was a 7 percent increase.