Voters weigh in on future of Seward electric utility

This story has been updated with the latest results.

A majority of Seward residents on Tuesday voted in favor of the city selling its electric utility to Homer Electric Association, however, it is not yet clear whether enough voters across all ballot types will push that support above the 60% threshold needed to advance the sale.

Of the 320 ballots cast during Tuesday’s special election, about 58.1% support the sale of the city’s electric utility to HEA. A three-fifths majority in support, or 60%, of voters who participated, is needed for the proposition to pass and the sale to advance. Roughly 41.9% of voters who cast ballots Tuesday opposed the sale.

Also, nearly two-thirds of Seward voters said they support allowing the city manager to live outside of city limits. That measure, presented to voters as Proposition 2, directs the Seward City Council to codify a rule allowing the city manager to live within 10 miles of mile marker zero of the Seward Highway, which ends at the Alaska SeaLife Center. Proposition 2 needs a simple majority to pass.

The city is in the process of hiring a new city manager. Seward City Manager Janette Bower, who currently serves in the position, will take over as the City of Soldotna’s city manager later this month.

After polls closed on Tuesday, Seward City Clerk Brenda Ballou reported that there are still 75 ballots to be counted. Those votes could change the outcome of the results from ballots cast Tuesday.

However, even if every outstanding ballot was cast in opposition to Proposition 2, the votes in favor would still produce the simple majority needed for it to pass.

Snowy conditions

Seward residents braved a slushy snowstorm Tuesday as they headed to city hall to determine the fate of the city’s electric utility. At around 12 p.m., just over 100 people had cast ballots.

Mark Kansteiner, who was helping run Seward’s voter precinct at Seward City Hall, said around noon that turnout so far had been lower than he expected. He’s been helping run elections in Seward since 2008 and said turnout in city elections can vary from as little as 300 to as many as 700.

It’s hard to say whether or not Tuesday’s snowy conditions will affect turnout at all, Kansteiner said, because the election was only open to Seward residents who live relatively close to the voting precinct at city hall. He expected the amount of voters, though, to double by the end of the day.

“On an election like this, it’s hard to know,” Kansteiner said. “It started out as a one issue election … it’s really hard for us to even judge how many people are going to be here.”

Ballou said Tuesday that the city’s canvass board will meet Thursday and is expected to review the outstanding 75 ballots. Of Seward’s 1,765 voters, 51 people voted absentee in person and 12 people voted absentee by mail. The city also has six special needs ballots that will be reviewed and six questioned ballots.

Ballou said she’s expecting some ballots will be rejected by the canvass board, such as in a case of a ballot cast by a resident who lives outside of Seward city limits. Not eligible to vote in Tuesday’s election were residents of Lowell Point and Bear Creek which, though adjacent to Seward, fall outside of city limits.

Bite at the apple

When it comes to the question of whether or not to sell the city’s electric utility, Tuesday’s special election was not Seward’s first bite of the apple. An election was held in 2000 that posed a similar question. While a majority of voters supported the sale in 2000, the percent in favor did not meet the 60% threshold to pass the proposition.

Bower, who said Tuesday she was the first person in the city to cast her ballot, said she thinks the city took a better approach this time around. Rather than posing to voters just the question of whether or not to sell the utility, the city selected a buyer ahead of the election. Being able to say upfront who would buy the utility, she thinks, could make a difference.

HEA emerged as the most desirable interested buyer after the city put out a call for proposals from interested and qualified electric utilities in Alaska. HEA told the city that if it successfully acquires Seward Electric, it would change its name to Kenai Peninsula Energy Cooperative, Inc.

“HEA has pretty much lived here,” Bower said of the joint outreach between the cooperative and the city.

Regardless of whether voters support the sale or not, Electric Department General Manager Rob Montgomery said his goal was for them to have as much information as possible to make an informed decision.

“Seward is at a crossroads,” he said.

Among the advantages of selling, the city has said, would be more financial resources and rate stability, greater access to new utility technologies, more programs available for customers, customers becoming members of a utility operative, and regulatory oversight of rates and services.

By selling, however, Seward would lose out on the revenue it currently takes in from its electric utility, which spans about 3,000 meters. A key question for the city has been how it will recoup revenue lost, particularly from cruise ships that tap into the city’s network during the summer.

The City of Seward in recent weeks has conversed back and forth with city residents about the sale. Residents have questioned the consideration council members gave to Chugach Electric Association, who also sought to buy the city utility, and expressed concerns about proposed increases to their electric utility rates if the sale goes through.

If the vote to sell fails, Bower said the city will need to “regroup.” Montgomery said the city would continue services, but would do so “a little more expensively.”

Also on Tuesday’s ballot was the question of whether or not Seward should change its residency requirements for the city manager position. Currently, city code says Seward’s city manager must be a resident of Seward. The proposed changes would allow the city manager to live within 10 miles of mile marker zero of the Seward Highway, which ends at the Alaska SeaLife Center.

Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.