Water from Crystal Lake on southern Mitkof Island drops down this penstock to a generator at Blind Slough. That equipment will be overhauled in 2023, paid for by customers at Petersburg Municipal Power and Light. (Joe Viechnicki/KFSK)

The cost of electricity in Petersburg will be going up twice in 2022. Petersburg’s borough assembly Monday approved the final reading of electrical rate hikes that will pay for renovations and replacements of the local and regional electrical grids.

The cost of power will be going up a total of 19 percent combined for increases now scheduled for January and July. It’s the result of a rate study by a private consultant completed earlier this year.

On a radio show Monday, assembly member Dave Kensinger noted the rate hike is mainly to pay back bond debt for an overhaul of the borough’s Crystal Lake hydroelectric plant. Voters approved that project in October.

“I think everybody understood it that by letting Crystal Lake go away it was going to end up costing us more money in the long run,” Kensinger said of that vote. “Nobody likes to pay more on anything. Twenty percent sounds like a lot but we have had very reasonable electric rates for a long time and I guess it’s just time to start paying more.”

The rates customers pay vary depending on how much electricity they use. But as an example, an average residential customer will see an increase of around 15 dollars a month in January and another 15 dollars in July, for a total increase of around 30 dollars a month. A small business will see an electrical bill grow by around 70 dollars combined from those two rate hikes. A larger commercial customer’s bill will go up over $1200 a month from the rate increases.

The additional revenue to Petersburg Municipal Power and Light will also repay the cost of an additional standby diesel generator. And it will pay for increases in the wholesale cost of electricity charged by the Southeast Alaska Power Agency. The SEAPA board this month approved a rate hike for replacing a failed submarine transmission line and paying for future replacements on the regional electrical grid. Petersburg’s utility director and alternate on the SEAPA board Karl Hagerman told the assembly that additional wholesale rate hikes are likely.

“We’ll just see. I think the CEO does a great job of withholding and increases or discussion of any increases until he knows for certain that they will occur or that they’re needed,” Hagerman said. “And so we as a board will be discussing that in the next couple meetings and try to determine when that next rate increase may come and how much it will be.”

Again that’s on the wholesale cost of power, what Petersburg Municipal Power and Light pays for the electricity. And wholesale increases have been figured into the local rate hikes approved unanimously by the assembly Monday. The assembly also voted to add language that will allow the local utility to increase the cost of electricity if Petersburg’s access to SEAPA power is lost for an extended period, beyond the annual downtime scheduled for maintenance on the system. That additional charge would help cover the cost of fuel, oil and staff overtime to  power the town on diesel generators.