Power Sales Agreement
The Long-Term Power Sales Agreement ('PSA') is the chief governing document for the agency and its three member utilities, extending for a term of 25 years to 2034, beyond the maturity of the bonds (2028), and requires written consent of all members for termination.
Under the PSA, all members utilities are required to purchase firm power requirements (net of existing hydro projects in service prior to 1985 for Ketchikan and Petersburg) from the agency (unless the agency consents or cities are required to do otherwise by law), but are not committed to any minimum level of purchases nor are they obligated to pay for power not delivered (take and pay).
All power generated by the agency must be sold to the three member utilities. The agency is required to make power continuously available to the members, and no significant opportunity for wholesale sales of surplus energy exists regardless of the PSA, given the lack of connectivity to a regional power grid.
The net electrical requirements of Petersburg and Wrangell are significantly lower than the energy generation capability of the Tyee Lake project. With the completion of the Swan-Tyee Intertie in mid-August 2009, some of the surplus capability of the Tyee Lake project is used to serve loads in Ketchikan.