Seward voters reject electric utility sale by 7 votes

Seward City Hall
Today, Seward’s electric utility is owned by the city. It tried to sell the utility in 2000 and 2002, though both attempts failed. (Sabine Poux/KDLL)

For the second time, voters in Seward narrowly rejected a sale of their city-owned electric utility to Homer Electric Association, this time by just seven votes. After the city tallied its absentee votes today, the proposition fell short of the 60% threshold needed for the sale to pass.

The special election came after months of campaigning from the City of Seward and HEA, both of which said the sale would be a good thing for customers and put downward pressure on rates. Seward officials said without the sale, they’d have to raise rates significantly to pay for infrastructure upgrades and deferred maintenance projects.

A majority of in-person and absentee ballots both were in favor of the $25 million sale.

But Seward city code required a 60% approval for the sale to go through. Of the 389 votes cast, 227 were in favor of the sale, bringing the yes total to 58% — just seven votes shy of the threshold.

That’s out of 1,765 registered voters in Seward city limits. Seward Electric Association members outside Seward city limits were not eligible to vote on this proposition.

“It’s kind of like – when it’s this close, you don’t really feel that the people had spoken,” said Seward Mayor Sue McClure after the canvas board meeting Thursday. “It’s not resounding one way or the other.”

McClure said there are council members who want to keep pushing for a sale, or another vote. But she said she’s not sure what they can do.

This is the second time since 2000 that Seward has put the question of a sale to voters. Last time, it also had a majority ‘Yes’ votes but fell short of the 60% threshold — that time, by 61 votes, or just 8%.

But unlike this vote, the last one was more of an advisory vote, to gauge interest in a potential sale. This time, Seward and HEA had already agreed on the terms of a contract.

At council meetings, city residents said they took issue with the Seward City Council’s choice of utility. The council had also considered a bid from Chugach Electric Association, the utility for Anchorage and parts of the northern Kenai Peninsula

Ahead of the sale, copies of a two-page flier on Chugach letterhead dated April 2023 appeared around town, outlining the terms of the sale Chugach had proposed, and taking issue with the timeline of the bidding process. The flier also laid out graphs comparing Chugach and HEA’s rates, which are, on average, lower for the Anchorage utility.

Representatives from Chugach and Homer Electric could not be immediately reached before airtime.

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