The Southeast Alaska Power Agency board decided Monday to postpone reimbursement to Petersburg and Wrangell for their diesel generation costs this winter.

Because of a regional drought and low lake levels, the two communities went on month-long diesel campaigns, starting in February, to supplement their hydropower. That’s a rare move for those communities, which usually have enough hydropower from Tyee Lake to carry them through dry times. However, last summer, SEAPA sold some of Tyee’s hydro to Ketchikan, which also is experiencing drought and extended diesel campaigns.

The SEAPA board agreed to pay for the additional costs incurred by Petersburg and Wrangell, saying the agency oversold energy to Ketchikan Public Utilities. SEAPA says that power should have been dedicated to the northern communities.

The numbers now are in, and SEAPA will end up paying $841,785.38 to the two communities for fuel and operator overtime costs. That cost is minus the 6.8 cents per kWh towns normally pay for hydropower from Tyee and Swan Lakes.

However, at a SEAPA meeting this week, the board of directors stalled on the reimbursement.

SEAPA CEO Trey Acteson recommended the delay, saying the move first should be cleared with auditors. Though SEAPA issues annual rebates to the three communities, he says this payment is something totally different.

“That’s a little bit difficult to reconcile for us in trying to figure out how that works, how that potentially gets reported,” Acteson said. “I don’t know that yet. That’s still a little unclear to me. ”

Board Member and Wrangell City Manager Lisa Von Bargen says she’s fine with the wait, but hopes staff tells auditors that the payment needs to go through.

“I want to make sure that we’re going to get to a point with the auditors that the payment be possible,” Von Bargen said. “What I don’t want is us going to the auditors for a reason not to make the payment.”

Acetson says the agency will take a financial hit for the reimbursement. He doubts communities will receive rebates in the near future. SEAPA also likely won’t pay into its fund for replacement and repair projects.

Board members say they hope to finalize the reimbursement by the end of the fiscal year.