AEL&P shelves natural gas hopes, but still promotes energy efficiency

Natural gas isn’t coming to Juneau anytime soon, and that has Alaska Electric Light &Power President Tim McLeod “disappointed,” he said at the Juneau Chamber of Commerce luncheon Thursday.


The reasoning for shelving the natural gas project, McLeod explained, was largely financial. AEL&P’s parent company, Avista, put in a great deal of time and effort researching the possibility of bringing natural gas to the area and determined that it would cost around $170 million. Due to factors such as interest rates and the state of Alaska’s economy, McLeod acknowledged, “it’s not an easy time to come in and spend $170 million.”

Despite that disappointment, however, AEL&P is still looking for ways to keep costs down and keep Juneau’s energy usage as efficient as possible. Both McLeod and Director of Energy Services Alec Mesdag spoke optimistically about the future of energy usage in Juneau during their presentation, entitled “Energy for Juneau for 124 Years &Counting.”

“Even though natural gas won’t be coming to Juneau in the near term,” Mesdag said, “there are still a lot of opportunities that we have in Juneau to improve how we source and consume energy. In many ways, we’re still in a very good position.”

In his presentation, Mesdag outlined a series of concepts that AEL&P has focused on in recent years to increase efficiency. These include investing in energy-smart heat pumps and promoting the purchase of electric vehicles. Mesdag had a series of tips as well, asking locals to look more at installing programmable thermostats, better insulation and caulking and switching to low-flow faucets and shower heads. Though one Chamber member made a joke about not wanting to install the low-flow shower heads, many on hand were appreciative of AEL&P’s efforts to increase efficiency while keeping prices down.

As Mesdag’s portion of the presentation explained, AEL&P’s rates — currently under 12 cents per kilowatt hour — are the lowest of the largest regulated utilities in Alaska and are just below the national average. The company has recently requested a slight rate increase from the regulatory commission, which will move rates just above 12 cents per kilowatt hour.

“If the full rate increase is granted,” Mesdag said, “we will be just marginally higher than national average. Of course, by the time that actually occurs, one year from now or just under one year from now, the rates of the national average will likely have increased also and may still be higher than what we pay here.”

In all, Mesdag and McLeod were very hopeful for the future of keeping energy efficient — both environmentally and economically — in Juneau. They were both looking forward to the possibility of bringing natural gas to the area, with Mesdag saying afterward that natural gas would help lower and stabilize energy costs and would force the company to replace inefficient current equipment, namely old oil tanks.

McLeod, the company’s president since 2002, didn’t totally rule out the possibility of natural gas making its way to Juneau at some point.

“If conditions change down the road,” McLeod said, “then we’ll take another look at it, and Avista has committed to do that. All the information, all the investigative work they’ve done, it’ll be useful years from now.”


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