Rep. Don Young concerned by proposed sale of AEL&P to Canadian firm

Snettisham hydro project should not be included in transfer, he says

Update: The full AEL&P response has now been published.

 

Alaska’s lone delegate in the U.S. House of Representatives says he’s concerned about the proposed sale of Juneau’s electric utility to a Canadian firm.

In a public letter to the Regulatory Commission of Alaska, Rep. Don Young, R-Alaska, said approving the sale “constitutes a serious breach of public interest and congressional intent.”

Young’s concern is about a purchase option held by Alaska Electric Light and Power for the Snettisham hydroelectric project. Snettisham is owned by the Alaska Industrial Development and Export Authority, but it is managed by AEL&P. Snettisham was built by the federal Alaska Power Administration but sold at a discount by the federal government to AIDEA in 1998. AIDEA sold $100 million in bonds to buy the project, and AEL&P is paying for those bonds with proceeds from power sales. When the bonds are paid off (something expected in 2034), AEL&P may buy Snettisham for one dollar.

Ontario-based Hydro One is acquiring Avista, parent company of AEL&P, and that arrangement would go along with the deal.

In his letter, Young said he is concerned that Hydro One could use AEL&P’s equity in the hydro project for Canadian benefit. Since the federal government effectively subsidized the transfer of Snettisham, Young isn’t happy.

“I can (assure) you that it was never Congress’ intent that this asset be transferred for the potential profiteering by Canadian government interests,” Young wrote.

Young spokeswoman Murphy McCollough said by email that Rep. Young was contacted by constituents in Juneau who were concerned about the sale. She added that Young wants to ensure that a federal project intended to benefit Juneau will continue to do so.

Connie Hulbert, the president and general manager of AEL&P said by phone Monday that the company intended to file a response to Young’s letter by the end of the business day.

She said there are regulatory protections in place to prevent Young’s scenario from coming to pass, and that AEL&P will continue to be controlled locally.

“Nothing is really going to change with the operation of AEL&P,” she said.

She pointed out that in 1998 some Juneau residents had different but similar concerns about the transfer of Snettisham from the federal government to the state and AEL&P. At that time, the City and Borough of Juneau signed an agreement with AEL&P that requires the benefits of Snettisham to be preserved for the CBJ. In addition, the CBJ has right of first refusal if Snettisham is sold: The city may buy the power plant if AEL&P acquires it and tries to sell it.

Hulbert said AEL&P’s rates will still be regulated by the Regulatory Commission of Alaska, regardless of circumstances, and so will Snettisham — AIDEA is itself a utility under RCA regulations.

The RCA is continuing to take public comments on the acquisition of AEL&P by Hydro One. The public comment deadline is Dec. 21. As of this writing, three people other than Rep. Young have submitted comments. All three have been in opposition.


• Contact reporter James Brooks at james.k.brooks@juneauempire.com or call 523-2258.


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