Hydro One, Avista travel to Juneau to try to ease concern about future of AEL&P

Officials try to ease worries about foreign intervention of utility company, rates, future of AEL&P assets

On Thursday, members of the public and the city’s government had their chance to ask questions directly to representatives involved in the sale of Juneau’s electric utility.


Canadian utility Hydro One is in the process of purchasing Avista Corp., a Washington-based company that owns Alaska Electric Light &Power. The Regulatory Commission of Alaska (RCA) is currently considering Hydro One’s application.

Hydro One CEO Mayo Schmidt was available for questions Thursday, along with AEL&P President Connie Hulbert, Avista CEO Scott Morris and Avista President and Chairman of the AEL&P Board of Directors Dennis Vermillion.

Schmidt and Hulbert did most of the talking during the public session that took place at the Juneau Arts and Culture Center, ensuring that if the sale goes through, business will still continue as usual for AEL&P.

“The only change you’ll effectively see is that I’ll be on the board of directors of Avista,” Schmidt said. “That’s it. No other changes.”

About 40 people showed up at the hour-long public event and the Committee of the Whole members were also able to ask questions for almost an hour and a half in the afternoon at City Hall.

A few of the same questions were raised at both events. People have been wary about giving their money to a foreign company (which is also 47 percent owned by the Province of Ontario), of their rates rising and of the federally-funded Snettisham hydroelectric project falling into the hands of the Canadian company.

Schmidt said the Province of Ontario is merely a shareholder, not involved with managing the company. The province has been selling its shares over the years, he said, including a sale that was finalized this month that sold more than 14 million shares from the province to 129 First Nations in Ontario.

Hulbert has said multiple times that rates won’t rise, saying that the RCA sets rates and goes through an exhaustive process to do so. She repeated this again Thursday, ensuring attendees that the AEL&P goes through the RCA, not Avista, to request rate changes.

“If there are changes, it will be led by Connie and her team,” Morris said. “It’ll be based on their decision about how best to operate their utility with us supporting them.”

The Snettisham hydroelectric project 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, as Hulbert explained Thursday. When the bonds are paid off (something expected in 2034), AEL&P may buy Snettisham on the cheap.

Hulbert said there are numerous protections on Snettisham, including the fact that the RCA has to approve the sale if it ever happens.

Assembly member Rob Edwardson said he found the question-and-answer session very valuable, and posed a question to Schmidt that others have wondered as well: If Avista and its subsidiaries will carry on as normal, what does Hydro One have to gain in this?

Schmidt said the purchase helps to diversify their assets, and that his company can learn more about how other utility companies use technology and new approaches to supplying energy. For AEL&P, Hulbert said her small staff of 62 can use the resources of much larger companies in Avista and Hydro One instead of having to pay for outside help.

As far as what Avista gains, Morris said, he’s seen a trend of more and more utilities consolidating across the country and the world. Combining forces with other utilities seems to be the way to do business these days, he said.

“We certainly could have waited,” Morris said. “There’s no reason why we had to find a partner, but I think with the trends happening with the industry, it was a matter of time.”

• Contact reporter Alex McCarthy at 523-2271 or alex.mccarthy@juneauempire.com. Follow him on Twitter at @akmccarthy.


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