AEL&P pledges not to purchase Snettisham unless it benefits ratepayers

Agreement with CBJ looks to protect rates, reliability of service

The damming of Long Lake south of Juneau allowed for the construction of the Snettisham Hydroelectric project in the 1960s, which has provided low-cost power to the state capital ever since. A pending sale that could allow the dam to become owned by a Canadian utility is drawing objections from across the state and its lone U.S. Rep. Don Young. (Photo/Courtesy/Alaska Industrial Development and Export Authority)

After three weeks of negotiations, the major parties involved in the purchase of Juneau’s electric utility pledged to not purchase the Snettisham Hydroelectric Project unless it benefits the ratepayers.


On Feb. 5, the City and Borough of Juneau Assembly agreed to enter negotiations with Alaska Electric Light &Power officials in regard to community concerns about the purchase of AEL&P’s parent company. In July 2017, Canadian power company Hydro One announced its intent to purchase Avista Corp., a Washington power company that owns AEL&P.

Dozens of Juneau community members have expressed concern about Hydro One’s intent to purchase Avista, and more than 100 comments have been sent to the Regulatory Commission of Alaska as it evaluates Hydro One’s application.

One of the main arguments against Hydro One acquiring AEL&P is the future of the Snettisham Hydroelectric Project. The project is currently owned by the Alaska Industrial Development and Export Authority (AIDEA), but managed by AEL&P. Bonds on the hydroelectric project are expected to be paid off around 2034, and once the bonds are paid off AEL&P can buy the facility on the cheap.

According to a memo from City Manager Rorie Watt, representatives from AEL&P, Avista, Hydro One and the Snettisham Electric Company will agree to not purchase Snettisham “unless doing so will provide overall net benefits to AEL&P customers.”

The idea of “net benefits” is outlined in the memo. In this agreement, a benefit would mean lowering rates, improving the reliability of electric service or a combination of those two factors. To purchase Snettisham, AEL&P would have to get approval from the RCA, the agreement says.

In a statement Feb. 9, RCA commissioners stated that they will not be considering the future of Snettisham as they examine Hydro One’s application. To purchase Snettisham, the RCA statement read, there will have to be a separate application to the RCA to determine whether it’s in the public interest to transfer ownership of the project.

Vice President and Director of Consumer Affairs Deb Driscoll said Friday that AEL&P could have already purchased Snettisham through the Snettisham Electric Company (a non-operating subsidiary of AEL&P created solely for acquiring the project down the line). Driscoll said the Snettisham Option Agreement granted the Snettisham Electric Company the ability to purchase the project any time after Aug. 18, 2003, but has chosen not to do so.

“AEL&P, Avista, and Hydro One all understand the importance of the Snettisham project to the community of Juneau and agree that the project’s benefits need to be preserved for Juneau,” Driscoll said in a statement. “In fact, AEL&P’s sister company (Snettisham Electric) could have exercised the purchase option any time during the past 15 years, but hasn’t done so because it would have increased costs to our customers. We remain committed to this approach, and we will only exercise the purchase option in the future if it is in the interest of our customers.”

Upcoming meetings

There will be a special Assembly meeting at 5:30 p.m. Monday at City Hall to discuss the negotiations, as well as whether to commit money to “intervening” in the RCA’s process. Becoming an intervener would basically mean that CBJ would have a say (through a lawyer) in the sale process.

At Monday’s meeting, the Assembly members will vote on whether to set aside $75,000 to pay attorneys to complete the intervener process. The meeting is open to the public.

Members of the public are also invited to meet representatives from AEL&P, Avista and Hydro One on Tuesday evening. The panel will include Connie Hulbert, President and General Manager of AEL&P; Dennis Vermillion, President of Avista; Ferio Pugliese, V.P. of Hydro One; and James Scarlett, V.P. of Hydro One. They will take questions at 6:30 p.m. Tuesday in the Miller Room of Centennial Hall.

Directly after that, the RCA will host a public conference (scheduled for 7 p.m.) in Ballroom #3 at Centennial Hall. The purpose of that conference is to receive comments and give Avista and Hydro One representatives a chance to respond to them.

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


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