Businessmen look to keep AEL&P locally run, city supports idea

City drafts letter in favor of AEL&P being owned locally

Alaska Electric Light and Power Company Lemon Creek operations center in Juneau on Wednesday, July 19, 2017. AEL&P’s parent company Avista is in the process of being sold, and some Juneauites are looking to have AEL&P run locally again. (Michael Penn | Juneau Empire)

Juneau’s electric utility is set to change hands in late 2018, but some in Juneau are looking for a way to keep it under local control.

 

Avista, which is the parent company for Juneau’s power company Alaska Light Electric &Power (AEL&P), is in the process of being bought by Canadian energy company Hydro One. The sale is expected to close in late 2018, according to an announcement in July.

The two heads of Juneau Hydropower — President and CEO Keith Comstock and Managing Director Duff Mitchell — have expressed interest for the past few years in ensuring that AEL&P stays locally run. They sent a letter to Avista in 2016 to inquire about Avista’s interest in selling AEL&P (Avista declined) and are now looking to do the same with Hydro One.

Mitchell said Tuesday that he and Comstock aren’t necessarily going to push for the two of them to run the utility, but more for Hydro One to consider relinquishing control to someone local.

“The first premise and the first goal is local control, local direction, whatever that is,” Mitchell said. “That’s the key, a local energy destiny, that the decision making is local.”

In trying to set up a meeting with Hydro One, which the Canadian government partially owns, Comstock and Mitchell figured they would benefit from having the approval of the City and Borough of Juneau. They met with Mayor Ken Koelsch and a couple Assembly members including Debbie White.

At Monday’s CBJ Assembly meeting, White presented a rough draft of a letter that is to introduce Comstock and Mitchell to Hydro One President Mayo Schmidt. Some Assembly members, including Maria Gladziszewski, were surprised by the presentation of the letter, as she said was wary to present the letter as if Comstock and Mitchell were representatives of the city itself.

The initial draft of the letter read that Comstock and Mitchell would “lead the initial efforts for the City and Borough of Juneau regarding our community’s energy future.” City staff reworked the letter Tuesday and omitted the aforementioned line, making no mention of a connection between the city and the two businessmen.

“We have a community interest in exploring the possibility of placing these assets under local Juneau control and ownership in a mutually beneficial manner to you, the shareholders of Hydro One and our community,” the letter, which is signed by City Manager Rorie Watt, now reads.

The city sent a finalized version of the letter to Comstock and Mitchell, who will send it to Schmidt as an introduction. Comstock and Mitchell are hopeful that Schmidt will want to meet with them about the possibility of relinquishing AEL&P to local control.

Deputy City Manager Mila Cosgrove said Tuesday that she and city staff took the thoughts of the Assembly members into account as they drafted the brief letter. The Assembly consensus Monday was that local control of AEL&P would be a boon for Juneau’s economy, and pursuing the possibility should be a priority.

Juneau Hydropower has been in the works since 2009 but has yet to get off the ground. It’s dependent on a hydropower facility at Sweetheart Lake that has yet to be built, as is Comstock and Mitchell’s other venture, Juneau District Heating. Comstock said the process toward getting the Sweetheart Lake facility built is moving along slower than hoped, but that they knew the project would take a long time.

Comstock also added that he and Mitchell have talked with financial backers, and that if Hydro One were interested in selling to them — just a hypothetical at this point — they would be able to get the funding.

The road to a meeting with Hydro One starts now. The city’s letter, which is just three short paragraphs, serves as an introduction between the two businessmen and Schmidt. Comstock and Mitchell agreed that having the city introduce them is a good starting point.

“There’s a high level of credibility by having something by the CBJ just an exploratory letter and a letter of introduction,” Mitchell said. “That’s all it does, is allows us the opportunity to get to that perhaps first meeting so that we could sit down and if there is interest, then what are the options?”

 


 

• Contact reporter Alex McCarthy at alex.mccarthy@juneauempire.com.

 


 

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