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Fairbanks utility seeks 95 percent rate hike for steam heat

Posted: December 20, 2013 - 12:02am

FAIRBANKS — The company that provides steam heat to downtown Fairbanks customers wants to nearly double its rates.

Aurora Energy is seeking permission from the Alaska Regulatory Commission for a 95 percent rate hike, the Fairbanks Daily News-Miner reported Thursday. Customers who now pay $10.50 per 1,000 pounds of steam will see that price increase to $20.45 if the rate increase is approved.

The company provides steam to downtown customers from its power plant on First Avenue through an underground network. Company president A.L. “Buki” Wright said in a Dec. 9 letter to the commission there hasn’t been a rate increase in 28 years, and the current rate only covers half of the cost of providing the service. The company also provides hot water to some customers, but isn’t seeking a rate increase and the commission doesn’t regulate that service.

“Our steam customers have received service that is not only priced substantially below the rates that similarly situated hot water customers pay, but is also far below our cost to serve them,” Wright wrote in testimony to the commission.

The company also says customer rates should reflect company risks, including aging infrastructure and the potential for greater environmental regulation.

It’s not the first time Aurora Energy has sought a rate increase.

The company in 2010 asked the commission to deregulate its steam heat service, and said it planned to double its rates over several years.

The following year, the Regulatory Commission of Alaska denied the request, saying Aurora Energy failed to provide details that there was no unreasonable difference between the steam heat rates and the unregulated rates hot water customers are charged.

Aurora Energy is seeking to implement the new rate on Jan. 23 on an interim basis while the commission decides.

Public comment will be accepted until Jan. 13 on the commission’s website, www.rca.alaska.gov. The reference number for this case is TA76-119.

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