Last week I attended a talk where AEL&P Manager Tim McLeod explained the increased electric rates. Before the talk, a friend leaned over and whispered sarcastically, “This is really going to be enlightening.” Well, it was — sort of. Tim explained that AEL&P was good and efficient and that the rates are set by a formula and are completely justified. He didn’t get into the numbers or anything — just showed some graphs. I guess you don’t need numbers. They are what they are and you just plug them into the Regulatory Commission formula to get the rate.
Still, I had some questions. I recalled that a big part of the increase was a $21 million cost overrun on construction of the Lake Dorothy hydro project. I heard that the project was delayed over protecting some transplanted fish and an eagle tree. I asked how much all this stuff (I called it something else) cost AEL&P. He said, “Not much really.” No big deal. He allowed there was a problem when the eagle laid an egg and the project had to be shut down for some months. He said they kept busy with other things. I can’t imagine it was make-work with salary and inflation clocks running — at least he didn’t say so.
But I’d heard that one contractor had gone broke trying to protect the eagle tree and that a second contractor came in and blasted it, paid a fine, and got on with the project, so I asked about this. Tim said that wasn’t right at all. He explained that despite herculean efforts to protect the tree, a freak rock from a blast hit the nest and knocked most of it down. But it still had to be protected, because there was a bit of nest left. But then a second freak rock slid down the hill and knocked the whole tree down. It was a bad accident, to be sure, and they had to pay a fine.
Now from my understanding, the $21 million overrun was in substantial part a result of delays. Sure, AEL&P gets to plug the $21 million into the rate formula — and they should. But realistically, this is a problem that hundreds of Juneauites who own a skiff and a chainsaw could have solved in an afternoon for a lot less than $21 million — probably less than a month of rate increases. A bureaucrat with a lick of sense — if there is such a thing — could have solved it for less too. But that’s not to be. That’s not even to be suggested. As they say in the movies, ‘that would be wrong.’
So how does this nonsense happen? Here’s my guess based on limited experience. You have some decision-makers sitting around a table. On one side you have some GS-12 who works for the US Fish and Wildlife Service and exercises the sovereign power of the United States Government and knows full well what that means. On the other side you have a utility company that gets to pass on any cost to its hapless customers, who of course aren’t at the table. The GS-12 orders an outlandish action and the utility says, “Yes sir.” And why shouldn’t they. It’s no skin off their nose. And next time they put a power pole in a mushy spot along the road, they don’t want a hard time from this guy — better to go along, get along.
Juneau can’t send the bill for this stupidity to the GS-12 or to the USFWS and, quite frankly, it wouldn’t be right to send it to AEL&P since they just played by the rules. (Full disclosure: I love AEL&P because they loaned me a big wire crimper when I couldn’t find one to rent.) Juneau needs to accept that this is the way it is. If you like a clean environment this is the way it has to be — or so I’m told. If you like regulated utilities, then this is it. So if you like your rate increase, go hug an eagle tree, environmentalist or bureaucrat. If you don’t, then just buck up.
• Twelker is a Juneau resident who used to be an environmental lawyer.