Electric ratepayers may have to cover repair costs as well

Posted: Thursday, April 24, 2008

Juneau's electric ratepayers won't only be asked to pick up the price tag for the diesel fuel being used to keep the city's lights on.

They may also have to pay for repairing the transmission line and electric towers that were damaged in last week's avalanche near the Snettisham hydroelectric project.

Alaska Electric Light & Power Co.'s general manager, Tim McLeod, said Wednesday that he estimates the repair cost for the seven transmission towers damaged or destroyed by the avalanche between Juneau and its main source of hydroelectric power will be about $7 million.

AEL&P, a private utility, is responsible for maintaining the Snettisham line and estimates it will take three months to repair the lines.

McLeod said the company can cover some of the repair costs with its reserves and will have to finance the rest.

The next time AEL&P applies to the state regulatory body to increase its rates, McLeod said the costs for replacing or fixing transmission towers will be incorporated as part of the company's depreciating assets, and consumers will be asked to pay for them.

McLeod added that the repair costs would be spread out over a long period and wouldn't have a large effect on electric rates. He said a detailed analysis was necessary to determine how much of an increase the repair costs would necessitate.

AEL&P may ask the Regulatory Commission of Alaska, the state body that oversees utility companies, for a rate increase next year, McLeod said. Higher rates will be needed to offset the price of the new $60 million hydroelectric project at Dorothy Lake, he said.

McLeod said the Dorothy Lake project may come on line next year and will ultimately save Juneau's ratepayers money as energy demands increase and the company relies less on diesel fuel to generate power.

It's still too early to tell if the state would object to AEL&P's efforts to pass the repair costs off to its customers, according to Daniel Patrick O'Tierney, chief assistant attorney general for regulatory affairs and public advocacy.

O'Tierney said his office will take a look at any of AEL&P's rate adjustment requests and determine if it's in the public's interest to participate in any regulatory commission proceedings.

He added that it's the regulatory commission, which is made up of five Anchorage-based commissioners, that will have the final say if the repair costs come out of Juneau ratepayers' pockets.

"Ultimately, that's the commission's decision," O'Tierney said.

• Contact reporter Alan Sudermanat 523-2268 or e-mail alan.suderman@juneauempire.com.

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