State regulators approve emergency electricity rate increase

Posted: Tuesday, April 29, 2008

Though the Regulatory Commission of Alaska's Consumer Protection Section received at least 100 informal comments or questions related to a recent spike in the electricity rate, the regulators are not investigating any of them.

State regulators on Friday approved an emergency rate increase that would quintuple residential Juneau electric bills for May. The first bills go out May 2.

Alaska Electric Light & Power Co. requested the increase April 22. On April 16, avalanches wiped out the Snettisham line that wired cheaper hydroelectric power to Juneau and forced the utility to supply the city with diesel fuel.

The emergency cost of power adjustment, or COPA, would pass to electric bill payers the cost of diesel from April 16 to May 30 - $9 million total for 2.4 million gallons at $3.81 a gallon - by tacking on 43 cents per kilowatt-hour.

The utility's estimate reflected an assumption that customers would cut their post-avalanche electricity usage by 20 percent, as they did starting several days before the filing.

A household using 1,000 kilowatt-hours a month would see its May bill increase to $561 from $127, according to AEL&P's filing.

AEL&P's filing only asks for an increase based on fuel costs. It does not include the cost of repairing the lines, which AEL&P has said may be passed to customers later.

RCA's consumer protection office can investigate complaints about how the utility companies' bills are collected - for instance, if a mysterious extra fee were to appear on a bill.

"Once the tariff rules and their terms and conditions are in effect, we make sure they're not violating their own rules," said Grace Salazar, head of the consumer protection office.

But Salazar's office does not look into whether the rates themselves are appropriate, which is what many people have complained about.

A tariff is not a set rate; it's a filing procedure a utility uses to change how much it charges customers. In this case, AEL&P is filing under a tariff it worked out with the RCA in 1997. That process included opportunities for public comment.

The commission looks at the numbers AEL&P files - in this case, the cost of fuel and the number of kilowatt-hours it estimates needing. Regulators must approve the increase if the utility has filed under the rules of its tariff, Salazar said.

The simplicity of that decision is why - as usual for COPA filings - the RCA didn't take formal comments from the public on the approval, as Juneau legislators requested in a letter last week to the commission.

Moreover, the current tariff doesn't give the commission the power to investigate the numbers behind a COPA filing just because the rate increase is particularly high, according to RCA Commissioner Mark Johnson.

"We're not in the business of reviewing their prognostications," he said.

He said any closer looks into how AEL&P estimated its costs could only be initiated by a formal filing with verifiable facts.

"The commission does not act on the basis of speculation," he said.

Such formal filings can be difficult to prepare, said Jim Sykes of the Alaska Public Interest Research Group, an Anchorage-based nonprofit that has filed with the RCA.

"You don't have to be a lawyer to file them, but it doesn't hurt," he said.

But he said people should keep speaking up.

"If people need to air their gripes, they need to air them wherever they think they're going to get some action," he said. "I haven't known the people of Juneau to be meek."

• Contact reporter Kate Goldenat 523-2276 or e-mail

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