AEL&P rate hike not retroactive

Posted: Thursday, May 08, 2008

Juneau electric consumers got a reprieve Wednesday when Alaska Electric Light & Power Co. received permission to delay charging residential customers 447 percent more for electricity until May 16.

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Brian Wallace / Juneau Empire
Brian Wallace / Juneau Empire

Previously, AEL&P asked the Regulatory Commission of Alaska to allow a rate of 52 cents per kilowatt-hour for electricity used, by some customers, up to 16 days before avalanches destroyed the Snettisham transmission lines and cut the city's cheap hydroelectricity. The commission approved.

Commission Chairman Tony Price said Wednesday's decision addressed "rate equity issues" raised in the previous plan.

"The latter date provides all customers the opportunity for a full month of conservation efforts," Price said.

Gayle Wood, AEL&P spokeswoman, said May bills were delayed to allow commissioners time to rule on the new tariff request. The utility asked for "expedited treatment," Wood said, in the hopes the commission could consider the request and issue a ruling in less than 24 hours.

Now, invoices mailed before May 16 will be calculated at the pre-avalanche rate of approximately 11 cents per kilowatt-hour to residential customers. Had the RCA not ruled quickly Wednesday, Wood said some ratepayers would have seen the higher rate tacked onto electricity used before the towers were destroyed.

Price said the RCA was aware of the timeline AEL&P faced. The ruling was squeezed in following a previously scheduled public meeting, he said.

Wednesday's announcement comes in stark contrast to statements made by AEL&P President Tim McLeod and several company vice presidents, who previously insisted that AEL&P could not avoid charging some customers retroactively because of the way the utility reads its meters.

"We have the funding in place to extend the billing cycle a few weeks," Wood said.

AEL&P is in a better position to forego immediate rate hikes because of financing and conservation measures throughout the city. The utility used less than half of the original estimate of 100,000 gallons per day of diesel to meet power needs.

In a press release issued late Tuesday, McLeod said, "Juneau consumers are rewriting the history books when it comes to energy conservation, and it's only fair that they not pay the higher tariff for electricity used before the avalanche."

The RCA last month approved an AEL&P request to increase rates to cover more than $8.9 million in fuel costs by adding more than 400 percent to each kilowatt-hour sold as far back as April 1.

Wood said she was not aware of any legal issues with the first emergency cost of power adjustment.

McLeod was not available Wednesday to comment about the legality of retroactively charging higher power rates.

Saying the emergency COPA filing was a first for the private company, Wood explained that in theory the original plan worked fine, but it was designed in the late 1990s, when diesel was $3 per gallon cheaper.

AEL&P worked with Anchorage tariff attorney Dean Thompson on the new filing.

McLeod said he asked for the delay to honor city conservation efforts that have reduced overall electrical use by 30 percent in the weeks following the city-declared disaster.

The new adjusted rate will be the same 52 cents per kilowatt-hour as previously approved, only the date will change, Wood said.

• Contact reporter Greg Skinner at 523-2258 or e-mail

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