Cruise ships, mine are seeing utility rate increase

Posted: Sunday, May 09, 2010

Tuesday's headline "AEL&P rate hike to skip cruise ships, mine" was news to me, and is completely false and misleading. My conversation with the Empire's reporter touched on several topics, including these two interruptible customers.

The Greens Creek mine has already received an increase, effective the day Lake Dorothy began producing energy for Juneau on a commercial basis. Their rate increased by 108 percent by Sept. 1, in accordance with their Power Sales Agreement approved in 2005. The rate changed from 4.8 cents per kilowatt-hour to 10 cents.

Both Greens Creek and Princess Cruises are very large customers with detailed delivery specifications that require special power sales agreements. These agreements are approved by the Regulatory Commission of Alaska and are outside the scope of the general rate filing currently before the commission.

The Princess Cruises Power Sales Agreement goes back to the late-1990s. The agreement stipulates that their rate would increase once Lake Dorothy was online. However, the details of this rate could not be established. On May 4, the Regulatory Commission received an amendment to Princess Cruises' power sales agreement that also increases their rate by 108 percent and will result in a rate of 10 cents per kilowatt-hour. Once the commission has approved this agreement on an interim basis, AEL&P will begin serving this customer. AEL&P customers receive all revenue from Princess Cruises as a credit through the Cost-of-Power Adjustment.

Tim McLeod

President and general manager, AEL&P

Juneau



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