AEL&P works to 'levelize' billing for its customers

Posted: Tuesday, May 13, 2008

Juneau's electric utility is working on a way to ease the pain of the next several monthly bills for many of its customers.

Alaska Electric Light & Power Co. plans to file a request with the Regulatory Commission of Alaska this week that will allow more customers to choose what's known as levelized billing, according to company spokesman Scott Willis.

The RCA currently allows the company to offer levelized billing to those bill-payers with electric heat, who see large swings in their electric usage throughout the year. About 150 people have chosen to be billed on the system so far.

If regulators approve, all residential and small commercial customers would be eligible. Last month AEL&P had 13,538 residential customers and 1,453 small commercial customers, Willis said.

"Any assistance that would help people would be a good thing," said Rod Swope, city manager for Juneau, which has been working on other ways to help bill-payers.

Juneau residents have been expecting high electric bills since shortly after April 16, when avalanches tore down the transmission line that supplied the city's cheap electricity from the Snettisham hydroelectric project. The bills cover the cost of powering the city on diesel fuel.

The first high bills are scheduled to go out May 16.

In levelized billing, AEL&P estimates - based on past electricity consumption and projected future rates - how much an electric customer will owe in the next year. The company then divides that number by 12 to get the amount a customer pays each month.

"It makes it level, so they know what to budget each month," Willis said.

For people who haven't been at their present location for 12 months, the company would include the past tenant's usage in its estimate.

After 12 months, the company would true up the difference between the estimate and the actual cost, Willis said, and issue either a new bill or a check to the customer for the difference.

If a person ended service before the year was up, AEL&P would calculate that truing at the time of disconnection.

Willis said levelizing bills essentially amounts to "an interest-free loan" on a portion of the bill for those who take advantage of it.

The RCA commission, a six-member board appointed by the governor, must approve the filing. Willis said the company would ask the commission for a speedy review.

The payment plan, if approved, would add to options already in place or emerging for those customers who cannot bear the burden of such high electric bills.

In the week after the avalanche, AEL&P said it didn't have enough cash on hand to allow people to spread out the next few months of high bills over longer periods. Willis said, however, that levelized billing was doable with the company's present cash flow.

Levelized billing would add to options already in place or now emerging to help residents and businesses with their electric bills.

AEL&P offers repayment plans to its customers, Willis said. People can apply to pay at least one-third of their normal bill each month and stretch the rest over three to six months.

People also can start applying this week to Juneau Unplugged, the city's newly funded grant program to help low-income residents pay their electric bills.

"There's a segment of the community that doesn't meet those low-income requirements," Willis said. "This might be able to help them."

Willis said he didn't know how many people would be interested in levelized bills.

The company is preparing computer programs to calculate the levelization estimates. AEL&P also plans to put more people on front-desk duty to work with customers, he said.

"We're trying to gear up to deal with everybody that might be interested in this," he said.

• Contact reporter Kate Golden at 523-2276 or e-mail

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