AEL&P drops electric rates in anticipation of surplus sales

Posted: Sunday, May 17, 2009

JUNEAU - Here's something that Juneauites might find unexpected when reviewing their energy bills: a refund.

If regulators approve it, customers will see a credit of .35 cents (not 35 cents) per kilowatt-hour from June to November. That translates to about $4.41 off a $100 residential electric bill.

Juneau electric customers got to know their Alaska Electric Light and Power Co. bills more thoroughly in the last year, when avalanches twice took out the lines that supply hydro energy. In particular, they learned the legal term "cost-of-power adjustment," through which AEL&P passed on the extra cost of powering the town on diesel until the lines were repaired. Rates more than quadrupled for a few months in 2008, and tripled for a month this winter.

But the cost-of-power adjustment works in the other direction, too.

When the utility predicts it will have a surplus of energy - which depends on how much water the lakes start with, and how much electricity people use - it sells some to their interruptible customers: Greens Creek mine on Admiralty Island, Princess Cruise Lines and dual-fuel customers.

Some of what they pay goes back as a rebate to the regular customers. AEL&P is dropping the summer rates slightly because it anticipates selling surplus energy.



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