AEL&P offers to fund energy crisis reviews

Posted: Sunday, May 18, 2008

Alaska Electric Light & Power Co. offered up to $30,000 Friday for the city to conduct an independent audit of the cost of power adjustment expenses and collections related to the energy crisis.

The proposal is an effort to reassure the community of AEL&P's financial integrity, according to the company.

"We ... need to do everything possible to answer the public's questions and fears during and after this energy crisis," AEL&P President Tim McLeod wrote in a May 16 letter to Juneau Mayor Bruce Botelho. "Like you, I value the public's trust, and AEL&P wants to do whatever it can to help restore that trust."

In the letter that outlines McLeod's proposal, he suggests the mayor would select a certified public accounting firm to conduct the independent audit, to ensure the utility collects only what is necessary to cover its higher diesel fuel bills.

"The audit should be designed to assure rate payers that all of their money was properly accounted for during this period of high electrical rates, and that the company did not unduly profit from the rate adjustment," McLeod wrote.

Juneau residents expect to see a 447 percent increase in electricity rates after avalanches destroyed a transmission line to the Snettisham hydroelectric project on April 16. Higher bills are due to the increased cost of switching to diesel until the line can be fixed.

The company's proposed contribution also would fund a consultant to report on "lessons learned" during the crisis, McLeod wrote. The consultant, who would be advised and directed by a three-member panel to be appointed by the mayor, would make recommendations on contingency planning for similar future events.

McLeod suggested the work could be presented to the city three months after power is fully restored at Snettisham.

The $30,000 contribution would come from the company's funds and would not be passed on to the rate payer, McLeod said.

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