AEL&P predicts large drop in rates next month

Posted: Wednesday, May 28, 2008

Juneau's private utility is forecasting a sharp drop in electric rates next month.

Alaska Electric Light & Power Co. announced Tuesday that next month's bills will have a surcharge of about 33 cents per kilowatt-hour less than the current bills, which comes out to about a two-thirds drop from current residential electric rates.

The new estimated rate adjustment will be an extra 10 cents per kWh.

Added on to normal residential rates of 8 cents per hour, the total rate comes to 18 cents per kWh that residents will have to pay for their electricity.

Currently, electric customers are paying a 43 cents per kWh surcharge on their bills due to April avalanches that wiped away Juneau's access to its main source of hydro power and forced the city to rely on pricey diesel fuel to generate electricity.

AEL&P had initially estimated that next month's rates, which will be in effect from June 16 until July 15, would have a 30 cents per kWh surcharge.

The revised estimate comes on the heels of an announcement by AEL&P last weekend that the work on damaged transmission towers between town and the Snettisham hydropower project would be completed earlier than anticipated. The line should be up and running by June 8, AEL&P said. Previously, AEL&P said the work could last until mid-July.

AEL&P spokesman Scott Willis said the shorter repair time is the main reason why rates will be lower than expected. But he added that the estimate could change due to a change in the repair schedule or if the price of diesel changes dramatically in the coming weeks.

"Even though this is just an estimate, we wanted the community to know that the financial impact will not be as severe as we originally estimated," said Tim McLeod, president and general manager of AEL&P, in a statement released by the company. "Having the repairs completed ahead of schedule will save millions of dollars for families and businesses in Juneau."

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