RCA mum on Juneau utility rate hearing

Posted: Tuesday, June 08, 2010

The formal public comment period on Alaska Electric Light & Power's proposed 22 percent rate increase ended Friday, but there is no decision yet on whether the Regulatory Commission of Alaska will come to Juneau to hear from residents in person.

The RCA has until June 17 to act on AEL&P's May rate increase request, and will decide by then whether to hold a "consumer input" session in Juneau, as well as the official public hearing on technical issues that will be held in Anchorage, said Grace Salazar, spokesperson for the commission.

A local hearing has been requested by the city's elected leaders, including the Assembly and local legislative delegation, following the utility's request for a temporary rate hike of 18.5 percent that will precede the permanent 22.1 percent increase.

The commission has 45 days to review the rate increase while staff analyzes AEL&P's detailed justification for its increase, along with the comments submitted by the public.

"The staff is diligently reviewing the filings as well as the public comments, and will need time to prepare an adjudication memo," Salazar said. That memo will go to the members of the commission, which will make the final decision.

The commission is charged with ensuring that Alaska utility rates are "just and reasonable" as required by law.

While the staff has been analyzing the application, so have numerous Juneau residents, who have weighed in with sometimes emotional pleas for lower rates as well as detailed analyses of AEL&P and its business operations.

In total, more than 100 comments were made by the June 4 deadline. While most were critical of the proposed rate increase, there also were scattered expressions of support for the increase and praise for AEL&P's reliable service in the face of hardships.

Many also objected to Juneau residents being forced to bear the costs of developing the new Lake Dorothy Hydroelectric Project, even though utility officials said it would provide significant long-term benefits to Juneau.

"I feel it is unfair to put the burden of the Lake Dorothy Hydro Project on the backs of Juneau's residents and small businesses while favoring the mine," commented Barbara Coate.

Princess Cruise Lines and Hecla Greens Creek Mine will benefit from Lake Dorothy power, but will pay lower rates than residents. The rate for both companies will increase to about 10 cents per kilowatt hour. That will benefit those businesses, but also will provide a long-term benefit in developing future power sources the utility couldn't otherwise afford, AEL&P President Tim McLeod said in a past interview.

Juneau's Tom Boutin praised AEL&P's service and said he was realistic about increasing costs and was fine with the rate increase.

"I also believe that Lake Dorothy is a great benefit to me, and I am sure the construction was done in a very cost effective way," he wrote.

Several critics of the increase, including Randy Sutak and Brad Fluetsch, wrote detailed rebuttals to AEL&P's justification for an increase.

Sutak said the Lake Dorothy Project had been mismanaged, and the Greens Creek mine was not charged a fair cost for its power.

He said AEL&P "wrongly shifted the cost of their mismanagement to the general rate-paying public."

Fluetsch, a private financial advisor, said the profit margins AEL&P is requesting were not justified, given that it was a regulated monopoly utility, and suggested a more modest increase.

Many of those filing comments focused not on AEL&P but on their own circumstances, saying many older residents on fixed income couldn't afford the increase because retirement pay was increasing at only 2 percent a year.

"An increase of 22 percent is outrageous," said Franz Kugelmann of Lena Point.

• Contact reporter Pat Forgey at 523-2250 or patrick.forgey@juneauempire.com.

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