AEL&P prepared to sue for rate increase

Alaska Electric Light & Power is threatening to sue the Regulatory Commission of Alaska if it doesn’t get the rate increase it says it needs.

At stake is $13,500 per day (or $4.9 million a year) in revenues either lost by AEL&P or saved by customers, depending on one’s view.

The discussion of a lawsuit came during a an RCA pre-hearing Wednesday via teleconference. The state utility regulator last week denied the company’s request for an interim and refundable 18-percent rate increase. The RCA will have more than a year to decide on the proposed 22-percent permanent increase.

The talk of a lawsuit came in advance of a July 6 evidentiary hearing set at AEL&P’s request.

At the pre-hearing, AEL&P attorney Dean Thompson said that if the company can’t get a needed increase, it plans to seek injunctive relief in Superior Court.

Thompson said AEL&P was not making a threat.

“I do not play games or make threats, particularly with the commission,” he said.

Still, “AEL&P has a fiduciary duty to its shareholders,” he said, as well as responsibility to its employees and customers to seek revenues to keep the company strong.

Thompson said he told the commissioners that so they would not feel “sandbagged” if AEL&P files suit.

Commissioner T.W. Patch and others at the pre-hearing did not react to Thompson’s statement.

In the RCA’s denial of the interim rate increase, the commissioners said that some rate increase was likely justified but that AEL&P would need to provide additional information to explain the need.

During the brief hearing, Thompson said that not receiving the rate increase was already having a serious impact on the company. He was accompanied by AEL&P President Tim McLeod and Secretary/Treasurer Connie Hulbert.

“This is real money and real irreparable harm,” he said.

AEL&P wanted to include the rate increase in bills going out last Friday. It is not clear when an increase might come, or if one will at all.

The company has been paying for the Lake Dorothy project, which went on-line last summer, as well as the additional operating costs without ever receiving a rate increase, he said.

“That is revenue that is forever gone, due to the rule against retroactive rate making,” he said.

“AEL&P needs a decision promptly, for a number of reasons,” he said, mentioning the loss of revenue but not identifying any others.

Thompson said AEL&P was unclear about what additional information the RCA was seeking. Patch listed several items from the denial order, including information about costs of Lake Dorothy and AEL&P’s bond covenants.

Thompson said he was not sure whether all that information could be ready by the July 6 hearing.

Patch offered to delay the July 6 hearing, which he said had been scheduled quickly to assist AEL&P. Thompson declined that offer, saying a quick decision was critical.

Thompson asked for an order to be issued quickly after the hearing, hoping for one within 48 hours.

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