Monthly electric bills increase by about $4

Requested increase would offset reduction introduced in January

Posted: Tuesday, July 11, 2000

Alaska Electric Light & Power Co. is asking state regulators for its first rate hike in four years.

The average residential customer in Juneau would see an increase of less than $4 per month, according to AEL&P.

Juneau's sole electrical utility needs the adjustment to keep transmission and distribution facilities in optimal shape and to get in the strongest financial position for large capital projects in the future, said Bill Corbus, president and CEO of AEL&P's parent company.

The requested increase of 4.14 percent across the board would offset a rate reduction of 1.78 percent that went into effect Jan. 1.

``We think that the 2.36 percent net increase is fairly modest,'' Corbus said.

AEL&P has averaged an annual rate increase of just 0.6 percent during the past four years, while inflation, as measured by the Anchorage consumer index, has increased about 1.6 percent annually, the company said in its rate filing with the Regulatory Commission of Alaska. The commission likely won't act on the rate request until early 2001, Corbus said.

The residential bill for 1,000 kilowatt hours of electricity per month would go from $90.52 to $94.28, for an increase of $3.76. An average residential customer in Juneau uses 866 kilowatt hours a month, said Steve Crapo, secretary and treasurer for the utility.

The recent rate reduction was based strictly on costs associated with the 1998 state takeover of the Snettisham hydroelectric plant, a former federal project now operated by AEL&P, and with new underwater cables to bring that power across Taku Inlet to Juneau.

The new filing ``looks at all the other costs of doing business,'' Crapo said. ``Now we're looking at the big picture and not just the costs of Snettisham energy.''

A key consideration is having a rate of return that attracts favorable debt financing when AEL&P finally decides to build the Lake Dorothy hydroelectric project near Taku Inlet, Corbus said. That project is on the back burner until there is a significant increase in electrical demand in Juneau.

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