Regulatory Commission approves AELP’s request to lower rates

Alaska Electric Light and Power customers will see their electric rates drop.

The Regulatory Commission of Alaska approved AEL&P’s request to pass income tax savings through to its customers. Effective Aug. 1, customers will see a 6.73 percent decrease in electric rates as a result of the Tax Cuts and Jobs Act of 2017.

Debbie Driscoll, vice president and director of consumer affairs for AEL&P, said in a phone interview with the Empire Tuesday, the amount was determined by taking the last rate increase of 3.86 percent in November 2016 and combining it with the results of the Tax Cuts and Jobs Act. The Tax Act includes provisions lowering the effective federal corporate income tax rate from a maximum of 35 percent to a flat rate of 21 percent.

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For a residential customer using an average of 750-kilowatt hours of energy per month, this is a decrease of $6.40 per month. Residential customers, at that same usage, will also see a one-time credit to their account of approximately $45. That amount may vary on individual refunds based on actual usage.

On June 5, the RCA announced that it would be holding a hearing with AEL&P to discuss savings. However, before the hearing, AEL&P filed a formal request to the RCA on June 15 requesting the decrease.

Driscoll said that AEL&P has been planning for the decrease to be approved by the RCA and does not expect any issues with adjusting to the lower rates. However, refunds are a slighly more difficult to determine when customers will receive them. Driscoll said because people move and that billing is sent out at different times throughout the month, that the credit will arrive to customers sometime between Aug. 1-30.

“Obviously, there is quite a bit of work on our end left to do,” Driscoll said. “We were hoping it would get approved.”

Driscoll said AEL&P had been tracking the resulting savings from tax act, but could not make rate changes until they were approved by the RCA. Driscoll said AEL&P is pleased to pass the tax break onto its customers.

“We have said from the beginning that we intended to lower rates and we are happy we have been able to do that,” Driscoll said.

On June 4, the RCA, which regulates public utilities by certifying qualified providers of public utility and pipeline services and ensuring that they provide safe and adequate services and facilities at just and reasonable rates, terms, and conditions, approved the sale of Avista Corp. (parent company of AEL&P) to Canadian-owned Hydro One Limited. That sale is still pending with utility commissions in Washington, Idaho and Oregon. Montana’s utility commission has approved the sale, Driscoll said. Hydro One expects to close the rest of those transactions in the second half of this year.