While still blaming Covid economics for its fiscal situation, Chugach Electric Association on Jan. 20 asked the Regulatory Commission of Alaska for permission to withdraw Chugach’s request for a 4.1% rate increase, along with permission to “decouple’” its rate structure as it merges Municipal Light & Power into the company. Chugach had proposed that decoupling would require the 4.1% increase, and had proposed that increase go into effect Feb. 1, 2022.
Decoupling sets the revenue needed to cover known costs, then allows rates to change with consumption to meet the revenue target, according to the Alliance to Save Energy website. Decoupling also adds a “true-up” mechanism that adjusts rates more frequently based on consumption.
The RCA granted Chugach the request to withdraw the request on Feb. 9, and set a date of Feb. 28 for Chugach Electric to resubmit an alternate proposal to remedy the electric utility’s fiscal situation.
Undiscussed are the effects of the $1 billion sale of Municipal Light & Power to Chugach Electric — a sale that was marketed to the voters by the Ethan Berkowitz Administration with the promise of “No Increase in Base Rates.”
You can read the RCA Order here:
Of the entire Chugach Electric Association customer base, the RCA received fewer than 15 public comments on the proposed merger, with its rate increase and decoupling proposal.
“Each of these comments opposed Chugach’s limited decoupling proposal in whole or in part. In response to these comments, Chugach filed a Motion to withdraw TA514-8 and TA392-121,” the RCA order summarized.
You can read the Public Comments here:
In a separate RCA proceeding, Chugach Electric and Matanuska Electric disagree about the process for implementing their “Tight Power Pool.” The formation of this power generation linkage between the two utilities was mandated by the RCA as a condition of the sale of ML&P to Chugach.
If the “Tight Power Pool” disagreements are not resolved, the fiscal state of Chugach Electric will be another issue for the RCA to deliberate.