Chugach Electric withdraws its 4% rate increase request

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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.

5 COMMENTS

  1. Everyone with a clue about power generation and the structure of Chugach Electric and ML&P knew this merger was an IBEW 1547 takeover of our power grid. It was a given that they would be coming for more money to finance the cabal that rips off the ratepayer to sustain the union appetite for money. The assembly has already been violating the expenditure of funds outlined in the sale proposal the voters voted on.

  2. Maybe(?), they can get some more federal grants to build more Wind Farms? We can certainly see (on a daily basis) how effective and efficient those are???

  3. I found the RCA Order and Public Comments to be interesting reading as well as your summary. I was suspicious of the initial projections included on the ballot and would like to see full disclosure of the costs, terms and subsequent expenditures regarding the merger, including the contract with Mark Begich and other beneficiaries. I have often marveled how five to seven Chugach employees can be on the clock for many hours when only one or two are working. I’ve also had occasion to observe one man working so hard, doing heavy lifting and running constantly that I feared for his health while a large group of men, also on the clock engaged in nothing but observation. Surely Chugach Electric is overcharging us for the benefit they provide.

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