Getting people to understand electric rates and the way they’re regulated is a tough task.
Connie Hulbert, the president and general manager of Alaska Electric Light &Power, has worked to explain how electric rates work recently since the announcement in July that Canadian power company Hydro One is purchasing AEL&P’s parent company Avista.
The sale won’t be finalized until next year, but some Juneau residents have expressed concern that AEL&P’s rates will rise with new ownership.
“The thing about electric rates is people generally don’t care unless there’s something big going on,” Hulbert said Wednesday night. “It’s really a complex thing that you try to make understandable to people, and that’s a difficult thing.”
Hulbert was one of just a handful of audience members at Wednesday’s City and Borough of Juneau Assembly Finance Committee meeting, where Assembly members and city staff discussed the ins and outs of AEL&P’s rates and processes.
They spent a great deal of time trying to break down how the Regulatory Commission of Alaska (RCA) sets rates, a process that Hulbert said won’t change with new ownership. Multiple Assembly members admitted that they were confused at the ins and outs of the process, and that they would like to speak with someone from the RCA at a future meeting about specifics.
There was no action taken beyond that at the meeting, which was much more to talk through the city’s options than it was to develop a clearer vision for what the city’s role will be in the future of AEL&P. Hulbert took thorough notes throughout the discussion and said afterword that she thought it was productive.
There’s been discussion about whether or not the city should attempt to acquire the electric utility, but a report from PFM Financial Advisors warned how difficult it would be for the city to pursue that route.
The PFM report details that having a city take over a utility — a process called “municipalization” — is almost always complex and costly and could even lead to litigation. The report said the advisors at PFM saw “no reason” that a CBJ takeover would be any different.
Deputy Mayor Jerry Nankervis expressed his concern, saying that he didn’t recall the Assembly ever having a say in the way the sets rates and that the city simply doesn’t know how to run an electric utility.
“I wanted more information, I supported getting that,” Nankervis said, referencing the PFM report. “Right now, with this report before me, I can’t see, from my perspective, looking any more toward municipalization.”
Other Assembly members also expressed similar concerns about the city running the utility and spending so much money to go through the process. Maria Gladziszewski said that it might be an option down the road if things go south with Hydro One, but that for now she didn’t think the city needed to be owning the utility.
In August, city staff wrote a letter to Hydro One, expressing interest in having AEL&P locally owned and introducing two Juneau businessmen — Keith Comstock and Duff Mitchell of Juneau Hydropower — who were also interested in running the utility. Hydro One CEO Mayo Schmidt responded, saying that Hydro One had “no interest” in selling AEL&P, assuming its purchase of Avista goes through next year.
Hulbert, who sat alongside AEL&P Vice Presidents Eric Eriksen and Alec Mesdag at Wednesday’s meeting, has repeatedly stated that there is no reason to worry about rates changing with new ownership. She said she hasn’t spoken with higher-ups at Hydro One about the company’s plans for the future, but that she is confident in the RCA to continue to do its job correctly.
“I can’t speak for RCA, but we have faith in RCA,” Hulbert said. “They’re not going to allow any outside cost to affect rates for Juneau’s customers.”
• Contact reporter Alex McCarthy at 523-2271 or alex.mccarthy@juneauempire.com.
