City Manager Rorie Watt (left) speaks as City Attorney Amy Mead listens during the Monday, Feb. 5, 2018 Committee of the Whole meeting. Watt will enter into negotiations with Alaska Electric Light & Power about the city’s priorities during Canadian company Hydro One’s purchase of AEL&P’s parent company, Avista Corp. If the Assembly decides to intervene in the process, Mead will head up that process. (Alex McCarthy | Juneau Empire)

City Manager Rorie Watt (left) speaks as City Attorney Amy Mead listens during the Monday, Feb. 5, 2018 Committee of the Whole meeting. Watt will enter into negotiations with Alaska Electric Light & Power about the city’s priorities during Canadian company Hydro One’s purchase of AEL&P’s parent company, Avista Corp. If the Assembly decides to intervene in the process, Mead will head up that process. (Alex McCarthy | Juneau Empire)

City officials pursuing ‘intervening’ in purchase of city’s utility

The City and Borough of Juneau is one step closer to becoming a so-called “intervener” in Canadian power company Hydro One’s purchase of the parent company of Juneau’s electric utility.

The CBJ Committee of the Whole members voted unanimously to pursue becoming involved in Hydro One’s process of acquiring Avista Corp., which owns Alaska Electric Light & Power (AEL&P).

Becoming an intervener would basically mean that the CBJ has a say in the sale process. The Regulatory Commission of Alaska (RCA) is currently reviewing Hydro One’s application to buy Avista. The city, through an attorney, would represent the people of Juneau in the process.

[City looks at being an ‘intervener’ in purchase of AEL&P]

There will be at least a few weeks until the Assembly members make their final decision about becoming involved, as the city would have to appropriate money (about $75,000, the committee members agreed Monday) to pay attorneys to complete the intervener process. There will be a special Assembly meeting held Feb. 26 (the time has not been set yet) to make the final decision about whether to appropriate those funds.

Multiple Assembly members acknowledged that the public comment they’ve heard from the public has been overwhelmingly in favor of the city getting involved. More than 40 people showed up at Monday’s meeting, many of them sporting stickers that called for the CBJ to intervene.

“I’m sufficiently convinced that the public of Juneau wants us to intervene,” Assembly member Rob Edwardson said.

The main reason people have given for wanting the city to get involved in the process is the desire to protect the future of the Snettisham hydroelectric project. U.S. Rep. Don Young was among those who wrote to the Regulatory Commission of Alaska (RCA) with concerns about losing local control of the Snettisham plant, as was Rep. Tammie Wilson.

Snettisham is owned by the Alaska Industrial Development and Export Authority, but it is managed by AEL&P. Snettisham was built by the federal Alaska Power Administration but sold at a discount by the federal government to AIDEA in 1998. AIDEA sold $100 million in bonds to buy the project, and AEL&P is paying for those bonds with proceeds from power sales. The bonds are expected to be paid off in 2034, and when that happens AEL&P can buy the Snettisham facility on the cheap.

AEL&P President and CEO Connie Hulbert has said there are multiple protections on Snettisham, including the fact that the RCA would have to approve the sale if it ever happens. Both Young and Wilson were wary of letting the facility fall into the hands of Hydro One — which is 47 percent owned by the Ontario government.

“If Hydro One is successful in obtaining RCA approval with the Snettisham asset rights, this would set a precedent that Alaska is up for sale and that it is open season to plunder our state,” Wilson wrote. “This is a bad message.”

Hulbert expressed faith in the RCA’s process, saying that the process is designed to take public input into account.

“We are confident that the merger on the horizon for Avista will not negatively impact AEL&P or Juneau,” Hulbert said in a statement Monday night, “and that AEL&P will continue to operate as we do today, making local decisions to serve our customers.”

Priorities in the process

Until the Feb. 26 meeting, City Manager Rorie Watt will negotiate with AEL&P management regarding the city’s goals in this process. At the beginning of Monday’s meeting, Mayor Ken Koelsch outlined his list of priorities in the negotiation process. The first item on the list was asking that the Snettisham facility be kept either in the possession of the State of Alaska or the CBJ.

Koelsch’s second priority was to ask Hydro One to take the protections that Hydro One has guaranteed to Avista customers in Washington and also apply them to Juneau customers. Hulbert has said that Hydro One’s application already guarantees these protections for Juneau customers.

Koelsch’s other priorities centered around keeping the public informed, asking for AEL&P to help communicate the RCA process to members of the public in plain language and presenting its utility plans to the public every two years. He also expressed his desire to have the deliberations between Hydro One and Avista take place in Juneau. The committee members agreed Monday to have Watt negotiate with these priorities in mind.

Watt will take other Assembly priorities into account, including getting clarification on what happens with AEL&P owned lands in Juneau (like former Alaska-Juneau Mine property) and working to guarantee open-access conditions where other companies could use local resources to supply power.

These will be priorities if the CBJ ends up being an intervener in the process as well. Watt said after the meeting that the negotiations in the coming weeks with AEL&P will be to see what guarantees the CBJ can get before having to hire lawyers for the intervening process.

 


 

• Contact reporter Alex McCarthy at 523-2271 or alex.mccarthy@juneauempire.com. Follow him on Twitter at @akmccarthy.

 


 

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