By Margaret Friedenauer
Most people in the Upper Lynn Canal are going to see their electric bills go up soon. But nobody knows exactly HOW much. And the people involved in that decision are not making it a transparent process.
Alaska Power Company, a subsidiary of Alaska Power and Telephone, or AP&T, in January applied to increase rates 18 percent. Executive vice president Michael Garrett said the process to determine if that much of an increase is warranted would play out in the public. During an April consumer input hearing in Haines, Garrett mentioned “public process” nine times in his remarks.
Garrett says the utility applied to the Regulatory Commission of Alaska, or RCA, for the increase to cover higher costs mostly associated with infrastructure and administration. The rate increase would affect Haines, Skagway, a handful of other small Southeast towns and several communities near Tok.
At that April meeting, Garrett said the process would work much like a court case. Depositions and testimony would be taken. Lawyers would be involved. And a hearing would be held late this year or early 2015 when the regulatory commission would decide whether to approve a rate hike.
Communities affected by a rate increase were allowed to take part in the case with attorneys representing them. The state attorney general is also a party in the case, representing ALL ratepayers.
But, the parties decided to try to come to a compromise before the case goes before the RCA. A few weeks ago KHNS found out the attorney general and power company were meeting to discuss a settlement. Attorneys for the communities were allowed to attend.
Most of those involved say the settlement talks are confidential. But one attorney said he wasn’t out of line in revealing what the two sides agreed on – an 11.18 percent rate increase.
That number hasn’t been confirmed by anyone else involved in the case – but it hasn’t been denied either. Haines and Skagway assemblies have been discussing the settlement in private, in executive session. They have to approve the settlement before the case can go forward. The Skagway assembly approved the settlement last week, but Mayor Mark Schaefer says the Skagway Borough attorney advised the assembly to keep specifics of that discussion confidential. The Haines Assembly has also discussed the settlement in private but not decided anything yet. The item will come up again at Wednesday’s assembly meeting. A resolution to approve the settlement will be up for discussion and a vote. But it doesn’t state the amount of the rate increase.
The secrecy surrounding the settlement is unsettling to former Haines Mayor Stephanie Scott. She spoke out against a rate increase on behalf of the borough during the April public meeting. Now, she doesn’t know what the borough is potentially agreeing to.
“I’m disturbed that we’re proceeding on behalf of the community of Haines, without informing the community of Haines what is at stake,” Scott said.
Scott says a settlement of 11 percent is confusing because of the testimony filed in the case from a utility expert named Ralph Smith. He testified in September on behalf of the attorney general. He’s a CPA, attorney and utility expert who has consulted on more than 600 regulatory proceedings. He says during his testimony that power companies are at risk of making their service unaffordable for some Alaska communities. Smith testified that APC’s financial standing warrants, at most, a 5-and-a-half percent rate increase.
But, with a potential settlement in the works, Smith says he can’t comment on his testimony. The state attorney general also refuses to comment on why an 11 percent increase settlement would be best when Smith says 5-and-a-half would be enough.
There may still be recourse for ratepayers who don’t agree with 11 percent settlement. While the proposed settlement has to be approved by the communities who are parties in the case, it also has to be approved by the RCA. Scott says the RCA told her she can submit her opposition to them if the Haines Assembly votes to approve it Wednesday.
“I will take action as if necessary Thursday morning depending to what is agreed to Wednesday night,” Scott said.
She may not be the only one. Interior Gateway School District Superintendent Todd Poage says his regional school board objects to a rate increase. The district last year paid $574,000 in electricity costs to AP&T despite the many energy saving efforts they’ve implemented.
“We’re the first school in the nation to reduce electricity through biomass to reduce billing at our largest school, and that’s Tok School, between 25 and 40 percent,” Poage said. “We replaced T12 lights with LEDs at schools with the highest kilowatt rates. We’ve replaced software. We’ve installed temperature setbacks. We’ve replaced circulating pumps, ventilating systems, furnaces and fan motors.”
Poague says he also worries how the rate increase will affect children and families in his community. Eighty-five percent of families with school age children in his district live below the poverty line.
The Haines Assembly meets at 6:30 Wednesday night in assembly chambers. They are planning to vote on the rate increase settlement.