Skagway and Haines saw a nearly 15% increase in their power bills in 2023. Now, the power company is asking for another increase under a subsidiary company. Skagway’s borough assembly is protesting the latest increase.

 

Goat Lake Hydro, an offshoot of Alaska Power and Telephone Company, requested a nearly 70% rate increase on Dec. 23. The company says the increase is necessary to cover the cost of an undersea cable replacement. 

Jana Grenn is regulatory director for Alaska Power.

“In early 2019, Goat Lake Hydro experienced the fiber optic element failure in the Skagway/Kasidaya cable segment, and cable damage from a subsea landslide,” she said. “And at that point, we immediately began assessment whether we could repair or replace the cable, and it came back that the damage was too extensive for us to actually repair, and we had to actually do a full replacement.”

Grenn said the power company filed a rate change request with the Regulatory Commission of Alaska.

“They do a review and approval process that we are part of,” she said. “So it’s not just us arbitrarily setting rates. There’s a whole list of regulations we have to follow when we file. And we have to support our rate request with testimony, financial data, other supporting documentation.”

The Municipality of Skagway is familiar with these steps. They were part of the rate case with Alaska Power Company that started in 2023 and was finally settled last October.

Emily Deach is Skagway’s new borough manager. She was involved in the previous rate case as the borough’s deputy manager. She says the borough involved their attorneys.

“We engaged Brenna, Bell and Walker to negotiate a settlement with that rate case for Rate Group One, which includes Skagway and Haines;” Deach said. “We were able to intervene, and so that gave us a seat at the table so that we could represent the community.”

Alaska Power Company had asked for an increase of about 23%. Their end rate increase was negotiated to around 15%.

Deach said there are a lot of unknowns in the company’s latest rate increase request through its subsidiary.

“At this point, we haven’t had any analysis done like we did with the APC rate case,” she said.

Skagway’s Borough Attorney Jake Staser spoke to the assembly at their Jan. 3 special meeting.

“From our perspective, this is a bit of an attempt for AP&T to recoup revenues that they weren’t able to obtain through the last rate case that Skagway participated in,” Staser said.

While the subsidiary company has requested a 70% increase, Skagway and Haines residents would likely only pay a fraction of that. That’s because the Goat Lake Hydro charge makes up just a portion of a power bill. And most of the increase would be adjusted through the state’s Power Cost Equalization program, which provides energy relief to rural communities. However, equalization only applies to residents, not businesses.

That’s still not much comfort for some in Skagway. Tim Bourcy was visibly upset when he testified against the rate increase at the special meeting.

“Do you think this company gives a rat’s ass about year-round business in this community?” he asked. “No, they don’t. It’s about their profits … Skagway has been used as the cash cow for everyone – for fuel, for freight, for everyone for a long time. And you know, what’s the old movie? I’m mad as hell.”

The assembly voted to protest the increase and seek further analysis. 

Assembly member Deb Potter summed up her concerns.

“I think we have a responsibility to investigate this further or more accurately, have the attorneys investigate this further,” she said. “I think we have a duty to our citizens, private and business alike, to make sure that … everybody is being charged fair and reasonable rates. This has brought up a lot of questions and eyebrows for all of us.”

Potter and others stressed that their response to the power company was not a reflection on Skagway’s AP&T workers.

“I do want to reiterate … that this is nothing against all of our local AP&T employees who do a great job and are all valued community members,” she said.

The public can submit comments about the rate increase request at the Regulatory Commission’s website. There, they can also view the TA7-521 filing notice and sample bills. 

Notice of the newest proposed increase came out Dec. 23 with a comment deadline of Dec. 6. The municipality requested an extension, which was granted. The updated comment deadline on the proposed increase is Jan. 24.