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MEA Rate Hike Linked to Chugach Electric Rate Increase

By | April 9, 2013 - 11:36 am

 Matanuska Electric Association is blaming an upcoming rate hike on the Regulatory Commission of Alaska. In March, the RCA approved a 42 percent base cost increase request by Anchorage – based Chugach Electric Association for the power that Chugach sells to MEA. MEA spokesman Kevin Brown says the rate hike could be temporary:

“While the RCA does a full investigation of this rate filing, they have approved an interim increase in the wholesale power cost to MEA of 42 percent. That investigation will likely take a year to complete. When that investigation is done, if the RCA decides that the rate increase wasn’t warrented, all the money that we’ve paid to Chugach as a result of that increase will be refundable to MEA.”

Brown says MEA purchases almost all of its power from Chugach under a contract that won’t expire until the end of next year. He says MEA strongly opposed the RCA’s interim increase in the cost of wholesale power paid to Chugach.

 ”As we purchase almost all of our power from Chugach Electric, we are largely at the mercy of their prices. Approximately two thirds of the MEA customers’ bill is just directly passed on from Chugach Electric. So when their costs go up, we feel that right alongside them. “

 Brown says the RCA has allowed Chugach to increase rates for its other customers, too, but in amounts less than the 42% increase for MEA. He says the MEA customers can expect to pay eight point seven million dollars over the course of the year to cover the extra cost.

That shakes out to about nine dollars more a month for an average household bill for 750 kilowatt hours, starting this month. The Chugach rate increase starts today (Monday) he says, and customers will see the higher rate reflected in next month’s MEA bill.

 Brown says Chugach’s increase is to cover the costs of Chugach’s new gas fired electric generation plant in Anchorage.

MEA is constructing it’s own electric generation plant in Eklutna. That project is expected to be complete by 2015.

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