An issue left undiscussed in the conversation concerning the water which Eklutna Lake provides is the authority which the Regulatory Commission of Alaska (RCA) has over-seeing the fiscal rates charged by the Anchorage Water and Wastewater Utility (AWWU).
If those opposing the hydropower provided by Eklutna Lake prevail, the AWWU ratepayers will be in for a rate increase shock. The RCA would be replaced by the Anchorage Assembly as the rate setting authority.
A history of the attempts to change the RCA’s relationship with AWWU is as follows.
During the 24th State Legislature, HB108 was one of the Municipality of Anchorage’s (MOA) legislative priorities. HB108 was introduced by then-Representative Tom Anderson at the behest of then-Mayor Mark Begich. HB108 would have amended the relevant state statute which dealt with the fiscal regulation of AWWU, removing the RCA allowing the MOA and the Anchorage Assembly to set rates. In 2005 HB108 passed the State House but failed to pass the State Senate.
The reason that AWWU is fiscally regulated by the RCA was due to the ‘linkage’ between AWWU and ML&P. With the sale of ML&P to Chugach Electric that ‘linkage’ is now replaced by Municipal Hydro Power (MHP). MHP is part of the ownership group for the Eklutna Lake hydro project. Alaska Statute AS 42.05.711(b)(2) defines how that Statute now applies to MHP.
During the RCA hearings on the sale of ML&P to Chugach Electric the issue of fiscal regulation of the AWWU ratepayers was discussed. Despite the efforts and arguments of municipal officials before the RCA, the MOA was unsuccessful in wresting the control of AWWU from the RCA.
Lines 14-19 on page 70 of the RCA’s Order approving the sale of ML&P (Order Number 39 of Docket Number U-19-020) – state:
Based on the finding that MHP will be competing with other electric operating entities and public utilities under the MEA PPA, we also find that MHP is fully regulated under AS 42.05 pursuant to the AS 42.05.711(b)(2) exception to the exemption from regulation granted by AS 42.05.711(b). With this finding, and contrary to the expectation of the MOA, Anchorage Water and Wastewater Utility will remain subject to regulation under AS 42.05 pursuant to AS 42.50.711(b)(2).
Those words “and contrary to the of expectation of the MOA” defines what is going on here with the Anchorage Assembly’s current approach to the Eklutna Dam issue and AWWU’s relationship with the RCA.
We do have a recent example of the ratemaking philosophy that the Anchorage Assembly utilizes. Solid Waste Services (SWS) is owned by the MOA which also sets the rates for the ratepayers. On October 25, 2022 the Anchorage Assembly passed AO2022-91(S-1). This ordinance authorized rate increases for the years 2023, 2024 (5.00%), 2025 (6.00%), 2026 (5.00%), 2027 (6.80%) and 2028 (2.90%). These on top of the 2021 and 2022 rate increases.
In 2022 being able to see what the fiscal situation of SWS will be, along with the economy in general, six years into the future is absurd to anyone reading this. Should the Anchorage Assembly ever succeed in getting control of fiscally regulating AWWU, the AWWU ratepayers can only look to the SWS ratepayers for their future.
On Wednesday, January 17, 2024 the opinion page of the Anchorage Daily News led with a guest editorial penned by the chair and vice-chair of the Anchorage Assembly advancing the Assembly’s position for the removal of the Eklutna Dam.
Nothing in that piece mentioned the regulatory effects on the AWWU ratepayers which have been addressed here. Perhaps the ADN should offer another opportunity to Assembly members Chris Constant and Meg Zaletel in order to explain to the AWWU ratepayers why they did not address this in their editorial.
The elimination of Municipal Hydro Power through the removal of the Eklutna Dam continues an evolving history of the MOA attempting to wrest the fiscal control of AWWU from the RCA, and once again, keeping the AWWU ratepayers in the dark about this aspect of their attempts.
During the entire campaign encouraging voters to approve the sale of ML&P never once did the MOA or Chugach Electric inform the public of the regulatory fiscal effects on the AWWU ratepayers.
The same is true today for the Anchorage Assembly now encouraging the removal of the Eklutna Dam which, by the way, was approved with a unanimous vote.
Bob Maier lives in Anchorage and is a property taxpayer and Chugach Electric utility ratepayer.