Anchorage power plans impact MEA

PALMER — Restructuring plans afoot at Chugach Electric and Anchorage Municipal Light and Power have the Matanuska Electric Association paying close attention.

Fred Boness, architect of those plans, appeared Wednesday before MEA’s board of directors to outline the plans and assuage fears and concerns held by the local electric cooperative.

Boness said the plan, as he sees it, would have Chugach morph into a company dealing solely in distribution, with ML&P taking over power generation and transmission. ML&P would sell power directly to Chugach’s current customers, including MEA. That would allow power plants to be built with tax-exempt financing that ML&P, a division of the Municipality of Anchorage, enjoys. That financing would save between 1 percent and 2 percent on the cost of building the facilities.     

That might not sound like much, Boness said, but when talking about power plants that cost hundreds of millions of dollars, it can be a substantial savings.

The plans for Anchorage’s utilities will not be decided until at least November, Boness said. But those plans will have strong implications in the Valley. Now and for the next seven years, MEA buys most of its power from Chugach. If Chugach gets out of the generation business and doesn’t have any power to sell, local officials wonder where that leaves MEA.

Boness said that issue hasn’t been settled, but that it’s one of the elephants in the room as talks move forward.

Even after those seven years, MEA General Manager Wayne Carmony said MEA will likely have its own natural gas power plant online, but will still need to find someplace to buy between 20 and 50 megawatts of energy.

MEA Board President Lois Lester put the question directly to Boness, asking if MEA is required to have a seat at that table.

Boness, noting that the best way to move forward is to head off conflict before it starts, said, “The short answer is ‘no.’ The correct answer is ‘yes.’ The prudent answer is ‘yes.’”

Contact Andrew Wellner at andrew.wellner@frontiers- man.com or 352-2270.