Edited report riles co-op

Frontiersman

PALMER — When Chugach Electric Association first released its Blue Ribbon Panel report in November, the numbers therein greatly interested Matanuska Electric Association.

Most interesting to the local electricity cooperative were the numbers that weren’t in the report, said MEA Assistant General Manager Tuckerman Babcock. Those were blacked out in the electronic copy MEA was provided by Chugach.

That is, those numbers were blacked out until an information technology employee at MEA noticed an older version of Adobe Acrobat Reader could restore the redacted information.

“It was just layered,” Babcock said. The utility posted the un-redacted report on its Web site, then filed it with the Regulatory Commission of Alaska.

The un-redacted report has huge implications on an eight-month electricity rate fight MEA has been waging with Chugach in a case filed with the RCA, Babcock said. Chugach wants to raise the rates it charges MEA, but the unedited report refutes most of Chugach’s arguments in the case, he said. The proposed increase would immediately raise MEA’s cost by roughly $300,000 a month.

At issue, he said, is Chugach’s claim that rates need to be increased since sales to individual customers are subsidizing wholesale energy sales to co-ops like MEA.

Babcock pointed to a table contained in the report, which shows the opposite is true. The cost to provide power to retail customers is higher than Chugach would like, whereas the wholesale costs are lower than expected. The redacted version does not include numbers for wholesale power costs.

Under a contract MEA’s board of directors has voted not to renew, the co-op purchases nearly all of its power from Chugach. A small percentage comes from a stake the utility owns in the Eklutna power plant. Babcock said Chugach is running out of time and is hoping to squeeze as much cash from MEA as it can before its contract expires in seven years.

Patti Bogan, information officer for Chugach, said the utility doesn’t generally comment about pending litigation and directed inquiries to the RCA Web site. On that site, Chugach’s lawyers have filed documents asking the commission not publish Chugach’s un-redacted report until the utility has been given enough time to respond.

A tersely worded letter to MEA from Donald W. Edwards, an attorney representing Chugach in the rate case, asks that MEA destroy all copies it has of the un-redacted report.

“This letter puts MEA on notice that Chugach has not waived its claim of confidentiality and will be considering all options for redress it may have available against persons who have disseminated this confidential material,” Edwards says.

“Portions were redacted because of pending litigation and ongoing delicate negotiations,” said Liz Vasquez, a Chugach Electric Association board member, at MEA’s last board of directors meeting. “It is difficult to do business if you are spending time, energy and precious resources fighting with possible future business partners.”

Vazquez said Chugach’s board of directors has tried to get the utility out of its legal fights.

Babcock said the RCA has not decided whether it will accept MEA’s comments filed regarding the un-redacted report. The last time MEA picked a rate increase fight with Chugach, the RCA sided with MEA, even awarding the co-op a slight decrease in rates, he said.

Whatever happens this go round, Babcock said the roughly $600,000 the utility has spent fighting the rate increase has been worthwhile. Even a delay of eight months has saved MEA $2.4 million the rate increases would have cost, and he is not pushing the commission to move any faster.

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