MEA board approves second rate hike of year

February 26, 2006

DAWN DE BUSKFrontiersman reporter

PALMER - Following January's one-quarter-of-1-percent increase in base rates for local co-op members, the Matanuska Electric Association board of directors unanimously OK'd a second rate hike of 1.89 percent that could go into effect in April, according to board president Lee Jordan.

&#8220We've been voting to decrease rates for the past couple years, and it's catching up with us,” Jordan said. &#8220It's costing a little more to operate. We have to maintain safe margins for the year.”

The rate hike could reap revenue of approximately $997,000, according to MEA spokesman Mike Pauley.

MEA has 50,600 meter customers, he said.

The co-op needs to create some revenue because rising fuel costs are forcing up MEA's operating expenses, Pauley said.

&#8220Fuel is one factor, rising health care for employees, significant increases in cost of materials, from transformers to power poles,” Pauley said.

Some of the factors behind the surges in fuel prices and more expensive materials are a direct result of damage done by Hurricane Katrina, he said.

Will residents have to rethink their budgets in order to continue being able to pay their electric bill?

Both Pauley and Jordan said the increase for the individual customer should be small enough to afford.

A Valley resident who uses 800 kilowatt hours of electricity each month would pay $1.37 more each time they receive a bill. Someone who typically uses 1,500 kilowatt hours during a month would see a jump of $2.50.

&#8220The amount of consumption is located on each person's monthly bill. It shows the number of kilowatt hours. People can look at their bills to see where they fall in terms of kilowatt hours,” Pauley said, adding that MEA customers can use that tip to calculate how much their bills might increase.

Both Pauley and Jordan said other electric co-ops, such as Homer Electric Association, which serves the Kenai Peninsula, and Golden Valley Electric Association, located in Fairbanks, have been forced to up their base rates.

HEA upped its base rates by 8 percent, and that went into effect this month, according to a press release. Public relations coordinator Joe Gallagher will be out of office until Monday, and could not be reached for comment.

That co-op has 28,000 members, and its customers who use 650 kilowatt hours would see their monthly bill increased by $16.58, according to the HEA newsletter &#8220Kilowatt Courier.” The rises in fuel costs were also at the root of rate hikes.

Eight percent is the maximum increase allowed by the Regulatory Commission of Alaska, according to Pauley.

&#8220Golden Valley also filed for an 8 percent base increase. Essentially, the other co-ops are going for the maximum rate hikes possible. We are pleased that we are able to keep requests of increases lower,” he said.

Contact Dawn De Busk at 352-2252 or dawn.debusk@

frontiersman.com.