MEA challenges Chugach

MAT-SU -- Matanuska Electric Association has launched an advertising campaign and a companion Web site, encouraging Chugach Electric Association consumers to question what MEA officials are calling the highest electrical rates in the railbelt. Chugach officials say the campaign, as far as they're concerned, is a dud.

"The goal is to encourage consumers to bring pressure to bear on the Chugach Electric board of directors," MEA spokesman Mike Pauley said. "They're charging more for service than any other electric utility from here to Fairbanks."

MEA launched a Web site, www.bringratesdown.org, and also has placed ads in newspapers in the area and on area radio stations, so far spending about $90,000 on the campaign, Pauley said, from their member communications budget.

The Web site encourages consumers to contact the Chugach board of directors and ask questions -- and even provides a list of questions. Board member Pat Jasper said Friday she's had a few e-mails, but none, so far, have been critical or pressed for lower rates.

"Some people say to me, 'What's MEA up to now?'" Jasper said. "There haven't been a lot of repercussions from it."

The campaign hasn't stirred a lot of activity at Chugach's corporate offices either.

"The response certainly hasn't materialized as anything that's overwhelming," said Carol Heyman, commercial and community relations director with Chugach. "I haven't gotten one person [who said to lower rates]. Those who have called, their reaction is, 'What is MEA up to now?' I wish I knew. It's sort of a non-event."

Heyman added that Chugach has no plans to respond with their own advertising campaign, although they do have a link at their Web site, www.chugachelectric.com, entitled "Chugach Rates -- The Real Story."

"We always try and take the high road," Heyman said. "We felt it was important not to get into a spitting match because it just doesn't make sense -- we have a lot more important things to do."

Pauley said the advertising effort is also geared at making consumers aware of a few projects lingering on Chugach's horizon. House Bill 453, he said, would allow Chugach and other generating utilities, who are considering entering into a joint agreement that would allow them to share costs for new projects, to be exempt from oversight by the Regulatory Commission of Alaska.

"The commission would not have the ability to question whether expenses were necessary at all," Pauley said. "They'd just get to recover those expenses from consumers through rates and the commission would not be allowed to second-guess."

Pauley said MEA believes it would be harmed by the removal of duties such as the setting of rates from RCA.

"We buy 25 percent of the power Chugach generates and we get one vote," Pauley said. "Obviously, that's something that has a huge impact on MEA. The bottom line is Chugach is a company that needs more regulatory oversight, not less."

Pauley added that a $90,000 advertising campaign, if it raises enough awareness to cause Chugach board members to rethink exemption from RCA oversight, may well pay off. And, he said, it would be cheaper than a court battle or even a drawn-out hearing before the RCA, such as the one that consumed railbelt utilities in the past two years.

The rate case, from which MEA recently received about $3 million in overcharges from Chugach, is still on appeal in the Alaska court system. One of the primary points of the appeal filed by Chugach charges that the new rate structure demands that the company charge more for residential service than it charges to wholesale purchasers such as MEA.

"The rates of wholesale costs are being subsidized by the retail customers of Chugach," Heyman said.

Pauley said if the advertising campaign is enough to dissuade the board from pursuing an exemption from RCA oversight, the money will have been well spent.

"The easiest way to win this battle is to get the Chugach board to cease and desist," Pauley said. "If it goes to the commission, it's extremely expensive for us."

Jasper said Chugach isn't changing its direction as a result of MEA's ad campaign.

"We try to do a good job," Jasper said. "Reliability and then cost, in that order, is what our members want."

Heyman said Chugach's reliability ranks top on consumers' priorities.

"The core things members want are reliability and good services, and then low prices," Heyman said. "Look at our reliability statistics -- our reliability is much greater than MEA … We are all cooperatives; we're not supposed to be making gobs of money, but we have to cover our costs."

Contact Rindi White at rindi.white@frontiersman.com.