MEA files request for CEA customers

PALMER -- Matanuska Electric Association followed through on a July board of directors' motion last week, and the administration is hoping the association's membership will triple as a result.

MEA last Wednesday asked the Regulatory Commission of Alaska to allow the utility to provide service to Chugach Electric Association's retail customers. The Palmer-based utility said its history of lowering rates to customers shows MEA oversight is in the public's best interest.

"It would benefit all Railbelt electricity customers if Chugach focused on building and maintaining its generation and transmission assets, which produce 'wholesale' power, while MEA focused on distributing that power to the retail customers," MEA's general manager Wayne Carmony said recently in a press release.

According to figures from MEA, Chugach provides retail electric service to more than 70,000 customers, most of whom live in Anchorage. Last year, Chugach also provided more than 94 percent of all the wholesale power sold to various communities along the Alaska Railbelt. MEA currently provides service to nearly 42,000 customers in the Chugiak-Eagle River area and in the Mat-Su Borough.

MEA's request came in the form of a filing last Monday that asks the commission to split into two parts the certificate under which Chugach provides electric service. One half -- authorizing the certificate holder to provide wholesale electricity service -- would remain with Chugach. If RCA grants MEA's request, the other half, which authorizes the provision of retail electric utility services, would go to MEA.

In the press release, Carmony said transferring retail authority to MEA will benefit the public because MEA can provide service to those retail customers for less, "despite the fact that Chugach enjoys several economic advantages over MEA which should render this impossible."

Carmony said Chugach has approximately half as many miles of distribution power lines to maintain as MEA -- 1,610 to MEA's 3,128. Chugach also has a customer density of 43.7 customers per line while one mile of MEA's line serves approximately 13.1 customers.

Because of its higher-density service area, Carmony said, Chugach sells more kilowatt-hours and collects more revenue than MEA for each mile of line it maintains. Last year, for example, MEA numbers show Chugach sold 690,797 kilowatt-hours of electricity per mile to MEA's 168,925 kilowatt-hours per mile.

" … unnecessary costs and inefficiencies are being passed on to Chugach residential consumers in amounts so great as to completely negate the economic advantages that result from having 3.3 times as many customers and 4.1 times as many kilowatt-hours sold per mile of distribution line," charged MEA's filing with the RCA.

This is not the first time a combined membership has been considered by the two service providers. According to information from MEA, Chugach made proposals to acquire MEA in 1994 and 1995. In 1998, MEA initiated an effort to acquire Chugach. None of the proposals were successful.

"Although to date all such proposals have been unsuccessful, both cooperatives recognize and admit there are economies of scale that can be realized by combining the distribution operations of the two organizations," the filing states.

Carmony said MEA seeks a broad-based public process under the oversight of an RCA task force to ensure the interests of the electric consumers remains the focal point in evaluating MEA's request.

Agnes Pitts, RCA's chief of consumer protection and public information, said her office received the filing Monday.

"It's currently being reviewed," Pitts said. "Once we determine that it's complete and there are not any pieces missing, a notice will be issued."

Pitts said she expected the notice announcing the 30-day public comment period to be issued shortly, and said it will be advertised in newspapers in the affected communities. While Pitts said public comments about the proposed consolidation are not the only factor RCA will use to determine its decision about MEA's request, the opinion of members potentially affected are key.

"Certainly, it's important to hear from both MEA customers and Chugach customers," Pitts said.

After the public comment period is closed, Pitts said the commission could choose one of several options.

"After the notice period is over, I would suspect that the next thing that would happen would be that the commission would be issuing an order," Pitts said.

That order, Pitts said, may request additional information, set a hearing date or ask for a list of witnesses, just to name a few options.

Pitts said a lot is still up in the air, since this is an unusual request.

"I can't recall that there's ever been a filing request to basically roll a portion of the customers from one utility to another," Pitts said. "The situation is itself different and unusual."