MEA needs to do right by customers

As we continue to keep a watchful eye on fast-rising gasoline prices, a few dozen of our Valley neighbors have an even larger potential energy crisis on their minds.

For the 50 Matanuska Electric Association customers enrolled in the cooperative’s Off-Peak Thermal Storage Program, they may be forced to make some costly decisions over the next year.

MEA has petitioned the Regulatory Commission of Alaska to discontinue the program, which allows those participants to pay considerably less for electricity used during off-peak times. The quid pro quo is those users don’t draw from the grid during peak hours for their heating needs.

It’s a plan that seems to make sense on the surface — users don’t tax the system during peak hours and in return pay 2.3 cents per kilowatt-hour to run their thermal storage units. That compares to the 10.9 cents other customers pay at all times.

The problem, MEA says, is that the co-op doesn’t get a special off-peak rate for that electricity from its provider, Chugach Electric Association. That means those 50 on the program are subsidized about $50,000 a year by the other 54,950 MEA customers, about 91 cents a year per customer.

It’s an issue of fairness, not money, MEA officials say.

We agree, it is about fairness, and while we understand the cooperative must look out for the great majority in this case, it must be fair to the 50 who signed up in good faith for a program MEA implemented on its own volition. Nobody forced MEA to give them such a low off-peak rate, but for those who saw this as a viable energy alternative, they invested considerable money to install thermal storage units. Should the RCA grant MEA’s request, these customers will be forced into some very costly decisions.

A Valley heating contractor says converting to a regular oil or propane system starts at an average of $8,000 to $10,000. Natural gas, where available, is much cheaper per month, but could cost thousands to hook up.

Replacing the thermal storage with traditional equipment can also sometimes require home renovations.

If the program simply doesn’t work, MEA does have an obligation to terminate it. At the same time, it must also do everything in its power not to leave 50 of its good-faith customers out in the cold.

One solution we could suggest includes a longer-range plan where over a five-year period rates can be adjusted upward until they reflect the regular rate everyone pays. Offer incentives for off-peak customers to convert earlier. For example, MEA could subsidize up to $5,000 of the cost if the homeowner converts in the first year, $4,000 the second and so on.

Yes, that’s potentially $250,000 and not insignificant, but it also reflects five years of subsidizing the program at $50,000 a year anyway.

In the long run, however, it would likely cost less, as customers take advantage of some financial help to convert their systems and are paying the regular MEA rate for power earlier rather than later.