New year brings benefits to MEA customers

MAT-SU -- The new year will bring two benefits to Matanuska Electric Association customers -- lower rates and a check refunding a portion of their last two years worth of electric bills.

The lower rates -- about 5 percent for most customers -- will go into effect Thursday. The Regulatory Commission of Alaska determined in August that Chugach Electric Association, with whom MEA contracts to provide power, had overcharged its customers and ordered the company to lower wholesale rates and refund several million dollars to its large wholesale customers.

"It's a pretty significant decrease," MEA spokesman Mike Pauley said Friday. "For a single rate change, it's pretty big."

It may be the largest quarter-to-quarter rate reduction in MEA's recent history -- surpassing even the three-percent base rate reduction MEA put into effect last January, but Pauley said it's quite different than that one or the other previous 14 reductions.

Those, he said, were requested and put into effect by the MEA board, reducing incrementally the approximately 40 percent of each customer's bill that goes to pay MEA's costs. This reduction, he said, comes directly from the approximately 60 percent of customers' bills that goes to Chugach as part of the wholesale power supply agreement. Members who use more electricity will see a greater benefit -- up to about 6 percent for some users, he said, although the majority of MEA members will land in the 5- to 5 1/2-percent savings area.

"It definitely goes down for everybody," Pauley said

The refunds, estimated to average about $50 per customer, will most likely be sent out in February or March. They'll go out in the form of checks to customers who will receive refunds larger than $25.

Refunds of less than $25 will be returned via credit on customers' electric bills, and former MEA members with refunds greater than $1 will get checks in the mail, similar to the distribution of MEA's capital credits.

Pauley added that the refunds must first go through the RCA for approval. The utility regulating commission, he said, must verify that the refunds are being distributed fairly to MEA's customers.

MEA doesn't anticipate any difficulty in getting the refund methodology approved, and Pauley guessed the commission would likely give the go-ahead by late January or early February, after which MEA can begin cutting checks and stuffing envelopes.

"Assuming this plan is approved, individual refund amounts will vary, based on the amount of energy actually purchased during each quarter of the refund period," Pauley said in a recent press release. "Our present calculations show the sample refunds range from $32 for a member purchasing 500 kilowatt-hours of electricity every month of the refund period, to $326 for a commercial account using 5,000 kwh per month." The actual amounts of each refund will be finalized in mid-January, when MEA compiles its fourth-quarter sales results.