Utility watch group forms

Eric Burkett/Frontiersman

PALMER — Utility deregulation is a bad idea — that's the message from members of a new organization launched to oppose a local electrical cooperative's effort to exempt itself from state oversight.

Members of Utility Watch, a group organized early this week, held their first press conference Tuesday at the Colony Inn in Palmer to voice concerns about the efforts of Matanuska Electric Association to exempt itself from the oversight of the Regulatory Commission of Alaska.

"This deregulation proposal is not a good idea," Jim Sykes, a member of the group's steering committee, told reporters. Sykes, a former gubernatorial candidate and executive director of the Alaska Public Research Interest Group, was a key player in the effort last year to prevent Alaska Communications Systems from acquiring Matanuska Telephone Association.

MEA announced in November that it would seek permission from members to exempt the co-op from the oversight of the RCA, the state body which regulates utilities and other public services. Regulation "entails significant economic costs for MEA's members," read a resolution passed by the MEA board.

MEA insists it could respond to member complaints and concerns far more quickly with a board comprised of MEA members assembled for just that purpose.

The Palmer-based utility began sending out notices to membership in December and plans to begin counting ballots cast by co-op members in March. A final decision would be announced in April.

Tuckerman Babcock, MEA's director of government affairs and legislative liaison, did not immediately return a phone call Wednesday, but he has previously told the Frontiersman that "self-regulation," as MEA describes it, would save ratepayers hundreds of thousands of dollars.

Members of the new group disagree with Babcock's assessment.

"Anyone who has flown on an airplane in the last 15 years can tell you what deregulation does," Tony Pippel, another member of the steering committee, said. Pippel is also a member of the Palmer City Council.

"It seems like the cost of the regulatory process is reasonable," Pippel argued. RCA charges 30 cents per $100, or 3/10ths of 1 percent, he said. Deregulation will only end up costing ratepayers even more.

"We want people to understand the proposed deregulation gains nothing for MEA members," Pippel said in a release issued just before the conference. "Unregulated monopolies often result in higher rates, less accountability and worse service."

The steering committee also includes members Ann Campbell, Bonnie Burgoyne, Ken Klunder, Janet Kincaid and David Wachsmuth.

When asked if the organization had received any money from the International Brotherhood of Electrical Workers Local 1547, the union which represents MEA's linemen and with which the utility is often at odds, Pippel replied "no."

In fact, the only money the group has raised so far is $35 from one of its steering committee members to cover the cost of a post office box, Pippel said the day after the press conference.

MEA's relationship with the RCA has often been contentious. During a recent RCA investigation of expenses claimed by MEA in 1998, utility officials accused RCA of favoritism toward the IBEW because the state commission allowed IBEW assistant business manager and Wasilla resident Robert Zehnder to intervene in the case as a private MEA ratepayer.

MEA is the only power provider in its service area, which covers Mat-Su and Eagle River.

Utility Watch members said Tuesday they doubted whether an MEA-appointed board could be impartial.

Sykes also took issue with MEA's claim that it wants to save ratepayers the money it spends on regulation by RCA when it files far more complaints against other utilities and individuals than any other utility in the state.

"MEA says they want to save money, but they've been the biggest contributor to the bureaucracy," Sykes said.

In 1998 and 1999, MEA accumulated nearly $900,000 in legal expenses, which the utility identified as "miscellaneous" in its filings with the RCA.

Just last week, the RCA ruled "These expenses must be better supported before being allowed in rates. MEA has failed to properly explain these costs. It is impossible to determine the reasonableness of these expenses or whether they should be properly recovered as operating expenses, with the available information."

"The current management [of MEA] has a history of litigiousness and poking about in areas that are not appropriate to a regulated utility," Pippel said.