Anchorage Assembly approves revised Chugach-ML&P deal
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On Oct. 30 the Anchorage Assembly approved changes to the terms of the proposed acquisition of Municipal Light & Power by Chugach Electric Association. The Municipality of Anchorage owns ML&P.
As reported in the Nov. 3 issue of Petroleum News the parties to a Regulatory Commission of Alaska hearing into the acquisition agreed to a series of revisions to the originally agreed terms of the purchase, with the stateís Regulatory Affairs and Public Advocacy Section yet to determine its position on the changes. The RCA commissioners and the parties in the hearing have agreed to continuing the hearing, reviewing the changes to the deal rather than continuing to review the deal in its entirety. So, the question of whether the deal will go through now hinges on whether RCA will approve the changes - the Chugach Electric board has already approved the modifications.
The Nov. 3 Petroleum News article incorrectly stated that the statutory deadline for completing the RCA hearing is Nov. 19. Originally that was the statutory deadline, but the deadline has been extended to Feb. 17.
The overall concept behind the proposed ML&P purchase is the consolidation of the two existing Anchorage based electric utilities, to eliminate duplicated functions and improve operational efficiency.
Changes to the original terms of the purchase include a reduction of the total purchase price; the creation of a $36 million fund for rate relief for existing ML&P customers; the dedication of $15 million in funding for a project addressing substance use disorder issues in Southcentral Alaska; the dismissal of appeals over the prudence of ML&Pís construction of its Plant 2A power generation facility, and over the utilityís approved rate of return on equity; and a revised agreement over the accounting for some of the use of Beluga River field natural gas.
- ALAN BAILEY