RCA closes AEEC deregulation enquiry

The Regulatory Commission of Alaska has closed an investigation into the legal propriety of an election planned by the Alaska Electric and Energy Cooperative, seeking deregulation of the Kenai Peninsula electricity utility’s generation and transmission system. AEEC is an affiliate of Homer Electric Association, the electricity utility for the western side of the Kenai Peninsula. AEEC owns and operates HEA’s generation and transmission assets, while HEA operates its electricity distribution network.

Last year HEA conducted a ballot of its members, seeking approval from the RCA to become deregulated, a move in which the HEA board would, in effect, have taken over the regulatory function. A separate election was scheduled for the deregulation of AEEC. But, with AEEC’s only member being HEA, the proposal was that, if HEA’s members opted for deregulation, HEA would automatically vote to deregulate AEEC, thus deregulating all of the HEA distribution, generation and transmission operations.

Two HEA members, Peter McKay and Bob Shavelson, complained to the RCA over the AEEC election, claiming that the AEEC ballot denied the rights of HEA members to participate in the AEEC deregulation decision. The two complainants cited as precedents two previous cases in which an Alaska regulatory commission has ruled in favor of the need for a broad vote of the consumers for an electricity utility to vote in a deregulation election.

The RCA responded to the complaint by making a tentative finding that the AEEC election was defective, ruling that the notice for the election was void and inviting HEA and AEEC to respond the finding. But the HEA members voted against the deregulation of HEA, thus triggering a cancellation of the AEEC deregulation election. Consequently the challenge to the AEEC election became moot.

On Feb. 16 the RCA issued an order saying that McKay and Shavelson had withdrawn their complaint and that the investigation into the AEEC election had been closed.

- ALAN BAILEY