RCA investigates CEA rate increase

The Regulatory Commission of Alaska has opened an investigation into a rate increase proposed by Southcentral utility Chugach Electric Association. Chugach Electric has told the commission that it needs to raise its rates to cover a $21.3 million revenue shortfall resulting from the end of an agreement under which the Southcentral Alaska utility had been supplying power to Palmer-based Matanuska Electric Association. Matanuska Electric has recently replaced its Chugach Electric supply with its own power from a new power station at Eklutna.

To recover its loss of revenue Chugach Electric wants to increase its rates for the wholesale power delivered to the city of Seward and for retail sales to Chugach Electric’s own customers. The utility also wants to increase the fees that it charges for transporting power through its transmission system, as well as increasing the rates for some other services. The utility says that the rate increases would likely trigger a 6 to 7 percent increase in Seward electricity bills, and a 2 to 4.5 percent increase for Chugach Electric customers.

The changes went into effect on May 1, on a refundable basis if the new rates are not ultimately approved.

On April 30 the commission issued an order setting the formal wheels in motion for an investigation into the proposed rates. In that order the commission said that it is granting the requested increases in rates for power sales but that Chugach Electric cannot recover any of the revenue shortfall from an increase in the rates for power transmission and other services.

- Alan Bailey