Electric ratepayers from Anchorage, Mat-Su, Homer, Fairbanks and places in between could be asked to pay expensive costs for Matanuska Electric Association's latest scheme.
MEA recently asked the Regulatory Commission of Alaska (RCA) to force Railbelt utilities into a single entity. A second proposal would require a mandatory backup energy pool.
Critics have long urged MEA to cooperate with other utilities, as well as to explore options besides its present coal and gas generation plan.
So why would MEA suddenly ask the RCA to utilize unusual and sweeping governmental powers to force creation of a single Railbelt utility, just as the Alaska Energy Authority (AEA) is embarking on a comprehensive "unified system operator" study that might achieve a similar goal? It's curious.
This is the same MEA that loudly declared its independence from other Railbelt electric utilities, with a plan to build its own gas and coal generating plants. Never mind that MEA has no apparent access to a gas supply. Evidence suggests MEA coal plant costs are grossly underestimated, which could result in excessive future charges to ratepayers. (Please see the Foster report at www.mearatepayers.com/assets/MEA_IRP_Review_Ratepayers1.pdf).
When RCA commissioners asked MEA about its proposal, the answers were less than satisfying. One commissioner asked whether MEA invited any other utilities to support its forced merger request. Nope, not one.
When asked what MEA would do if it actually built planned coal and gas generation and then an areawide utility were created, MEA said it would sell or lease the facilities to the new utility. Translation: New Railbelt utility ratepayers would likely pick up the tab for MEA's expensive new generation and potential cost overruns.
To top it off, MEA indicated it did not intend to participate in the impending Alaska Energy Authority "unified service operator" study -- a public process that might actually create a Railbelt utility operation similar to what MEA is asking the RCA to force into existence. The message: "MEA's way or no way."
MEA said that previous such studies had gone nowhere and that participating in a new one would be a waste of time and resources. In fact, the upcoming AEA study puts all options on the table to consider the most cost-effective and reliable electrical generation options. (Visit AEA's Web site at notes4.state.ak.us/pn/pubnotic.nsf/0/ff2c129f824593c8892573550081233c/$FILE/AEA0800-7425RFPFinal.pdf).
In addition, the AEA study invites the participation of regulators, consumer groups, the public and other stakeholders to help explore all possibilities -- something that hasn't happened in the past. Other Railbelt utilities are apparently willing to participate in AEA's study.
MEA's credibility gap is exacerbated by the fact that it is the only major utility that does not belong to the statewide Alaska Power Association. MEA declined to participate in the current Alaska Natural Gas Development Authority Railbelt energy study and it did not join a Joint Action Agency in 2005, even though it stated support for such a thing to the House Finance Committee on April 1, 2004. All the other utilities continue to be out of step except for MEA.
The best way MEA could demonstrate its good intent would be to join the upcoming Alaska Power Authority study. MEA could also invite members of the public to brainstorm better options to its coal and gas generation plans while the AEA study is being conducted.
The public and other Railbelt utilities stand to gain a great deal of useful information and cooperation through the AEA study. We all need to find clean, reliable and cost-effective energy that will benefit our children and grandchildren.
Until the AEA process is given an opportunity to work, the Regulatory Commission of Alaska has no justifiable cause to accept MEA's request to force other Railbelt utilities into its proposal. Perhaps the RCA should recommend that MEA pursue its goals through the AEA process and demonstrate its willingness to work with others.
The RCA welcomes public comments on MEA's proposal R-01-007 at rca@state.ak.us until 4 p.m. Tuesday.
Jim Sykes is a founder of UtilityWatch, a consumer watchdog group.
