Sale of ML&P Involves All AWWU Ratepayers

by Bob Maier, a resident of Anchorage who is both an ML&P and AWWU Ratepayer

Proposition 10, which was passed by Anchorage voters this spring, began the process of selling Municipal Light and Power (ML&P) to Chugach Electric.  Proposition 10 passed decisively 65% to 35%.  None of the discussions before or after the vote included an important stakeholder group: all Anchorage Water and Wastewater Utility (AWWU) ratepayers. Since AWWU and ML&P are linked together via state statute, AWWU ratepayers will be affected by this sale.

Title 42 of Alaska State Statute is entitled “Public Utilities and Carriers and Energy Programs.”  AS42.05.711(b)(2) defines how municipally owned utilities – AWWU and Solid Waste Services – are exempt from regulation by the Regulatory Commission of Alaska (RCA) unless that municipality owns an electric utility which competes with another electric utility.

AS42.05.311 defines the competition which exists between ML&P and Chugach Electric.

It is this current competition which triggers the RCA’s regulation of AWWU.  For Solid Waste Services, the RCA has issued a waiver from their oversight.  For AWWU the RCA has not issued such a waiver.  If ML&P is sold to Chugach Electric, their competition against each other will cease to exist, making the Anchorage Assembly the rate-setting authority for AWWU, as it is now for Solid Waste Services.

The removal of RCA oversight of AWWU has been a goal of Anchorage municipal government in the past. In 2004, during the term of Mayor Mark Begich, who has also been retained as an advisor in the sale of ML&P to Chugach Electric, one of the Municipal Legislative Priorities was to “Regulate our own water and wastewater utilities.”  In that same year, House Bill 108 (HB108) was introduced to the state legislature by Representative Tom Anderson.  HB108 would have changed the relevant section of Title 42 ending RCA authority over AWWU.  HB108 eventually stalled in Senate Labor and Commerce under Chair Con Bunde and never became law.

Not all residents of Anchorage are ML&P ratepayers.  Some residents are served by Chugach Electric or Matanuska Electric. But Anchorage ratepayers of all three electric utilities do have one common thread . . . that of being AWWU ratepayers. Regardless of one’s opinion on the pros or cons of the relationship between the RCA and AWWU, this aspect of selling ML&P should have been disclosed to the public so that the effect on AWWU could have been discussed before the April 2018 vote.

On Tuesday, December 4, the Anchorage Assembly will hold their second public hearing on the sale of ML&P to Chugach Electric.  If approved, the sale of ML&P will then move on to the Regulatory Commission of Alaska for public comment and decision.