Regulator stalls Hydro One’s bid for Juneau utility

AEL&P lineman Eric Nielsen climbs the leaning tower. (Courtesy AEL&P)

A Canadian power company’s bid to acquire Alaska Electric Light & Power Company has suffered a minor setback.

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State regulators say Hydro One of Ontario will have to register with the state of Alaska, which restarts the regulatory process from scratch.

Hydro One applied to Alaska’s utility regulator in September to approve its purchase of Juneau’s power company.

The filing with the Regulatory Commission of Alaska offered a rare opening for public comment before the months-long acquisition is finalized.

The commission received 34 comments, most skeptical or outright hostile to AEL&P’s sale to the Canadian corporation.

Hydro One and a sister entity requested the commission waive a requirement to obtain an Alaska business license.

The Regulatory Commission denied the waiver Wednesday.

“Because the burden of registration is minor when weighed against the benefit to the public from the additional safeguards afforded by registration and the availability of additional information not otherwise provided under our regulations,” the RCA wrote. “We do not find good cause to waive the… requirement that Hydro One and Olympus Equity include proof of registration to do business in Alaska as part of their application to acquire a controlling interest in AEL&P.”

The ruling effectively throws out the application, creating a blank slate.

“This docket is closed and if the entities file a new application then we would start a whole new process,” RCA spokeswoman Grace Salazar said. “There may be a public comment period again.”

AEL&P and its parent company release a statement.

This is not a substantive ruling on the merits of the application,” the statement said. “It is an issue that can be remedied by refiling the application after Hydro One and Olympus Equity LLC register as foreign entities with the state of Alaska.”

The rebooting of the public process comes as the Juneau Assembly continues to openly float the idea of making a bid for Juneau’s utility.

“Since the clock on this has reset. We have an opportunity to do some more studying before we jump in and make sure we can protect people who buy electricity here in the capital city,” Assemblyman Jesse Kiehl, who chairs the city’s finance committee, said.

The Assembly recently commissioned an $11,000 study on the underlying issues involved in the power company’s sale, which was discussed at length at Wednesday’s committee meeting.

“There was broad agreement that the city needs to have a role in protecting Juneau ratepayers from unreasonable or unnecessary increases in the future,” Kiehl said. “With no local owner anymore the risk of that goes up. But we didn’t reach any consensus or take any votes on how to do that.”

Renewable Juneau, a nonprofit organized to promote carbon alternatives, has expressed reservations over the deal, applauded the ruling.

We’re very glad that there will be more time to understand what this proposed sale means for Juneau and what are our options are going forward,” Danielle Redmond, coordinator of Renewable Juneau, said. “If the issue does come back before the commission we’d like to see the Attorney General’s office get involved and bring their resources to the table.”

Until three years ago, AEL&P had been locally owned for more than a century. It was sold to Spokane-based Avista for $170 million.

Hydro One announced earlier this year it was buying Avista for a reported $5.3 billion. It will still need state and federal approval to complete the deal.

Jacob Resneck is CoastAlaska's regional news director in Juneau.

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