Anchorage’s main electric utility is planning to raise base rates for the first time in three years. Chugach Electric Association is expected to file a rate case with state regulators Friday to increase electricity rates by about 5.9% for most residential and business customers from Anchorage to Whittier.
That would mean, for example, if your monthly bill is around $150, you can expect it to go up by about $9 a month.
Rates will ramp up starting with an interim increase of 3.6% beginning Sept. 1. If approved, the rest of the 6% increase will kick in September 2024. The interim increase is refundable, meaning that if the final, approved rate increase is less than 3.6%, the utility will refund the difference customers paid in the interim period.
The last time Chugach increased its base rate was in 2020. CEO Arthur Miller said in a recent information session that the utility has seen a decrease in electricity sales in the last few years because customers are investing in energy efficiency measures – reducing their electricity use.
Even as sales have fallen, Miller said, inflation and supply chain disruptions have increased the utility’s expenses.
“As an electric utility, we are extremely capital intensive. So it’s essential that we’re able to adjust rates to make sure that we recover a lot of our costs, which are fixed costs,” he said in an information session on June 19.
Another goal is to equalize the rate structure across their whole service area, Chugach chief legal officer Matthew Clarkson said during the session.
In 2020, Chugach purchased the other major Anchorage utility, Municipal Light & Power, which historically served downtown Anchorage, Midtown, Airport Heights and Mountain View. Since the sale, the former ML&P service area has continued to operate on a different rate structure.
“This rate case really is about unification of rates for the two legacy service territories and to ensure that Chugach is getting back to recovering its full cost of service,” Clarkson said.
There will be a 30-day comment period for the public to weigh in on Chugach’s proposal with the Regulatory Commission of Alaska.
Kavitha George is Alaska Public Media’s climate change reporter. Reach her at kgeorge@alaskapublic.org. Read more about Kavitha here.
