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Chugach Raises MEA Base Rate 42%

Regulatory Commission of Alaska Approves Chugach Electric Association’s 42% Base Cost Increase to Matanuska Electric Association

Palmer, AK – Over Matanuska Electric Association’s strong objections, on February 6 the Regulatory Commission of Alaska approved a 42% interim increase in the base cost of wholesale power paid to Chugach Electric Association.  MEA purchases almost all of its power needs from Anchorage-based Chugach under a contract that expires at the end of 2014.  The RCA also authorized Chugach to increase rates for its other customers, in amounts less than the 42% increase for MEA.  The 42% interim rate increase is potentially refundable, depending on the final outcome of a formal RCA investigation that will likely take a year to complete.

Over the course of a year this interim increase will cost MEA’s members about $8.7 million, or $24,000 per day; significantly more during the cold winter months when electrical consumption is highest, and less during the lower-usage summer months. “The average MEA consumer uses about 750 kilowatt hours per month, and this means the average bill will be about $9.00 per month higher than it would have been if Chugach hadn’t sought this rate increase,” said MEA spokesperson Kevin Brown.

Chugach is basing this rate increase on the additional costs resulting from its new SouthCentral Power Project, a gas turbine power plant located near the intersection of Minnesota and International Airport Roads in Anchorage.  Chugach believes that this plant will be more fuel-efficient than the old Beluga plant that it replaces, but it has not yet quantified the extent to which fuel savings might partially offset the 42% rate increase.

MEA’s members pay for increases in the cost of Chugach power through the Wholesale Power Cost Rate Adjustment (WPCRA) surcharge on their monthly electric bills.  The 42% Chugach rate increase will be passed through to MEA members’ bills starting in April.

MEA will work to keep members informed as this situation develops.

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