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ML&P requests rate relief


Municipal Light & Power seeks rate increase to fund investment in Southcentral Power Project -Phased approach over two years keeps ML&P rates competitive in Railbelt-

ANCHORAGE, AK - (Sept. 18, 2013) - Municipal Light & Power filed for rate relief with the Regulatory Commission of Alaska. ML&P is seeking rate relief primarily to fund its investment in the Southcentral Power Project, which went into service on January 31, 2013.

The utility proposes a phased approach in order to implement the increase over a two-year period. The increase to the average customer's total monthly bill from today's rates will be about 17 percent when interim rates are expected to take effect in late October and another 5 percent in early 2016 when Phase 2 permanent rates are implemented.

Interim rates will be granted on a refundable basis while the RCA analyzes the filing, which can take up to 15 months.

"Large investments, such as our investment in SPP, require a change in rates," said ML&P General Manager James Posey. "We're at the point where we need to make large investments in order to maintain our safe, reliable and affordable electric service that is so mission-critical to our customers."

Currently the lowest in the Railbelt, ML&P's rates will remain competitive even with the rate increase.

Fuel-cost reductions associated with SPP's more efficient plant have already provided substantial savings for ML&P and its customers. ML&P estimates, at today's fuel prices, a $4.4 million annual fuel-cost savings with the new technology. Fuel prices are expected to rise.

Savings reflected in ML&P's Cost of Power Adjustment charges began in April and will continue to be reflected in COPA charges over the life of the new plant.

In addition to a fuel-efficiency improvement of up to 30 percent over older generation units, other benefits of SPP include:

 *   Enhanced power supply reliability. More than 90 percent of ML&P's older thermal generation assets are more than 30 years old, with some units than 40 years old;
*   Ninety percent or more reduction in carbon monoxide and nitrogen oxides emissions with the modern technology;
*   Significant savings by avoiding future maintenance expense for older, relatively inefficient gas turbines; and
*   Operational expense savings from a reduction in market gas purchases that ML&P would otherwise have to make to augment production from the Beluga River Unit gas field.

Information about how customers can control their energy bills through conservation is available online at http://www.mlandp.com/powersmart.htm.

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