Regulatory Commission of Alaska

Public Comment for U-21-066 by Connie Fredenberg

I would like to respond to Jeremiah Niemuth’s comment regarding the motives for de-regulating the Gwitchyaa Zhee Utility Company (GZUC).  
For the last 12 years I have provided technical assistance for utility management to independent, non-regulated, rural electric utilities.    
I was invited to be part of a Tanana Chiefs sponsored site visit to Fort Yukon and GZUC in early August.  I was able to tour the generation plant, heat recovery system, and have lengthy discussions with all the local staff – including administrative.  They are exemplary.  Long term highly capable workers mixed with an impressive new generation of well-trained, motivated, and dedicated staff – including one of the only two women operators I’ve ever met in a village power plant.  It’s rare to find such a staff - I do not expect substandard service will be an issue.  
I advised GZUC leadership to request a waiver from economic regulation in the same manner that Kipnuk Light Plant (KLP) did back in 2019.  I helped KLP, a municipally owned utility, through that process.  If a utility is owned by a local entity there is no requirement for it to be economically regulated.  Both GZUC and KLP had overlooked one document requesting exemption from economic regulation during the process to become a certificated utility.  KLP was granted exemption and de-regulated after filing that letter with the RCA, so I recommended GZUC do the same.  
Like GZUC, KLP had not changed the non-fuel portion of their rate in many years.  The process for regulated utilities to change rates is far more complicated than non-regulated utilities.  (I admit intentionally avoiding work with regulated utilities for that very reason.)
KLP was not able to bill for the full cost of providing power and struggled to afford proper maintenance for generating equipment.  As a regulated utility the full residential customer rate in 2018 was $0.4341 with a PCE rate of $0.2088 making for an effective rate of $0.2253 after PCE.
In 2019, after de-regulating and doing an Annual Report to the RCA, the customer rate for KLP customers did go up to $0.6902 for all rate classes.  But the PCE rate went up to $0.4899 making for an effective rate of $.2003.  PCE customers came out better than before.
More importantly, KLP now collects on the actual cost of producing power and can afford to keep up with preventive maintenance.  A well run, self-sustaining utility is a good thing for all communities.  Everyone wants reliable power.  While GZUC is owned by Fort Yukon’s Village Corporation, it is not operating as a for-profit business and contributing to dividends.  It is, in fact, losing money.  The Corporation would like to keep the utility operating - not as a for-profit business - but as a self-sustaining enterprise.

Type

Comments

Date Filed

9/16/2021

Tracking Number

TR2105422

Filed By

Connie Fredenberg

Entities

Certificate(s)

Means Received

Internet

Related Matters

U-21-066	Petition-Gwitchyaa Zhee Utility

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