Regulatory Commission of Alaska

Public Comment for TA886-2 by Michael Taylor

The application by Alaska Power and Telephone for a rate increase affecting ratepayers in the City of Gustavus demands critical evaluation.   The company is proposing a uniform across-the-board increase to all their communities to recover their return shortcomings company-wide since their last rate case.   However, they have not documented that their costs for serving Gustavus specifically increased by the 13.3% they want to charge us.  Because the Gustavus system is a hydroelectric generation system, the costs are largely fixed investment costs from the original construction.  The backup generator facility is owned by the City and leased to APC at a nominal and unchanging rate.  Inflation and interest rates have been very low for the last three years.   They have only two local employees and relatively little maintenance costs but are making upgrade improvements to remediate deficiencies that were present when they purchased the system from the original owner.  I question that their costs have risen anywhere near 13.3% and I believe RCA should carefully examine their cost increase justifications specifically for the Gustavus facility and operation.  Gustavus rates should only be increased as justified by the actual cost increases on a kilowatt hour basis.  

Further the rate increases proposed will work against the goal of increasing electrification of our energy system.  Global climate change is an existential threat.  Our electric utility should be encouraging and enabling its customers to switch to renewable electric sources for powering their businesses, homes, vehicles, and appliances.  To the extent that electricity demand is elastic, an increase in rates discourages the electrification we desperately need.  This is especially the case with falling prices for competing fossil fuels.  Higher electricity unit costs discourage customers from buying electric vehicles and heating homes, businesses, and public buildings with heat pumps, for example.  

The customer charge increase also is a disincentive for electrification.  Many homes here in Gustavus are only seasonally used.  Some of those owners may decide to disconnect from the electric system and switch to fossil-fueled generators for the short times they are using their properties.  These rate increases may further decrease electricity sales and revenue, leading to yet another request for a rate increase, while increasing climate damaging greenhouse gas emissions.  

AP&T needs to demonstrate best practice.  Their company vehicles here in Gustavus all have internal combustion engines.  That doesn’t demonstrate a belief in electrification of transportation.  Further they have to buy diesel fuel for their vehicles whereas they could power company EVs at zero cost.  They should be demonstrating best practice with electric company vehicles.

Rather than ask for a rate increase that will hurt ratepayers and discourage electrification, AP&T should work to increase electric sales and revenue, by lowering rates, and encouraging more customers to hook up and to electrify their heating, cooking, hot water systems, and transportation wherever possible.  I urge you to reject their application to increase rates for Gustavus and urge them to build a bigger pie.

Type

Comments

Date Filed

10/23/2020

Tracking Number

TR2005921

Filed By

Michael Taylor

Entities

Certificate(s)

Means Received

Internet

Related Matters

TA886-2	Alaska Power Company - Revenue Requirement Study

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