ANCHORAGE (KTUU) - The sale of Municipal Light and Power to Chugach Electric Association is a billion dollar deal that's been discussed for years, but the consolidation is closer than ever before: On April 1st, Chugach filed an Asset Purchase and Sale Agreement with the Regulatory Commission of Alaska (RCA).
That filing included an application to expand Chugach's service territory to include areas that are currently covered by ML&P.
Voters approved the sale in April of 2018 with more than 65% of the votes cast in favor of the deal. This year, proposition 8 on municipal ballots received support from the majority, following up on Chugach's permission to continue operations at ML&P substations and lines that exist on municipal property.
But even with the approval of the voters, the deal can't close until the RCA has reviewed and approved the terms of the sale.
During a phone call on Friday afternoon, Grace Salazar, the media liaison and chief of the RCA Consumer Protection & Information Section, told Channel 2 that the RCA is currently working to ensure that Chugach had completed its applications. The six-month process of reviewing the terms and conditions of the agreement between Chugach and ML&P won't begin until that initial confirmation is completed.
Despite the success of this deal on back-to-back ballots, it hasn't come this far without controversy. Last January, the formerer Chair of the ML&P Comission stepped down, citing a lack of transparency from Chugach Electric and the Municipality of Anchorage ... Then in April, residents spoke out about their skepticism regarding the arrangement during a town hall discussion regarding the sale.
At the time, Chugach Electric CEO Lee Thibert assured residents that the transaction wouldn't be a fator in whether or not rate-changes occur.
"Increases in labor, those types of things, or a change in the number kilowatt hours sales, things are not in our control," he said, "We can't really do anything about, but due to this sale, the purchase price will not increase rates."
The deal that's under review from the RCA provides terms that ensure rate-payers a savings of over $200 million dollars over a 40-year span, as well as a guarantee that the consolidation will not result in layoffs for either company.
Pending final approval, Chugach hopes to close the deal within 120 days. It is estimated that the two utilities would become one around February of 2020.