ANCHORAGE (KTUU) - Municipal Light & Power and Chugach Electric officials met Friday at City Hall to lay out the acquisition deal approved by Anchorage voters in Anchorage.
Anchorage Assembly members called the sale of ML&P to Chugach Electric "one of the biggest deals in city history."
Friday, the two parties met at City Hall and laid out the deal as it stands ahead of public commentary opportunities.
The deal unveiled Friday is similar to details previously announced, but some changes have been made to better accommodate assets, specifically the Eklutna Hydroelectric Project.
The $1 billion acquisition deal of ML&P to Chugach Electric was initially comprised of a lump sum total of $712 million to cover ML&P's debt and equity.
Then over the next 30 years, an additional $170.3 million would be paid as an acquisition payment along with $142.1 million in place of taxes.
Now, those numbers have been tweaked.
The initial cash payment will be $767 million instead of $712 million, and the payment over taxes will reach $166.8 million.
The importance of shuffling the money to incorporate the Eklutna project in its totality was maintained in a PPA, or Power Purchase Agreement with Chugach, effectively securing power generated at Eklutna for Chugach for 35 years.
Part of that deal still hinges on what Matanuska Electric Association wants to do, as it owns an undivided interest in Eklutna.
While this is another step toward a completed contract, it's still not the end-all deal. Instead, the draft will be the basis of the purchase agreement, which will be binding and finalized in December, according to executives.
There will be several work sessions and public comment periods scheduled in the next two months, for people to weigh in on the deal's progress before it's final.
Overall, the parties involved said Friday that they were happy with the direction of the sale. Chugach CEO Lee Thibert told Channel 2 that today's agreement presented a new milestone towards the deal which Anchorage voters wanted back in April.
"The term sheet locks in some important details," said Thibert. “There is still more work to do as we complete the due diligence process and receive more information and data from ML&P and the city. We have made good progress and will continue to provide updates along the way,” he said.
Thibert addressed concerns that existing customers raised at voting in Spring - will their rates go up as a result of the merger? According to Thibert, they won't.
"Rates won't go up," Thibert said, explaining that initially the rates will remain flat for the next three or four years, and after that, the hope is for them to actually decrease.
"As efficiencies are added, costs go down, so that's the goal," Thibert said.