ANCHORAGE (KTUU) - The Regulatory Commission of Alaska is extending the timeline for a final decision on the billion dollar deal between Chugach Electric Association and Municipal Light & Power. The RCA's media liaison, Grace Salazar provided KTUU with an update on the decision Thursday evening, just one day before the original deadline of February 28. The new deadline for regulators to make a ruling is May 28.
During an informal conference earlier this month, representatives from both utility providers urged the board to meet the February 28 deadline, commenting that further delays could put their arrangement in jeopardy.
Chugach is proposing to pay the Municipality of Anchorage approximately $1 billion to acquire ML&P assets which are worth an estimated $715 million- meaning Chugach Electric would be subject to a $250 million acquisition premium. The group in charge of the review is extending it's process in order to consider Chugach's request that the RCA authorize its recovery of all costs related to the the transaction through future rates.
Those costs would include the acquisition premium and according to the RCA, that could be a problem in accordance to Alaska Statute 42.05.441 - Section B.
The statute reads: "In determining the value for rate-making purposes of public utility property used and useful in rendering service to the public, the commission shall be guided by acquisition cost or, if lower, the original cost of the property to the person first devoting it to public service, less accrued depreciation, plus materials and supplies and a reasonable allowance for cash working capital when required."
The RCA issued the extension to spend more time determining whether it can waive that statute, based on claims that the benefits of this transaction to the ratepayers would best serve public interest. You read the full order HERE.
KTUU has reached out to representatives from both Chugach Electric Association and Municipal Light & Power regarding the announcement.