Corrected AVEC power subsidy rises in 44 village lines, falls in Ambler and Noatak

Electricity subsidies are rising for customers on 44 of 46 Alaska Village Electric Cooperative community lines, after the Regulatory Commission of Alaska found errors in the figures used to set the credits. Two lines, Ambler and Noatak, will see their subsidy fall instead.

The credits come from Power Cost Equalization, the state program paying part of rural residential bills, on up to 750 kilowatt-hours monthly, for power costs above a base rate tied to average residential rates in Anchorage, Fairbanks and Juneau. The commission approved the new amounts in a letter order, its written approval to the utility, on Sept. 24. They apply to bills rendered on or after Sept. 25. The Alaska Energy Authority pays the credits.

The July calculations "were developed using incorrect data inputs," commission utility financial analyst Oz Tremblay wrote in a staff memorandum, tracing them to "multiple formula errors in the previous annual report" in AVEC's program file. Staff rebuilt non-fuel costs from data AVEC gave the energy authority for the 2024 test year, the base period for the costs, and also updated the average rates to AVEC's current rates.

In the residential and small commercial class, 44 lines now carry the same credit, $0.5663 per kilowatt-hour. Thirty-seven lines gained 10 cents or more, with Stebbins-St. Michael rising the most, from $0.2871 to $0.5663. Ambler falls from $0.7244 to $0.5663, and Noatak falls from $0.7608 to the same figure. Bethel, at $0.4171, and Yakutat, at $0.5218, sit below it.

Each line's credit is the lesser of $0.5663 and its average residential rate minus the base rate. The memo does not say where $0.5663 comes from. It is not the statutory maximum, which the same table puts at about 74 cents: 95 percent of the gap between the 21.85-cent base rate and $1.

The commission proposed raising the base rate from 20.38 cents to 22.11 cents on May 1, then adopted 21.85 cents on June 23, effective with July 1 bills, a 7 percent increase.

The memorandum does not say who made the errors. The order also does not say whether the July amounts reached customer bills in July, August or September, or whether anyone is owed money. The record reflects only the commission staff's account. AVEC's position appears only as the staff's statement that it concurs.

Fuel costs still come from the 12 months ending December 2025. Staff recommended waiving a rule that the fuel period be more recent, citing the errors and "the complexity of AVEC's filings." AVEC will work with staff on current fuel costs in its next filing.

AVEC must notify customers of the new amounts and has until Oct. 9, 15 days after the order, to challenge the math. "Any reconsideration request must be submitted within 15 days of the date of this Letter Order," wrote Joy Gordanier, the commission's advisory section manager.