Haines and Skagway power bills could rise about $180 a month to pay for an undersea cable

Electric bills in Haines and Skagway could rise by about $180 a month under a proposed fund to replace the undersea cable that carries power to both towns, according to the state's consumer advocate.

State regulators haven't approved the fund or opened it to public comment. On Monday, the cable's owner, Goat Lake Hydro, answered their questions about it.

The advocate, a section of the attorney general's office that represents ratepayers, estimated the fund would add almost 30 cents a kilowatt-hour. That's about $180 a month for a household using 600 kilowatt-hours, before any help from the state's Power Cost Equalization subsidy. The advocate said it couldn't tell whether the costs would qualify.

The cable is the only line between Goat Lake's three hydro plants and the towns, according to the company. Goat Lake sells all its power to the local utility, Alaska Power Company, and its costs reach customers through a surcharge. Both companies belong to Alaska Power & Telephone.

The fund exists because the cable lost its insurance. After one of its two segments failed in 2019, the insurer paid $7.8 million toward replacing it, then declined to renew.

In May, the Regulatory Commission of Alaska found that no commercial insurance was available. It ordered Goat Lake to propose a fund to save for repairs and replacements instead, to help protect ratepayers from rate shock.

The commission also found that Goat Lake broke a condition of its state certificate. "GLH should have notified the Commission of the lapse in insurance coverage and sought authorization for an alternative arrangement. GLH did neither," the order said. As a remedy, shareholders must pay part of future replacement costs, matching the share of the cable's life that went uninsured.

Goat Lake's plan would build the fund to about $157 million: $66.9 million by 2038 for the older segment and $89.7 million by 2063 for the newer one. Under the company's model, ratepayers would start paying about $700,000 a month in January 2027. Shareholders would cover 7.5% of the contributions for one segment and 17.5% for the other.

The advocate put the fund at $8.4 million a year, on top of the roughly $1.74 million Goat Lake now collects. That would raise what Goat Lake charges Alaska Power Company by more than 500%. The advocate asked regulators to cut about $46 million in income taxes and contingency amounts, and to have Goat Lake state the rate increase publicly before any approval.

Goat Lake is contesting the shareholders' part. It told regulators Monday that their 2027 share, $1,045,081, is more than the company's 2025 net income of $636,819. It said it doesn't believe that share "is financially sustainable for the company on an ongoing basis."

The company has appealed the May order to Superior Court, arguing in part that ratepayers alone should carry the fund. Judge Adolf V. Zeman put the order on hold July 10 but left the fund proposal in place, according to commission filings.

A Haines Borough report gives a different estimate. In the Assembly's Oct. 27 packet, borough lobbyist Reid Harris attributes to Alaska Power & Telephone a 112.6% rise in total residential rates, collecting more than $150 million from fewer than 3,500 residents. That figure isn't in the commission filings.

The commission says it will invite public comment once Goat Lake's answers satisfy it. Any charge would still need a separate filing before it could reach bills.