Longtime Kotzebue resident Tom Atkinson takes over AVEC as its costs climb

Tom Atkinson, who has lived most of the past 20 years in Kotzebue, is the new president and CEO of the Alaska Village Electric Cooperative, taking over as the utility says the cost of making power in rural Alaska keeps rising.

"Life in rural Alaska is certainly not getting any easier, nor is providing electricity for it," Atkinson wrote in a message to members posted Oct. 1.

He succeeds Bill Stamm, who wrote in a farewell message in September that he is stepping away after three decades. Stamm came to Alaska 33 years ago and was "unsuccessful in selling my four years of experience as an engineer" to Anchorage consulting firms, he wrote. AVEC hired him for the summer as a "thousand-hour" general laborer. That first summer he worked in Toksook Bay, Tununak, Savoonga, Gambell and Wales, moving fuel tanks and transformers, building living shelters out of connex vans and painting.

AVEC, which Atkinson wrote has been providing power for 55 years, serves more than 31,000 people in 58 communities, from Kivalina to Old Harbor and from Gambell to Minto.

Fuel is more than half of AVEC's cost of making and delivering power, Stamm said in May. For communities that had received fuel this year, the delivered cost was 35% to 40% higher than last year, Stamm wrote in an August column. For most communities, barge-delivered fuel alone costs more than 50 cents per kilowatt-hour of power, he wrote. "For fly-in fuel, the cost per kWh is over $1/kWh, just for fuel."

Running the system costs more too. AVEC's operating cost came to 36 cents per kilowatt-hour in most communities at the end of 2025, and Stamm wrote that the cooperative will need to raise its revenue 10% to keep pace with inflation, commodity, freight and wage costs.

The cooperative ended 2025 with an operating loss. Its board approved a rate increase that took effect March 1, expected to raise revenue 2.75%. "This modest increase will allow AVEC to reduce its operating losses in 2026 and hopefully end with a positive operating margin," Stamm wrote in a March message. The same changes doubled the late payment fee to $10 and let members prepay for power by phone or online. When a prepaid balance hits zero, the power shuts off until more money is added. Monthly billing is still available.

In August, AVEC proposed another increase averaging 4.75%, under which the non-fuel part of Bethel's bills would rise about 30%. The notice cited higher operating costs for materials, labor, transportation and freight, and said the changes are designed to meet revenue requirements, provide a positive operating margin and meet debt covenants with the cooperative's main lender, the National Rural Utilities Cooperative Finance Corporation. The new rates would apply to power used on or after Nov. 1 if the board approves them.

Those rates cover everything but fuel. AVEC calculates fuel charges separately for each community, based on the delivered cost of fuel and the efficiency of its power system.