Regulators approve Chugach fuel charges that shift typical bills by less than $1

The Regulatory Commission of Alaska on Thursday approved Chugach Electric Association's latest quarterly power cost charges, which raise a typical bill in its North district by 73 cents and cut a typical South district bill by 84 cents.

That works out to a typical North bill of $122.76 and a South bill of $139.64, both changes of about 0.6%, according to commission staff, based on a home using 525 kilowatt-hours. Actual bills depend on how much power a household uses.

The charges have been on bills since Oct. 1. State rules let a utility put this kind of filing into effect first and have it reviewed afterward, as long as it doesn't add a new method or cost element.

The main fuel charge went up. Chugach's residential power cost surcharge, the part of the bill that passes fuel and purchased-power costs through to members, rose from 6.505 to 6.885 cents per kilowatt-hour, adding about $2 to the typical bill. Staff pointed to higher projected fuel and purchased power costs, higher balances of costs Chugach hasn't yet collected, and a higher cost for power from the Fire Island wind farm.

Part of the wind increase came from an incorrect number. David Caye, Chugach's regulatory affairs manager, told staff the projected rate of $107.85 per megawatt-hour "is an error" and the actual rate remains $97.

The surcharge rose even though regulators had cut the price of Chugach's Beluga River gas to $7.74 per thousand cubic feet for these projections.

The two districts' bills move in opposite directions because of a separate charge tied to Chugach's purchase of Municipal Light & Power. The commission found that ML&P's former customers, now Chugach's North district, were owed about $136 million in present value for money they had put toward future Beluga River gas. Since January 2021, South members have been paying it through a surcharge and North members have been getting it through a rebate, over a targeted 10 years.

This quarter, the North rebate rose from 2.045 to 2.286 cents per kilowatt-hour, offsetting part of the higher fuel charge there. The South surcharge fell from 1.469 to 0.929 cents, more than offsetting it, according to the approval letter.

Chugach's broader rate case remains open, with a statutory timeline date of Nov. 11. A partial settlement the commission accepted Aug. 4 sets the residential customer charge at $13.75, up from $12.79 but below the $14.50 Chugach had proposed.

In August, Commissioners Steve DeVries and Mark Johnston objected to approving the previous quarter's filing outside that case. The rules require the commission to review these costs in each general rate case, and they wrote that approving the filing while the case is pending "works at cross purposes with this regulatory requirement." The letter approving this quarter's filing carries no such objection.