By Melinda Munson
Sept. 14 was the first time many Skagwegians heard about a possible electricity rate hike by the town’s only electric company, Alaska Power and Telephone (AP&T), whose power subsidiary is Alaska Power Company (APC).
Online posts by community members warned that public comment regarding the possible 25% increase was due to the Regulatory Commission of Alaska (RCA) the following day by 5 p.m.
“I heard about it on social media, like a lot of other people,” said Mayor Andrew Cremata.
With a decision expected to take up to 15 months, AP&T asked for an interim rate increase of 15% to take effect after Oct. 1 while they wait for the 25% determination.
Upon request, Jason Custer, vice president of regulatory and government affairs for AP&T, sent The Skagway News an announcement dated Aug. 18, explaining why AP&T applied to the RCA for permission to raise rates.
“Since 2019, inflation has significantly increased the costs of living and doing business in rural Alaska. Just like you, Alaska Power & Telephone has experienced its effects … Despite our employees’ best efforts to manage expenses, the actual cost of operations in 2022 indicates that APC experienced a revenue deficiency of $3,655,594, and must increase its rates to offset this shortfall.”
Custer did not detail if and when this or any other notice was sent to Skagway residents. He did not answer any other questions posed by The Skagway News.
The proposed rate increases were posted to the RCA website Aug. 16. They were also published in the Juneau Empire and the Peninsula Clarion. The Clarion serves Kenai, located nearly 1,000 miles from Skagway. Neither Juneau nor Kenai is serviced by AP&T.
On Sept. 15 an hour before the deadline, residents reported that the RCA website was not responding and were redirected to send emails to the entity.
Public statements can be found by visiting rca.alaska.gov, clicking on documents and searching for TA909-2.
“AP&T’s request for a 25% increase as well as their temporary 15% rate increase is absolutely unacceptable for a privately owned utility company that has a monopoly on the service, is primarily hydro powered in the upper Lynn Canal and has received hundreds of thousands, if not millions of public, federal and state grants to improve their business’ positioning,” wrote Kaitlyn Jared. “…While I understand costs increase, a 5-7% increase in utility rate, but no more than 10% is much more standard.”
“We oppose the suggested rate hike by AP&T,” wrote Jessica Medlin and Michael Yee. “We understand that the costs have gone up, but a 25% increase is not warranted all at once. It is difficult enough to heat our homes with electricity. We recently installed a heat pump to be more environmentally responsible and at the encouragement of AP&T at a significant cost to ourselves – and this rate hike seems abusive. People are already struggling with the high cost of living. A rate hike of this magnitude is not only unwarranted but seems predatory towards communities that have no other option but AP&T.”
Taylor Ashton wrote on behalf of the business she manages.
“I am the general manager of Glacial Coffeehouse here in Skagway and we stay open year-round as a service to the community. We make no profit in the winter and spend the first few months of the summer season shoveling ourselves out of the “red” from winter’s loss. Our building (like all downtown businesses) is in the historic district and requires electric heat to be running in order to keep our buildings open and habitable for the few (and very important) local patrons who fill our quiet winter walls. This increase in electricity would surely impact our decision to stay open year-round as the only operating coffeeshop/cafe serving locals every winter. The use of electricity goes up exponentially in the winters…”
The Skagway Borough Assembly held a special meeting Sept. 14 and went into executive session. The result was to direct borough attorney Robin Brena to file a protest with the RCA.
“The muni should be pursuing this in court to protect the interest of the community,” Cremata said.
Resident Jan Tronrud disagreed.
“What increase would be acceptable?” she asked. “Cost of living? Every year? This is the first hike in nine years. These employees are your friends and neighbors, people that pay the same price for power and groceries that you do. In order to keep the high calibur staff that they have, they have to remain competitive in the wage and benefits market.”