Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

AP&T rate payers could save money pending state commission decision

 

August 2, 2018



Haines residents may see a drop in electrical rates and/or a rebate if a recommendation from the state attorney general’s office is adopted.

The Regulatory Commission of Alaska held a hearing with Alaska Power & Telephone company in Juneau in June to evaluate whether lower rates are warranted based on benefits they received from corporate tax cuts this year.

The Regulatory Commission of Alaska regulates public utilities, which includes setting utility rates. In response to the 2017 federal tax plan, which slashed the corporate income tax, the Regulatory Affairs & Public Advocacy (RAPA) Section of the Attorney General’s Office filed a petition for the RCA to investigate the impacts of the tax cut and see whether consumers could see the benefits of tax savings.

The RCA opened investigations into all 25 privately or investor-owned public utilities to see whether their new tax savings should cause a rate decrease.

AEL&P in Juneau has already reached an agreement with RAPA to lower its rates by 6.73 percent in August. The federal income tax on Alaska Power & Telephone will drop from 34 percent to 21 percent this year.

The Alaska Power Company, AP&T’s parent company, “was unable to estimate the 2017 Tax Act impacts on its annual revenue requirement,” and asked for a reconsideration and request for stay in response to an RAPA letter order in May to start an investigation. “Since the Commission’s process is fundamentally flawed, it should be reconsidered,” APC’s request said.

In the hearing in Juneau last month with AP&T, RCA asked AP&T “to show why a portion of its revenue in an amount equal to the impact on APC of the 2017 Tax Act should not be declared interim and refundable,” the scheduling letter said.

RAPA said that APC should have an interim rate decrease.

APC said that their company is small, has a long history of work in Alaska, and asked that the commission take their rate request into the context of the rest of the company.

Both APC and the RCA presented calculations of estimated tax savings. APC, in a “50,000-foot overview,” calculated that in keeping their current rates, they would only make about $8,500 more than regulations allow in returns on utility rates (the limit is $2,539,602). The RCA said that the tax decrease would mean AP&T would see about $553,000 in returns on ratepayers.

The commission has issued no order since the hearing.

John M. Ptacin, Chief Assistant Attorney General, said that the hearing was a step in the right direction towards figuring out the impact of the tax cuts. “I imagine the commission will issue an order in response.”

The Haines Borough could file a request for intervention on the case, which would give the borough party rights at an administrative hearing. Margaret Friedenauer, the executive director of the Haines Economic Development Corporation, said at the July 13 HEDC meeting that she has done research on the issue on behalf of the borough. Debra Schnabel said that the borough hasn’t made a decision to file an intervention or not. “We are dependent on information from the AG’s office. We haven’t done anything yet, but we do have our attorney standing by.”

 
 

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