{"id":20268,"date":"2018-06-11T17:05:00","date_gmt":"2018-06-12T00:05:00","guid":{"rendered":"http:\/\/spijue.wpengine.com\/news\/juneaus-utility-bills-could-be-lowered-due-to-federal-tax-act\/"},"modified":"2018-06-11T17:05:00","modified_gmt":"2018-06-12T00:05:00","slug":"juneaus-utility-bills-could-be-lowered-due-to-federal-tax-act","status":"publish","type":"post","link":"https:\/\/www.juneauempire.com\/news\/juneaus-utility-bills-could-be-lowered-due-to-federal-tax-act\/","title":{"rendered":"Juneau\u2019s utility bills could be lowered, due to federal Tax Act"},"content":{"rendered":"

Utility<\/span> rates<\/span> may<\/span> be<\/span> lowering<\/span> for<\/span> Alaska<\/span> Electric<\/span> Lights<\/span> &<\/span> Power<\/span> Company<\/span> customers<\/span> due<\/span> to<\/span> a<\/span> new<\/span> federal<\/span> tax<\/span> law.<\/span><\/span><\/p>\n

The<\/span> Regulatory<\/span> Commission<\/span> of<\/span> Alaska<\/span> on<\/span> June<\/span><\/span><\/span> 5<\/span><\/span><\/span> announced<\/span><\/span><\/span><\/a> that<\/span> it<\/span> will<\/span> be<\/span> holding<\/span> a<\/span> hearing<\/span> with<\/span> AEL&P<\/span> to<\/span> discuss<\/span> savings<\/span> it<\/span> received<\/span> with<\/span> the<\/span> Tax<\/span><\/span><\/span> Cuts<\/span><\/span><\/span> and<\/span><\/span><\/span> Jobs<\/span><\/span><\/span> Act<\/span><\/span><\/span> of<\/span><\/span><\/span> 2017<\/span><\/span><\/span><\/a>, which was passed into law Dec. 22, 2017.<\/p>\n

The<\/span> Tax<\/span> Act<\/span> includes<\/span> provisions<\/span> lowering<\/span> the<\/span> effective<\/span> federal<\/span> corporate<\/span> income<\/span> tax<\/span> rate<\/span> from<\/span> a<\/span> maximum<\/span> of<\/span> 35<\/span> percent<\/span> to<\/span> a<\/span> flat<\/span> rate<\/span> of<\/span> 21<\/span> percent.<\/span> According<\/span> to<\/span> the<\/span> RCA,<\/span> AEL&P’s<\/span> current<\/span> rates<\/span> were<\/span> established<\/span> based<\/span> upon<\/span> a<\/span> $45<\/span> million<\/span> annual<\/span> revenue<\/span> requirement. Annual revenue is the amount a regulated utility needs to earn in order to provide adequate service to its customers.<\/span><\/span><\/p>\n

<\/span>With<\/span> the<\/span> Tax<\/span> Act,<\/span> AEL&P<\/span> is<\/span> projected<\/span> to<\/span> have<\/span> tax<\/span> revenue<\/span> savings<\/span> of<\/span> $3.9<\/span> million<\/span> for<\/span> this<\/span> year, according to the RCA. <\/span>Those<\/span> savings, RCA commissioners Stephen McAlpine, Paul F. Lisankie, Robert M. Pickett, Anthony Scott and Janis W. Wilson said, should be reflected in customers rates.<\/span> <\/span><\/p>\n

“The<\/span> RCA<\/span> wants<\/span> to<\/span> make<\/span> sure<\/span> those<\/span> (tax<\/span> revenue)<\/span> savings<\/span> are<\/span> going<\/span> to<\/span> the<\/span> customers<\/span> and<\/span> so<\/span> do we,”<\/span> said <\/span>AEL&P Director of Energy Services Alec <\/span>Mesdag<\/span> in a phone interview with the Empire Monday.<\/span><\/span><\/p>\n

Because<\/span> of<\/span> this,<\/span> the<\/span> RCA<\/span> has<\/span> scheduled<\/span> a<\/span> hearing<\/span> with<\/span> AEL&P<\/span> to<\/span> discuss<\/span> how<\/span> its<\/span> potential<\/span> tax<\/span> revenue<\/span> savings<\/span> can<\/span> then<\/span> trickle<\/span> down<\/span> to<\/span> savings<\/span> for<\/span> customers.<\/span> The<\/span> hearing<\/span> is scheduled<\/span> for 11<\/span><\/span> a.m.<\/span><\/span> June<\/span><\/span> 19<\/span><\/span> at<\/span><\/span> City<\/span><\/span> and<\/span><\/span> Borough<\/span><\/span> of<\/span><\/span> Juneau<\/span><\/span> Assembly<\/span><\/span> Chambers. It’s open to the public, and public testimony will be taken.<\/span><\/span><\/span><\/p>\n

The<\/span> potential<\/span> amount<\/span> of<\/span> tax<\/span> revenue<\/span> savings,<\/span><\/span> Mesdag<\/span> said,<\/span> may<\/span> not<\/span> end<\/span> up<\/span> being<\/span> that<\/span> high.<\/span> In<\/span> a<\/span> phone<\/span> interview<\/span> with<\/span> the<\/span> Empire,<\/span> Mesdag<\/span><\/span> said<\/span> the<\/span> $3.9<\/span> million<\/span> in<\/span> tax<\/span> revenue<\/span> savings<\/span> for<\/span> AEL&P<\/span> was<\/span> taken<\/span> from<\/span> the<\/span> first<\/span> quarter<\/span> of<\/span> the<\/span> year<\/span> at<\/span> <\/span>$1.3<\/span> million.<\/span> Because<\/span> that<\/span> was<\/span> for<\/span> four<\/span> months,<\/span> that<\/span> number<\/span> was<\/span> <\/span>multiplied<\/span> by<\/span> three as<\/span> an<\/span> estimate<\/span> for<\/span> the<\/span> entire<\/span> year<\/span> of<\/span> tax<\/span> revenue<\/span> savings<\/span><\/span>.<\/span> Since<\/span> that<\/span> is<\/span> an<\/span> estimated<\/span> number<\/span> associated<\/span> with<\/span> higher<\/span> rates<\/span> during<\/span> the<\/span> winter<\/span> season,<\/span> Mesdag<\/span> said,<\/span> it<\/span> is<\/span> not<\/span> a clear<\/span> projection<\/span> for<\/span> the<\/span> entire<\/span> year.<\/span> Mesdag<\/span> said<\/span> winter<\/span> rates<\/span> are<\/span> approximately<\/span> 20<\/span> percent<\/span> more<\/span> than<\/span> summer<\/span> rates<\/span> which<\/span> run<\/span> June-October.<\/span><\/p>\n

“The<\/span> timing<\/span> of<\/span> the<\/span> revenues<\/span> were<\/span> front-loaded<\/span> on<\/span> tax<\/span> savings,”<\/span> Mesdag<\/span> said.<\/span><\/p>\n

Still,<\/span> with<\/span> the<\/span> potentially<\/span> higher<\/span> tax<\/span> savings<\/span><\/span> for<\/span> AEL&P<\/span> due<\/span> to<\/span> the<\/span> Tax A<\/span>ct,<\/span> it<\/span> is<\/span> possible<\/span><\/span> customers<\/span><\/span><\/span> could<\/span> see<\/span> savings.<\/span> Mesdag<\/span> said<\/span> AEL&P<\/span> cannot<\/span><\/span> do<\/span> anything<\/span> to<\/span> adjust<\/span> rates<\/span> without<\/span> the<\/span> RCA<\/span> approval.<\/span> If<\/span> there<\/span> ends<\/span> up<\/span> being<\/span> increased<\/span> tax<\/span> savings<\/span> for<\/span> AEL&P,<\/span> Mesdag<\/span> said<\/span> customers<\/span> could<\/span> see<\/span> it<\/span> incorporated<\/span> into<\/span> rates.<\/span><\/p>\n

“We<\/span> still<\/span> need<\/span> to<\/span> identify<\/span> how<\/span> that<\/span> money<\/span> can<\/span> be<\/span> moved<\/span> back<\/span> to<\/span> customers,” Mesdag said. “Somehow<\/span><\/span> that<\/span> will<\/span> be<\/span> reflected<\/span> through<\/span> bills.<\/span> It<\/span> is<\/span> a<\/span> matter<\/span> of<\/span> figuring<\/span> that<\/span> out<\/span> and<\/span> coming<\/span> to<\/span> some<\/span> sort<\/span> of<\/span> understanding.”<\/span><\/p>\n

The<\/span> RCA<\/span> is<\/span> required<\/span> to<\/span> make<\/span> a<\/span> final<\/span> decision<\/span> regarding<\/span> the<\/span> investigation<\/span> no<\/span> later<\/span> than<\/span> 365<\/span> days<\/span> after<\/span> the<\/span> initial<\/span> order<\/span> was<\/span> issued.<\/span> The<\/span> RCA<\/span> will<\/span> issue<\/span> the<\/span> final<\/span> order<\/span> in<\/span> this<\/span> proceeding<\/span> no<\/span> later<\/span> than<\/span> Wednesday,<\/span> June<\/span> 5,<\/span> 2019.<\/span><\/p>\n

Public<\/span> comment<\/span> will<\/span> also<\/span> be<\/span> taken<\/span> during<\/span> the<\/span> June<\/span> 19<\/span> hearing.<\/span><\/p>\n

The<\/span> Regulatory<\/span> Commission<\/span> of<\/span> Alaska<\/span> regulates<\/span> public<\/span> utilities<\/span> by<\/span> certifying<\/span> qualified<\/span> providers<\/span> of<\/span> public<\/span> utility<\/span> and<\/span> pipeline<\/span> services<\/span> and<\/span> ensuring<\/span> that<\/span> they<\/span> provide<\/span> safe<\/span> and<\/span> adequate<\/span> services<\/span> and<\/span> facilities<\/span> at<\/span> just<\/span> and<\/span> reasonable<\/span> rates,<\/span> terms,<\/span> and<\/span> conditions.<\/span><\/p>\n

Sale<\/span><\/span> of<\/span> Avista<\/span> to<\/span> <\/span>Hydro<\/span><\/span> One<\/span><\/span> will<\/span><\/span> ‘<\/span><\/span>not<\/span><\/span><\/span> impact<\/span><\/span><\/span> the<\/span><\/span><\/span> existing<\/span><\/span><\/span> Snettisham<\/span><\/span><\/span> Option<\/span><\/span><\/span> Agreement’<\/span><\/span><\/span><\/span><\/p>\n

The<\/span> sale<\/span> of<\/span> Avista<\/span> Corp.<\/span> (parent<\/span> company <\/span>AEL&P) to<\/span> Canadian-owned<\/span> Hydro<\/span> One<\/span> Limited<\/span> will<\/span> not<\/span> impact<\/span> the<\/span> existing<\/span> Snettisham<\/span> Option<\/span> Agreement, according to Mesdag. <\/span>However,<\/span> the<\/span> option<\/span> agreement<\/span> could<\/span> change<\/span> if<\/span> the<\/span> RCA<\/span> approves<\/span> a<\/span> transfer<\/span> of<\/span> controlling<\/span> interest.<\/span><\/p>\n

In<\/span> an<\/span> email<\/span> from<\/span> Mesdag<\/span> to<\/span> the<\/span> Empire,<\/span> he<\/span> explained<\/span> in<\/span> the<\/span> RCA’s June 5 <\/span>approval<\/span> of<\/span> Avista<\/span> to<\/span> Hydro<\/span> <\/a>One<\/a> and h<\/span>ow<\/span> it<\/span> would<\/span> impact<\/span> the<\/span> Snettisham<\/span> Hydroelectric<\/span> Project.<\/span> Snettisham<\/span> is<\/span> owned<\/span> by<\/span> Alaska<\/span> Industrial<\/span> Development<\/span> and<\/span> Export<\/span> Authority<\/span> (AIDEA)<\/span> but<\/span> is<\/span> managed<\/span> by<\/span> AEL&P’s<\/span> sister<\/span> company<\/span> Snettisham<\/span> Electric<\/span> Company.<\/span> The<\/span> Snettisham<\/span> Option<\/span> Agreement<\/span> granted<\/span> SEC<\/span> to<\/span> purchase<\/span> the<\/span> project<\/span> anytime<\/span> after<\/span> Aug.<\/span> 18,<\/span> 2003<\/span> but<\/span> has<\/span> chosen<\/span> not<\/span> to<\/span> do<\/span> so.<\/span><\/p>\n

Mesdag<\/span> explained<\/span> in<\/span> the<\/span> negotiated<\/span> agreement<\/span> among<\/span> Avista,<\/span> Hydro<\/span> One,<\/span> and<\/span> the<\/span> City<\/span> and<\/span> Borough<\/span> of<\/span> Juneau<\/span> a<\/span> change<\/span> in<\/span> the<\/span> controlling<\/span> interest<\/span> of<\/span> Snettisham<\/span> could<\/span> happen,<\/span> but<\/span> there<\/span> would<\/span> have<\/span> to<\/span> first<\/span> be<\/span> an<\/span> approval<\/span> of<\/span> an<\/span> application<\/span> by<\/span> the<\/span> RCA.<\/span> If<\/span> there<\/span> was<\/span> an<\/span> effort<\/span> to<\/span> exercise<\/span> the<\/span> purchase<\/span> option,<\/span> it<\/span> could<\/span> not<\/span> take<\/span> place<\/span> without<\/span> RCA<\/span> approval<\/span> of<\/span> a<\/span> Transfer<\/span> of<\/span> Controlling<\/span> Interest.<\/span> Finally,<\/span> a<\/span> direct<\/span> notice<\/span> must<\/span> be<\/span> provided<\/span> to<\/span> the<\/span> CBJ<\/span> if<\/span> SEC<\/span> were<\/span> to<\/span> file<\/span> for<\/span> a<\/span> transfer<\/span> of<\/span> controlling<\/span> interest<\/span> application.<\/span><\/p>\n

\n

• Contact reporter Gregory Philson at gphilson@juneauempire.com or call at 523-2265. Follow him on Twitter at @GTPhilson.<\/b><\/p>\n

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Utility rates may be lowering for Alaska Electric Lights & Power Company customers due to a new federal tax law. The Regulatory Commission of Alaska on June 5 announced that it will be holding a hearing with AEL&P to discuss savings it received with the Tax Cuts and Jobs Act of 2017, which was passed […]<\/p>\n","protected":false},"author":431,"featured_media":20269,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_stopmodifiedupdate":false,"_modified_date":"","wds_primary_category":4,"footnotes":""},"categories":[4],"tags":[75],"yst_prominent_words":[],"class_list":["post-20268","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-local-news"],"_links":{"self":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/20268","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/users\/431"}],"replies":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/comments?post=20268"}],"version-history":[{"count":0,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/20268\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media\/20269"}],"wp:attachment":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media?parent=20268"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/categories?post=20268"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/tags?post=20268"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/yst_prominent_words?post=20268"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}