On first reading: Assembly passes electric rate hike, and winter relief

Electric rates in Sitka likely will be going up this fall — after first going down by two cents.

The Sitka Assembly Tuesday night (3-14-17) passed on first reading a 15-percent increase in electric rates, and a seasonal rate structure intended to make electric bills more affordable in winter.

Downloadable audio.

City Hall says electric rates have to go up again in Sitka to pay debt on the Blue Lake hydro expansion project. It’s a predicament the city didn’t expect to be in when it issued bonds for the project, when diesel fuel was expensive and electric loads were nearing maximum of Sitka’s two existing hydro plants.

But the rate increase doesn’t have to be uniform. At the assembly’s meeting on February 14th, utility director Bryan Bertacchi suggested that the rates could be structured to help out Sitkans strapped by high bills in winter. The assembly liked the idea, and it emerged in a pair of new ordinances — the first increasing rates by 15-percent; the second implementing the seasonal adjustment, which would drop residential rates to $.12 per kilowatt-hour beginning October 1, and then raise them to $.19 in summer, when people generally use much less.

Resident Harriet Beleal didn’t support another rate increase. She urged the assembly to look elsewhere. She said she lived with her daughter and struggled to pay the electric bills.

“You won’t really understand that until you’re my age — 83 years old — and you have to live on a limited income, and the money doesn’t go very far.”

Member Tristan Guevin has advocated for subsidies to assist people in Beleal’s position. He estimated that 20-30 percent of Sitkans would find an additional increase in electric rates to be devastating.

The assembly has set aside over $900,000 next year to provide electric rate subsidies to low-income Sitkans — but hasn’t created a mechanism to distribute the money.

Guevin said he would be reluctant to vote for the increase on second-and-final reading, without some movement toward creating this safety net.

“And I think it’s something as a community, we need to hold each other up and recognize that these are tough times. And those of us who can afford it, to take on that responsibility.”

Member Aaron Bean has suggested allowing the Regulatory Commission of Alaska to audit Sitka’s utility rates — and perhaps regulate them.

“If one person’s here to testify there’s probably 10 behind her, and maybe even more. So I just ask the assembly to consider supporting me in at least asking for that to happen.”

But the support wasn’t there — at least not among the four other members present. Mayor Matt Hunter said that turning over the local utility to the Regulatory Commission would require a vote of the people, and provide no guarantees that rates would be lower.

“The board has approved recent 22-percent hikes in Anchorage; large rate hikes in Juneau — I think the rates would be higher if the board would be running it because we can toe the line right at the 125-percent that we’re required to meet the bond covenant debt service.”

Nevertheless, Hunter was not excited about raising rates. He called it the “worst part” of his responsibility as a public official.

“I’ve heard from many people in the community who are finding it increasingly difficult to live here — of all demographics and ages. And it pains me to hear them say, This next one is the straw that broke the camel’s back. This next one is the one that’s going to push me out of town. There are a lot of fronts that people are feeling the squeeze.”

The assembly voted 4-1, with Bean opposed, to pass both ordinances, but the rate increase — and the seasonal adjustment — won’t be final until passed on second reading.

The assembly last raised electric rates in October of 2016 — by 5-percent. The latest increase should be the last for some time — according to the Electric Department — except for adjustments based on the consumer price index.

Members Bob Potrzuski and Steven Eisenbeisz were absent.