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RCA tariff questions
Chugach Electric, REAP, both requesting review of recent RCA tariff order
Alan Bailey for Petroleum News
Chugach Electric Association and Renewable Energy Alaska Project have both submitted filings with the Regulatory Commission of Alaska requesting reconsideration of some aspects of a recent commission order setting requirements for a new Chugach Electric tariff.
As previously reported by Petroleum News, in July of last year Chugach Electric filed with RCA a proposed new tariff that would have resulted in a 5.9% rate rise for its customers. In response the commission opened two dockets, which were subsequently combined, to investigate the tariff situation. And on Sept. 25 of this year the commission issued an order, closing the dockets and spelling out the conditions that Chugach Electric must meet when issuing a new tariff. The order required Chugach Electric to file a new tariff by Nov. 14.
Fees for using ML&P's sector of the grid? On Oct. 10 Chugach Electric filed a petition requesting reconsideration of two components of the RCA order. In particular, the utility is asking the commission to review its mandate that Chugach Electric must not charge other utilities for their use of the components of Chugach Electric's transmission infrastructure that the utility acquired as a consequence of its purchase of Municipal Light & Power in 2020 -- ML&P had not charged other utilities for their use of ML&P's sector of the transmission grid.
Chugach Electric commented that its transmission system components work together as a single integrated network, with all of the utility's customers, including transmission customers, benefiting from the availability of the integrated system.
"It is entirely appropriate that the transmission customers share in the cost of the integrated system these customers have used since before the (ML&P acquisition) transaction," Chugach Electric wrote. Moreover, the RCA order gives transmission customers 100% of the benefits of the ML&P acquisition while not requiring them to pay any of the associated costs, the utility wrote.
In addition, the RCA order lacks any discussion or analysis of how disallowing the recovery of the operating costs of the previously ML&P assets is consistent with the longstanding practice of using postage stamp rates in the Railbelt electrical system, Chugach Electric argued. A postage stamp rate involves the charging of an identical rate for a service, regardless of a customer's location.
Chugach Electric also questioned the use in the order of the term "backbone transmission system" in reference to the components of the system that carry power along the Railbelt, as distinct from radial transmission lines to remotely located power generation facilities such as the Cooper Lake power station. Especially given that there is no definition in regulations for this terminology, its use could lead to unnecessary confusion and litigation, Chugach Electric argued.
REAP wants to address gas supply crisis REAP has a mission of promoting the maximum use of renewable energy sources in power generation in the Railbelt and sees this as a means of addressing the increasing price of natural gas and pending gas shortages in Southcentral Alaska -- natural gas is the dominant fuel used for power generation in Southcentral. The organization had participated in the Chugach Electric dockets and, in its filing, complained that the commission, in its order, had made numerous errors and omissions. In particular the commission had ignored the looming Cook Inlet gas supply crisis and the commission's statutory duty to promote conservation, REAP argued.
REAP particularly cited Alaska statute 42.05.141(c) which states "In the establishment of electric service rates under this chapter the commission shall promote the conservation of resources used in the generation of electric energy." REAP commented that rather than simply arguing that the commission should "consider conservation and cost causation," as stated in the commission's order, the commission is required under law to promote conservation.
Ignoring statute 42.05.141(c) renders the order unlawful, since it in effect declares the statute to be superfluous, REAP claimed.
And, as in the statute, the gas supply crisis was central to REAP's participation in the dockets, REAP commented.
"Yet in summarizing REAP's position, the commission again ignores this critical issue -- there is no mention of the gas shortage at all," REAP wrote.
Other issues raised by REAP REAP also commented that, although the RCA order mentions REAP's suggestions for determining the cost of service and designing the rates, the commission made no response to these suggestions.
REAP also questioned a lack of explanation for why the commission had mandated no change in the manner in which peak industrial electricity demand is factored into electricity pricing, or for why the commission had approved a requested change to the method used to recover the cost of Chugach Electric's long-term interest expenses.
Citing several other alleged deficiencies in the RCA order, REAP urged "the commission to reconsider the final order ... and issue a new decision that comports with applicable law and the public interest."
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