The Regulatory Commission of Alaska’s public comment period is open until May 28.
A tower and avalanche diversion wall on the Snettisham transmission line. She called it the “icing on the cake” of recent cost-of-living spikes, including on groceries and gas.
Giguere and her husband have lived in their 1,600-square-foot home on Douglas Island since the 1980s. A few years ago, they made the switch from pricey oil to more affordable hydropower by installing an electric heat pump and radiant heating. Her most expensive electric bill within the past year was a little over $480 for the home’s two units in January. With a 20% increase, a similar month next winter could cost her about $576.
Giguere is retired, and although she and her husband have social security and pensions, she said the price hike could limit their ability to visit family in the Lower 48. Juneau’s sole electric utility last raised rates in 2023 by 6%. That increase was based on costs in 2021. Between then and 2025, prices on many products AEL&P needs to operate have soared.
Alec Mesdag, AEL&P’s CEO, said copper pipe went up nearly 140%, while a single distribution pole and transformer increased 105%, according to company purchases. Mesdag said the rising cost of equipment and capital improvements created an annual $10 million hole. The 5% discrepancy is because a surcharge associated with Hecla Greens Creek Mine that’s been appearing on electric bills will now be accounted for in the base rate instead.
Mesdag said AEL&P used to assume the mine would pay $8.7 million per year for hydropower. In the past, the power company built that assumption into how they determined electric rates for other customers. AEL&P subtracted that assumed revenue from the cost it needed to recover from customers overall, then calculated electric rates for everyone else.
When the mine used more power than AEL&P accounted for, residents would see a small reduction on their electric bill under the “cost of power adjustment” line. When the mine used less power, residents would see a surcharge instead. For years, Mesdag said the mine hasn’t been using as much electricity as AEL&P expected. Mesdag said the mine has both improved its energy efficiency and had more service interruptions.
Sometimes surplus power isn’t available due to drought or construction, and sometimes trees hit the transmission line out to Admiralty Island. Now, AEL&P plans to assume the mine will use less energy, so the surcharge will be moved into the price per kilowatt-hour, or base rate.
“It takes a cost that we’re already paying on our bills, and it moves it into base rates,” Mesdag said. If the commission approves AEL&P’s request, residential base rates would rise by 26.7%. Large commercial customers would see a 23.5% increase and small commercial customers would see a 22.8% increase. Mesdag said that’s because commercial customers are currently bearing a larger proportion of the cost for AEL&P to provide power.
“Based on our cost of service study, it appears that commercial customers — large commercial and small commercial customers — are subsidizing residential customers,” Mesdag said. He said Juneau residents would still pay a lower electric rate than the national average, but he understands it’s a substantial increase. Mesdag said the company is willing to offer guidance to improve home energy efficiency and work with people who fall behind on their payments.
The power company plans to raise rates in two phases. The first rate hike of 12.5% takes effect in June.closes at 5 p.m. on May 28, but the commission will accept comments submitted after that. The rate case is expected to conclude around August 2027.
Alaska Electric Light & Power Alec Mesdag Electric Bills Electric Rate Greens Creek Mine Hydropower Juneau Lynda Giguere Public Comment Rate Hike Regulatory Commission Of Alaska
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