Anchorage Daily News

Starting Sept. 1, the Chugach Electric Association will begin charging a fee to Southcentral Alaska customers who use a credit or debit card to pay their bills.

The Anchorage-based utility said it will cost $3.50 per transaction to use a card to pay for a bill on the company's Web site or by phone.

Chugach will not receive any income from the fee. Instead, the fee will be collected by BillMatrix, the company that processes credit-card transactions for Chugach, said Patti Bogan, the electric utility's spokeswoman.

Customers can still "auto pay" their bills -- free of charge -- by signing up to have their bills deducted from their checking accounts, she said.

The Chugach board voted to approve the new credit-card transaction fee in February, after a member survey showed that 57 percent believed that only customers who use credit cards should pay for the convenience rather than all ratepayers, Bogan said.

About one-third of Chugach ratepayers -- 25,000 accounts -- use credit cards to pay their bills, but the expense of the credit-card transactions is borne by all customers, according to the company.

Bogan said the fee was prompted by the rising cost of processing credit-card transactions. Chugach pays more than $800,000 per year to process credit-card payments, according to a letter sent by Chugach to its members on Monday.

The overall cost of processing these credit-card transactions is a small fraction of Chugach's overall expenses, which were about $256 million in 2007, according to Bogan.

Despite the new fee, most Chugach ratepayers are going to see lower bills, she said.

That's because Chugach recently lowered its electric rates for residential customers.

Starting this month, the energy charge for Chugach residential customers decreased from roughly 9.3 cents per kilowatt-hour to 6.8 cents per kilowatt hour. The June bill for a typical customer using 700 kilowatt-hours of electricity decreased from $97.26 to $94.39, according to the company.

The lower rate results from a recently settled rate case. In the case, Chugach argued to state regulators that its retail customers paid more than their fair share of the expenses in running the utility.

The utility's wholesale customers -- power companies in Mat-Su, Kenai Peninsula and Fairbanks -- will pay a higher rate, Bogan said.

Find Elizabeth Bluemink online at adn.com/contact/ebluemink or call 257-4317.

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