Anchorage voters will have a say in April on the city's efforts to sell Municipal Light & Power, the city-owned power company, the Anchorage Assembly decided in a long meeting Tuesday night.
Mayor Ethan Berkowitz announced the proposal to sell ML&P, which serves downtown, Midtown and parts of East Anchorage, last month to Chugach Electric, a member-owned cooperative that covers much of the rest of the Anchorage Bowl.
Chugach Electric offered to buy the utility for an estimated $1 billion. Berkowitz and utility executives say that rates and taxes would not increase as a result of the deal, nor would employees be laid off.
Now voters will have to decide whether the city can move forward with negotiations.
Separately Tuesday night, the Assembly scrapped a proposed ballot initiative for an alcohol tax. The tax, introduced by Assemblyman Dick Traini last fall, drew strong opposition from the local liquor industry.
Several dozen people wore red shirts to the Assembly meeting to show opposition, with some shirts reading, "No New Taxes!" Industry representatives said the tax unfairly burdened retailers for complex social problems associated with alcohol, as well as posing a hardship for businesses and responsible customers.
"It's not the answer," said Mike McVittie, a consultant for Anchorage Wine House.
Traini said the tax could provide revenue for drug and alcohol treatment programs and public safety problems tied to alcohol abuse.
A step forward for ML&P deal
The Berkowitz administration announced the Municipal Light & Power deal — a major undertaking with significant consequences for the city — just last month. Several people told the Assembly on Tuesday night they were worried the deal was being rushed through with limited transparency on financial details.
"I have to ask, what's the hurry?" asked Keith Silver, a South Anchorage resident.
Assembly members said their vote Tuesday, and the ballot proposition, are only the next in a series of steps to a sale.
"Our vote today just starts things," said Assemblyman John Weddleton of South Anchorage. "We'll be poking holes in this thing for the next two and a half months."
The April ballot proposition would authorize — but not require — a sale, officials said. If voters approve, the city and Chugach Electric would have to work out a sales document, which would then go back to the Assembly for approval. That document would then be sent to the Regulatory Commission of Alaska.
If everything happens as planned, the sale could go through in early 2019, officials say.
Chugach Electric officials say the deal would save hundreds of millions of dollars over a number of years and eventually lead to lower rates. But if Chugach Electric can't prove that it can do what it says it can, Weddleton said, the Assembly can turn down the deal.
So far, other potential buyers for Municipal Light & Power have not been identified, with officials citing non-disclosure agreements. But Berkowitz said his administration hoped to make more information available soon. He added that the public can already obtain information on the financial condition of Municipal Light & Power and Chugach Electric.
Assemblywoman Amy Demboski said that based on all the information she had, the Chugach Electric offer was a good deal. She called it a "reasonable option" to put before voters.
The Anchorage election starts March 13, when elections officials will mail out ballots to registered voters. The last day to vote is April 3.
Talk of a merger or sale of the 85-year-old utility has been discussed for decades. Last year, amid rising concern from business owners about high utility rates, the Anchorage Economic Development Corp. created a utilities working group that concluded that having two electric utilities was inefficient for a city of Anchorage's size.
Alcohol tax fails again to reach ballot
Traini, a veteran assemblyman who does not drink alcohol, has tried three times to pass an alcohol tax. His first attempt came in 1994, and he tried again in 2015, with similar results.
This time around, the alcohol industry launched an advertising campaign on Traini's proposal even before the Assembly had voted on whether to send it to the ballot.
Dale Fox, the former executive director of the Alaska Cabaret, Hotel, Restaurant and Retailers Association, declined to say how much his organization had spent on advertising. But he said it would cost a lot of money to fight a ballot proposition that his members see as unfairly punitive.
Fox said his organization has some ideas to achieve the same goals that Traini wants. He said he hoped for a sit-down with elected officials to talk through options on how the alcohol industry can help.