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Why the ML&P sale makes sense

  • Author: Tom McGrath
    | Opinion
  • Updated: February 18
  • Published February 18

Chugach Electric buying ML&P will be on the Anchorage election ballot. This is an issue that has been talked about for decades in Anchorage and one that I am very happy to support for many reasons.

I am a local government watcher. Everyone has hobbies and mine is local government. I have attended community councils since the 1970s and have attended thousands of Anchorage Assembly meetings as well as many work sessions and other Assembly meetings.

An issue that is always present is that there's not enough time for community councils or the Anchorage Assembly to hear or deal with all the issues. Good governance needs to be provided but a factor in Anchorage is that we own ML&P, AWWU, Solid Waste Services (including the Anchorage landfill), the Port of Anchorage, Merrill Field, the Anchorage Community Development Authority, which includes Easy Park (the Parking Garages and parking meters), the museum and the performing arts center, the convention centers and Sullivan Arena, and Anchor Rides (the bus system). Anchorage government has a lot on its plate.

Over and over, issues with one or more parts of government are delayed for lack of time. The Anchorage Assembly meets on every other Tuesday and must complete its business by 11 p.m. unless there is a vote of the body to extend, but then only until midnight. There are special meetings from time to time but this affects not only the Anchorage Assembly but also the administration and the public. Years ago the Anchorage Assembly met until the wee hours of the morning but that caused complaints from the press and citizens who were substantially locked out of the process.

That brings me to the sale of ML&P to Chugach Electric. ML&P has consumed a lot of government time that could have been spent on other issues. We have bought the Beluga Gas Fields, a portion in the 1990s and a portion recently. The first purchase took many meetings before the Anchorage Assembly to convince them that it was a good idea. The second purchase was easier because of the success of the first. Then there was the issue of ML&P, during a previous administration, trying to move its headquarters to the Glenn Square Mall. And finally there was the issue of building the new power plant on the Glenn Highway. This is/was the straw that broke the camel's back and the need to finally divest ourselves of this utility. It is my opinion that we did not need this power plant, but built it because Chugach Electric had built a new plant. A portion of the new plant Chugach built is even owned by ML&P but because they built one, we had to build one. This $300 million-plus plant has caused rates to rise. Also because we are now overextended, the Regulatory Commission of Alaska will not allow ML&P to pay municipal utility service assessment payments, to Anchorage. This puts a burden on Anchorage taxpayers.

The Anchorage Assembly ultimately made the decision to allow the power plant to be built. But did they have the time for due diligence?  When the elected board of Chugach Electric makes a decision they are dealing with just Chugach Electric.  When the Anchorage Assembly makes a decision like this, it is just one of the thousands of things on their plate on a given night. I believe a dedicated board of directors is better able to operate a multibillion-dollar utility than the Anchorage Assembly that actually dedicates very little time to any issue. It comes down to the head of ML&P or the Mayor saying, "Just trust me." Sometimes the Assembly should not show or have that trust but they don't have the time or the tools to do anything else.

The other side of this issue is, we have seven electrical utilities in the railbelt. We have seven utilities serving a small population with all of the overhead required to run those seven businesses. It has long been talked about, to save money, provide efficiencies and to provide better service these seven should be one. I think this step to combine ML&P and Chugach is just the first step in the future of combining the electrical utilities from Homer to Fairbanks. I look forward to that day when a professional Board of Directors overseen by the RCA will make decisions they are qualified to make.

Tom McGrath, retired previous owner of Frigid North Electronics Co., has been involved in local politics for 40 years as an observer and commentator as well as serving on various boards and commissions.

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