Skip to main Content

The case for consolidating Chugach Electric and Municipal Light & Power

  • Author: Lee Thibert, Bettina Chastain
    | Opinion
  • Updated: 5 days ago
  • Published 5 days ago

The discussion about consolidating Chugach Electric and Municipal Light & Power began more than 30 years ago as a way to be more efficient and save ratepayers money. Currently we have three utilities serving residents of the Municipality of Anchorage. Matanuska Electric Association serves the Chugiak/Peters Creek/Eagle River area, while Chugach and ML&P cover the rest of Anchorage. We have long known we don't need two utilities serving the Anchorage Bowl, and we finally have the chance to do something about it. The system would be much more efficient and cost-effective by combining Chugach and ML&P.

As a member-owned, not-for-profit cooperative, Chugach Electric is focused on serving our more than 68,000 members with reliable, safe, affordable electricity. Headquartered in Anchorage, we have been providing electric service to Alaskans for 70 years. Our territory extends from Anchorage (excluding downtown and Midtown areas) to the northern Kenai Peninsula, and from Whittier on Prince William Sound to Tyonek on the west side of Cook Inlet. We are guided by the seven cooperative principles: voluntary and open membership; democratic member control; members' economic participation; autonomy and independence; education, training and information; cooperation among cooperatives; and concern for the community.

Whether you run a business or manage the family checkbook, you know duplication costs money. Chugach and ML&P both provide the same type of service to Anchorage residents: generation, transmission and distribution of electric power. Consolidation and elimination of duplication, while taking advantage of economies of scale, means potential savings of hundreds of millions of dollars can be realized over several decades. As a member-owned cooperative, Chugach gives savings back to ratepayers in the form of lower, long-term electric rates. Additionally, Chugach doesn't keep its margins — or profits — as an investor-owned utility would; we give them back to our members in the form of capital credits. If the acquisition is approved, ML&P customers will become Chugach members who will receive these benefits.

The latest round of consolidation discussion started in April 2017 when business owners in ML&P service territory saw large rate increases due to the building of Plant 2A. Several business leaders got together as a working group with the Anchorage Economic Development Corp. to discuss ways to save money on electric rates. In a letter to the municipality, Chugach and ML&P, the business leaders encouraged Chugach and ML&P to do everything possible to complete and improve upon the work the two utilities are already engaged in — partners in the Beluga River gas field, co-owners of the Southcentral Power Project, power pooling — and take substantive steps to explore merger opportunities.

Following that effort, the Anchorage Assembly in June 2017 unanimously passed a resolution asking the two utilities to move forward on discussions similar to what the AEDC requested. Chugach then began putting together an offer to purchase ML&P. Around the same time, the Municipality of Anchorage had an independent valuation of ML&P done by Goldman Sachs, which valued the utility at between $700 million and $1 billion. Additionally, five other companies submitted offers or letters of interest to the MOA and, after an analysis of all offers, Chugach's proposal was chosen as the best deal for Anchorage because of the price, the commitment to not lay off employees at either utility, and because Chugach is the only buyer that solves the costly duplication problem. With any other buyer the Anchorage Bowl would still have two utilities, and you wouldn't realize the savings that comes from eliminating duplication.

The Chugach Board of Directors supports moving forward on the consolidation, recognizing the opportunity to save upward of hundreds of millions of dollars in long-term electric rates for current and future members, along with the realization that new business opportunities should not result in the layoff of employees. Employees of both utilities are protected in the consolidation with right-sizing of the consolidated Chugach occurring through attrition. If voters say yes to Proposition 10, there will be more public process as the definitive sales agreement goes before the Chugach Board of Directors, the Anchorage Assembly, and the Regulatory Commission of Alaska. We look forward to that continued public engagement.

We don't often get the opportunity to make decisions that will benefit generations of Alaskans. Thirty years is a long time to debate and discuss an idea. Interest rates are low, the state's fiscal situation remains a question, and it's time to take this step to stabilize the future of electric rates for all of Anchorage. Let's strengthen Anchorage's economy, from Girdwood to Eklutna, by voting yes on Proposition 10.

Lee Thibert is Chugach Electric CEO and Bettina Chastain is chair of the Chugach Electric Board of Directors. 

The views expressed here are the writer's and are not necessarily endorsed by the Anchorage Daily News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at) Send submissions shorter than 200 words to or click here to submit via any web browser.

Local news matters.

Support independent, local journalism in Alaska.