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RCA issues ruling on ML&P rate case, sets permanent rate and finds construction of Plant 2A to be prudent

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For Immediate Release - April 2, 2018

RCA issues ruling on ML&P rate case, sets permanent rate

-Commission finds construction of Plant 2A to be prudent-

ANCHORAGE—The Regulatory Commission of Alaska (RCA) recently approved Municipal Light & Power’s 2015 test year rate case and set the permanent rate increase of 37.32 percent for the Energy Charge (cost per kWh used). The permanent rate replaces the interim and refundable rate increase of 37.3 percent, which the RCA ordered in February 2017.

ML&P filed the request for a permanent rate increase in December 2016 to pay for the utility’s investment in Plant 2A, which replaced aging equipment, including four units that exceeded their 35-year design lives.

Even with the permanent increase to the Energy Charge, the overall monthly bill for the average ML&P customer is still the lowest in the Railbelt due to the efficiencies achieved by Plant 2A and the significant decrease in the Cost of Power Adjustment. “The investment in reliable and highly efficient generation at Plant 2A is benefitting customers as expected,” said ML&P General Manager Mark Johnston. “The plant is the most efficient in Alaska and is the reason for the steady decrease in residential and commercial customer bills over the last year.” 

In the order, the RCA also found the decision to build Plant 2A to be justified. “We are encouraged that the Commission came to the same conclusion as our generation studies—that the decision to build Plant 2A was prudent,” continued Johnston. “Investment in new, more efficient technology was needed to maintain reliability for our customers.”

Starting in 2002, ML&P conducted multiple generation studies, which found the age of ML&P generating units posed a risk to reliability. Plant 2A began commercial operation in December 2016. That same month ML&P retired Units 1, 2, 5 and 6, which were beyond their 35-year design lives.

The replacement of aging generation with newer, cleaner technology is also better for the environment. Since Plant 2A began operation, ML&P carbon monoxide emission has been reduced by 179 tons or 65 percent and nitrogen oxide emission by 759 tons or 74 percent. “The reduction in NOx emission achieved by Plant 2A is like taking 151,000 cars off the road each year,” said Johnston.

 

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MEDIA CONTACT:

Julie Harris, ML&P Public Relations Manager, (907) 263-5423 (desk), (907) 717-8681 (cell)



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