Every once in a while we are presented with an opportunity that will move a community forward and provide benefits to everyone who lives there. Consolidating Chugach Electric Association and Municipal Light & Power is one of those opportunities.
Like the electric utilities, Alaska Communications is in the business of serving Alaskans. When we can do it more efficiently and reduce costs, everybody wins. Common sense will tell you that duplication costs money. Having two utilities serving a population the size of the Anchorage Bowl is costly, and it just doesn't make sense. Unlike the telecommunications business in Alaska, the electric utilities don't compete for customers. You get your electric service not by choice, but based on where you live. So consolidating these two utilities won't kill competition, but rather will allow Chugach to provide electric service more efficiently and at a lower cost.
We know that efficiencies bring better rates, and better rates are good for the economy. Electricity is a major cost of business, so anytime we can eliminate duplication and lower costs, there will be a benefit. Chugach has pledged that in the long run, overall rates will be lower with one utility, than if we continue with two. It just makes sense. Additionally, the Chugach/ML&P consolidation makes sense as Chugach surrounds ML&P on three sides. The integration between the two would be virtually seamless, and the money from the sale stays in the local economy. We don't have an outside interest shipping profits to another state. And, as a member-owned cooperative, Chugach returns its margins to members, not shareholders.
Alaska Communications stands for local, reliable, and trustworthy customer service. We believe Chugach Electric does the same. As a community partner, Chugach has been excellent to work with on projects such as undergrounding utility lines. They work with us to do it in the most efficient and cost-effective manner, and we would be pleased to see that cooperative working relationship we have with Chugach extend even further when these utilities consolidate.
Another benefit of utility consolidation is how it can benefit advances in technology. Research and development is expensive. Just as in the telecommunications business, there are advances every day in the electric utility world. Whether it's electric vehicles, expanded use of solar power, or battery storage, it all costs money. Right now both Chugach and ML&P are expending money to advance those technologies, when they could go a lot further by only spending that money once.
It's no secret Alaska's economy is struggling. We continue to have the highest unemployment rate in the country and we are creating fewer new jobs than any other state. Consolidating Chugach and ML&P is something we can do for all of Anchorage, benefiting ratepayers as well as property tax payers. Bottom line is it's more money in the pockets of Anchorage residents.
Leonard Steinberg is senior vice president, legal, government and regulatory affairs at Alaska Communications.
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