My electric bill for November is huge! What’s going on? Why do you charge so much more in the winter when people need more electricity?
 
     
  As strange as it sounds, AEL&P charges more in the winter to keep overall rates lower for everyone. Here’s how it works. We have two rates for electricity: A summer rate, for energy billed from June 1 through October 30; and a higher winter rate, for energy billed from November 1 through May 31. Seasonal rates have been part of AEL&P’s rate structure for over 25 years, and are approved by
the Alaska Regulatory Commission.

We see our peak energy use in the winter, and the higher this peak is, the more AEL&P has to spend (and the more money we have to collect from our customers) for larger transformers, additional generation capacity, etc. A higher rate in the winter sends a price signal for all electric users, particularly those who use a lot, to conserve what they can. The lower we can keep the winter peak through the conservation of electric users, the lower we can ultimately keep our rates.

 
     
  I know the rates go up in November, but this year they went up much more than usual. Why is that?  
     
  The reason the increase was particularly high this fall has to do with the "power cost adjustment" included on each electric bill. Our rates are set to cover our costs, but there are some things that change often, so we include them as a power cost adjustment.

For example, energy that is surplus to the needs of our regular customers can be sold to Princess Cruise Lines or Greens Creek mine. Almost all the revenue from these "surplus sales" is refunded back to our customers in the power cost adjustment. If you look at your bills from the past summer you will see a rebate of more than 5% due to these sales.

The power cost adjustment is also used when we run short of water to generate hydro power and need to supplement that with diesel generation. In this case, the power cost adjustment is charged to our customers for their share of the cost of the diesel fuel we will need this winter to meet our demand.

The November adjustment included a 15% surcharge for the cost of the diesel we will use this winter because our reservoirs are so low. Unfortunately that adjustment from a rebate to a surcharge happened in the same month as we changed from summer to winter rates, causing our customers to see a much larger than normal total increase.

Fortunately this situation is temporary. The power cost adjustment is revised every June and November.

 
     
  The reservoirs are low? How can that be with all the snow and rain we experienced this past year?  
     
  The water level in the reservoirs depends on how much water flows in from rain and snowmelt, and how much water is taken out to generate power.  As you can see from the graph, Juneau’s demand for electric power has recently exceeded our hydro capacity.  We now need more electricity than we can generate with hydro even in a normal water year.  
     
   
     
  Well, if we are running out of water to make our hydroelectric power, why are you selling energy to the Greens Creek mine?  
     
  We reserve our hydro resource for the homes and businesses of Juneau. If we have more hydro than we need in town, we sell it to Greens Creek and rebate most of the revenue from those sales back to our customers. This water would just spill over the dam and be lost if it wasn’t used to generate electricity.

A small amount of power was sold to Greens Creek this June and July as the record snowpack melted and large amounts of water flowed into the reservoirs. In August, when the weather began to dry, we curtailed surplus energy sales to Greens Creek in order to save the hydro energy for our other customers. No energy is being sold to Greens Creek at this time.

 
     
  If we are running out of hydro energy, why don’t you build a new powerplant?  
     
  We are! We began permitting for the next hydro project, the Lake Dorothy Project, in 1996, and began construction in 2006. Lake Dorothy is expected to be on line in late 2009. That will bring us back to a hydro surplus position and remove the need for diesel generation for some time.  
     
  Is there anything I can do to lower my electric bill?  
     
  Conservation always reduces energy use and results in lower bills. Doing things as simple as turning off lights or appliances when not in use helps. Better insulation and weather stripping can reduce heating costs. Replacing incandescent bulbs with compact fluorescent ones can also save energy and lower bills. Using a fuel other than electricity to heat your home will also minimize our diesel generation.  

 

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