AEL&P PRESS RELEASE

December 17, 2018

Dry weather will temporarily increase AEL&P customer bills.

The energy we sell to interruptible customers like Greens Creek and Princess Cruise Lines discounts the amount the rest of us pay. When there is no surplus energy to sell, we lose the discount and pay the full amount.

For the average residential customer, we anticipate the increase to be about $13.62 per month starting with January bills. However, compared to last winter, the average bill will increase about $5.57 per month due to the rate decrease that went into effect in August of 2018.

A little more about how dry weather impacts our rates:

Our primary power sources are hydroelectric, and therefore, the water levels at the various reservoirs that supply our turbines determine how much energy we have available. Because precipitation varies from year to year, a number of years ago we entered into agreements with Greens Creek, Princess Cruise Lines and customers with multiple heating systems to have them purchase electricity when surplus water is available. We refer to these customers as interruptible because we can disconnect them when water levels are low.

The money that interruptible customers pay for surplus energy is used to offset the cost of electricity for non-interruptible (firm) customers. Over the last five years, that revenue has reduced the amount that the average residential customer pays each month by $29.50.

The abnormally dry summer and fall weather that we just enjoyed resulted in low reservoir levels. Since we do not currently have surplus water available, we disconnected our interruptible customers to preserve renewable energy for our firm customers. This means that firm customers are paying the full amount of hydroelectric generation costs until the reservoirs return to normal levels.

Customers will see this increase reflected on your bill under the “Cost of Power Adjustment” line item starting with bills issued in January - this is the same place a credit has been shown for sales to interruptible customers. We anticipate the lack of surplus energy will affect customer bills from January through June 2019.

This is the first time that interruptible customers have been fully interrupted in five years.

AEL&P understands the impact that higher rates can have on customers. For help on how to lower usage and reduce winter bills, customers can call AEL&P at 780.2222.

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