AVEC on schedule for BUC takeover

by Angela Denning-Barnes on October 10, 2013

The electric utility trying to buy out Bethel Utilities Corporation says they are still on schedule for a Spring takeover. Meera Kohler, President of the Alaska Villages Electric Cooperative says the buyout would cut electric rates for BUC’s customers in Bethel, Napaskiak, and Oscarville and the Coop’s other 52 villages should experience the benefit as well.

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“We expect those savings actually to show across the AVEC system,” Kohler says.

AVEC is a non-profit electric cooperative serving Western Alaska. BUC is a for-profit company, and therein lies the savings, says Kohler. She says AVEC’s cost structure is different than BUC’s.

“They are a tax paying entity so included in their rate base is a component that goes to the federal government to pay income taxes, corporate income taxes. We don’t have to do that,” Kohler says. “So, that comes right out of the rate base.”

AVEC expect Bethel’s rates to be 8 to 10 percent lower immediately. There will also be more options for customers paying their bills.

“We’re going to be accepting credit cards for payment,” Kohler says. “And once everybody is fully integrated into our system, you will be able to go on-line and look at your account on-line, pay your bill on-line, do all sorts of things that you can’t do at this particular point in time.”

AVEC plans to keep the diesel generated power plant in Bethel which Kohler says is well run by competent staff. And they’ll keep the same office building in the downtown area.

BUC and AVEC jointly filed in July to the Regulatory Commission of Alaska for an approval of the transfer. Kohler says if all goes well, the RCA will rule on the transfer by December 12th.

“Then we will start the process of all the various things that need to happen to transfer the utility completely to us,” Kohler says. “And we anticipate taking over operation of BUC on May 1st of next year.”

AVEC’s long term plan includes looking for funding sources to improve the equipment at the power plant and eventually seek wind power integration to reduce their dependency on fuel.

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