After Alaska Electric Light & Power filed a rate increase case with the Regulatory Commission of Alaska last week, some Juneau residents say a 20% bill increase is too high.
Lynda Giguere is one of a few residents who submitted a public comment on the case. She said the additional cost would hurt her wallet.
“I mean, 20% is significant — when your utility rates go up that high,” Giguere said.
She called it the “icing on the cake” of recent cost-of-living spikes, including on groceries and gas.
Giguere and her husband have lived in their 1,600-square-foot home on Douglas Island since the 1980s. A few years ago, they made the switch from pricey oil to more affordable hydropower by installing an electric heat pump and radiant heating.
Her most expensive electric bill within the past year was a little over $480 for the home’s two units in January. With a 20% increase, a similar month next winter could cost her about $576.
“Holy moly, I’m knitting a sweater,” she said.
Giguere is retired, and although she and her husband have social security and pensions, she said the price hike could limit their ability to visit family in the Lower 48.
“It’s not where I would like an extra thousand-plus dollars to go a year,” she said.
Last year, AEL&P made about $47 million in revenue, according to its parent company, Avista Corporation.
Juneau’s sole electric utility last raised rates in 2023 by 6%. That increase was based on costs in 2021. Between then and 2025, prices on many products AEL&P needs to operate have soared.
Alec Mesdag, AEL&P’s CEO, said copper pipe went up nearly 140%, while a single distribution pole and transformer increased 105%, according to company purchases. Mesdag said the rising cost of equipment and capital improvements created an annual $10 million hole.
To fill it, the power company filed to raise its base electric rate by an overall 25%, which Mesdag said would pencil out to a residential bill increase of about 20%.
Accounting for Greens Creek Mine
The 5% discrepancy is because a surcharge associated with Hecla Greens Creek Mine that’s been appearing on electric bills will now be accounted for in the base rate instead.
“It looks bigger than it is because we’re making that adjustment,” Mesdag said.
Mesdag said AEL&P used to assume the mine would pay $8.7 million per year for hydropower. In the past, the power company built that assumption into how they determined electric rates for other customers. AEL&P subtracted that assumed revenue from the cost it needed to recover from customers overall, then calculated electric rates for everyone else.
When the mine used more power than AEL&P accounted for, residents would see a small reduction on their electric bill under the “cost of power adjustment” line. When the mine used less power, residents would see a surcharge instead. For years, Mesdag said the mine hasn’t been using as much electricity as AEL&P expected.
Last year, Greens Creek spent $2.65 million less than the power company had accounted for. According to Hecla, the mine got 62% of its electricity from AEL&P last year.
Mesdag said the mine has both improved its energy efficiency and had more service interruptions. Sometimes surplus power isn’t available due to drought or construction, and sometimes trees hit the transmission line out to Admiralty Island.
“For operational reasons, Greens Creek takes a few more outages than it used to,” Mesdag said.
Now, AEL&P plans to assume the mine will use less energy, so the surcharge will be moved into the price per kilowatt-hour, or base rate.
“It takes a cost that we’re already paying on our bills, and it moves it into base rates,” Mesdag said.
Proposed rates
If the commission approves AEL&P’s request, residential base rates would rise by 26.7%. Large commercial customers would see a 23.5% increase and small commercial customers would see a 22.8% increase.
Mesdag said that’s because commercial customers are currently bearing a larger proportion of the cost for AEL&P to provide power.
“Based on our cost of service study, it appears that commercial customers — large commercial and small commercial customers — are subsidizing residential customers,” Mesdag said.
He said Juneau residents would still pay a lower electric rate than the national average, but he understands it’s a substantial increase.
Mesdag said the company is willing to offer guidance to improve home energy efficiency and work with people who fall behind on their payments.
The power company plans to raise rates in two phases. The first rate hike of 12.5% takes effect in June.
The official public comment period closes at 5 p.m. on May 28, but the commission will accept comments submitted after that. The rate case is expected to conclude around August 2027.
