Last updated at 10:10 p.m. on Tuesday, Dec. 20


The Anchorage Assembly unanimously approved proposed rate increases by Municipal Light and Power (ML&P) Tuesday night.


In its proposal to the Assembly, ML&P states the rate increases are necessary to pay for costs associated a $275 million new power plant, Plant 2A, which the Assembly approved in 2011 prior to the project’s groundbreaking in April 2014.


ML&P says in the long run, customers should expect lower rates due to the stated efficiency of the new plant, as the company expects to save more than $13 million annually in natural gas fuel costs.


Additionally, the company also claims Plant 2A’s tie-in with the city’s water supply will help reduce system maintenance costs for Anchorage’s water system.


ML&P wants to implement a rate stabilization plan, which would mean “a typical customer will see an effective interim increase of approximately 15.2 percent on their bill,” according to the proposal.


“If ML&P’s rate stabilization plan is not approved for purposes of permanent rates, the typical customer will see an effective increase on their bill of approximately 25.2 percent,” the proposal added. “This final percentage may vary by rate class based on the approved ML&P cost of service study.”


Before customers see any increase in their monthly bill, the Assembly must have first approved a rate increase proposal for the Regulatory Commission of Alaska. Now that it has the Assembly’s approval, the RCA must also approve it.


Fuel cost reductions from the plant will be passed along to customers through the cost of power adjustment (COPA), one of the items making up their bill, according to ML&P’s proposal.


KTVA 11’s Shannon Riddle and Daniella Rivera contributed to this report. 


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