Municipality and Chugach Electric agree on sale of ML&P
The Municipality of Anchorage and Chugach Electric have agreed on the sale of Municipal Light & Power. The agreement includes a $10 million reduction in the purchase price, making it just under $1 billion.
Other terms of the agreement include depositing $36 million in a new restricted rate reduction account, to protect original ML&P customers from rate increases.
It also includes a $15 million donation by the municipality for a treatment center. Within five years after closing, the municipality must use that money for the Alaska Center for Treatment, a planned substance use disorder center will offer a combination of outpatient, inpatient treatment options, transitional housing and crisis stabilization.
The goal of the acquisition is to save Chugach customer's money over the long-term. According to Chugach, regulatory approval of the deal would lead to roughly $200 million in net savings for the combined utility’s customers over the next 40 years.
Almost two-thirds of voters in the 2018 municipal election approved Chugach’s purchase of ML&P, a deal backed by Mayor Ethan Berkowitz.
Providence Health and Services is a party to the agreement and sent a statement Tuesday regarding the sale agreement:
"Providence supports the ML&P/Chugach merger transaction to create one efficient electric utility company for Anchorage. As Anchorage’s largest commercial ratepayer, Providence filed as an intervener to have a voice and ensure all ratepayers are treated fairly in the process. We are pleased that Chugach, the Municipality, and Providence were able to work together and reach an agreement that merges the utilities while adequately protecting rate payers in the community."
Other companies listed as parties include: Federal Executive Agencies, Matanuska Electric Association, Enstar Natural Gas Company and Alaska Energy Authority.
The Anchorage Assembly unanimously passed a proposed resolution regarding the sale Wednesday during a special meeting.
The resolution approves a stipulation to resolve issues raised during the Regulatory Commission of Alaska proceedings regarding the sale of ML&P.
The Regulatory Commission of Alaska has until February to approve the deal. At that point, all of ML&P’s customers and employees would formally become Chugach’s and the utilities would function as a single entity.
Dave Goldman contributed to this report.
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