Anchorage voters near approval of $1B deal to merge muni with Chugach Electric
- Voters in Anchorage, Alaska, appear to have authorized the city to sell its municipal utility to Chugach Electric Association in a $1 billion deal, a move expected to save millions by streamlining operations in the adjacent service territories. Chugach has about 68,000 customers, and ML&P has roughly 30,000. That might make the combined utility the largest in Alaska, though Golden Valley Electric Association also serves almost 100,000.
- While the vote is not final — Alaska has begun allowing voting by mail and ballots are still arriving— supporters of selling Municipal Light & Power (ML&P) lead votes by about a 2-1 margin. Chugach has made several assurances in hopes of smoothing approval: the utility will not raise rates in order to pay for the acquisition, and there will be no layoffs.
- The utilities have been considering the move for decades, claiming the time is right because interest rates are low but are expected to rise. The deal could close this year, but the Regulatory Commission of Alaska can take up to six months to decide.
The tally is not final, but supporters of the sale have about 66% of the vote, according to news outlets. Chugach spokeswoman Julie Hasquet told Utility Dive that "in Alaska politics, that's a good number."
The merger has been in talks for years. Anchorage Daily News noted that ML&P's electrical peak demand has declined more than 9% over a decade-long span. That, combined with Alaska's comparatively small population being served by five utilities made the merger appear the logical decision to consolidate assets and avoid overlap.
Hasquet said that if the vote holds, Chugach and MLP will sit down over the summer and develop a final sales agreement. After that, the Chugach board of directors and the Anchorage assembly, essentially a city council, must also approve. From there, the matter would go to the Regulatory Commission of Alaska. The deal could close this year, but the RCA can take up to six months to decide.
That's not Alaska's only merger; Canadian company Hydro One is seeking to purchase Avista Corp, the parent company of Alaska Electric Light & Power in a $5.3 billion, all-cash deal. The participants already secured the approval of the Federal Energy Regulatory Commission (FERC) and the City of Juneau, where AEL&P operates.
- Anchorage Daily News Initial results show Anchorage voters allowing city to sell ML&P to Chugach Electric
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