12.19.2013
FAIRBANKS — Aurora Energy is asking state regulators for permission to roughly double the rate it charges for supplying steam heat to downtown customers.
The utility provides steam through an underground network to the downtown neighborhood surrounding its First Avenue power plant. Steam heat offers a cheaper alternative to heating with fuel oil — about a third the current cost — but Aurora claimed in filings with the Regulatory Commission of Alaska that the service isn’t profitable for the company.
The company would like to boost its rates by 95 percent, from $10.50 to $20.45 per 1,000 pounds of steam.
In a Dec. 9 RCA filing, Aurora Energy President A.L. “Buki” Wright said it’s been at least 28 years since there was an increase in the steam heat rate and that the current rate only covers about half the cost of providing the service.
Aurora also provides hot water to some downtown customers, though that service isn’t regulated by the RCA. The company is asking the steam-heat increase to take effect Jan. 23.
In testimony filed with the RCA, Wright said, “Our steam customers have received service that is not only priced substantially below the rates that similarly situated hot water customers pay, but is also far below our cost to serve them.”
Aurora also is asking customer rates to reflect company risks, including the potential for greater environmental regulation and aging infrastructure.
The company would like the rates to take effect on an interim basis on Jan. 23. If the RCA eventually agrees to a lower rate, the difference would be refunded to customers.
It isn’t the first effort by Aurora to substantially hike its steam heat rates. The company asked the RCA in 2010 for permission to deregulate its steam heat service, with plans to roughly double its rates during the course of several years.
The request was denied the following year. The commission said Aurora had failed to provide details that there was an unreasonable difference between steam heat rates and the unregulated rates for its hot water customers.
The RCA will accept input until Jan. 13. Comments may be submitted at the RCA website, www.rca.alaska.gov, with the matter number TA76-119.
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