Questions, questions, questions
It has been suggested that if we want to know how the proposed $1 billion sale of the city’s Municipal Light & Power utility to Chugach Electric would play out we should take a peek at poweranchorage.com where we will find all the answers.
Unfortunately, we did take a look. It is a rah-rah, slick website urging voters to say yes on April 3 to approve the city’s negotiating the sale. The sale is, the website promises, a “win-win for Anchorage.”
Horse pucky. The website says Chugach is pledging that rates “will not go up to pay for the transaction” and the sale would, among other things, reduce long-term electric rates. It promises no property tax increases, no job losses at either utility and increased efficiency.
Think about all that for just a moment. How do you merge two vastly different utilities – one city-owned, one a member-owned cooperative – and not lay off any workers? What about the redundancies in management and line workers? How do you keep all those people on the job and still promise increased efficiency and lower long-term electric rates? And if that is hard to believe, how are we to believe there will be no property tax increases down the road?
There are a lot of questions still without answers, despite the website’s rosy assessment of the deal, and no wonder. The negotiations so far have been carried out behind closed doors. The Assembly’s members, in fact, have been barred from talking about the deal’s details in public.
Little is known beyond what was contained in a brief assessment of the proposal pried loosed by an Anchorage Daily News information request and what is in the ordinance putting the question on the ballot.
It turns out that if negotiations are approved and eventually successful, the purchase must be completed by Dec. 31. Chugach would pay $712 million to cover about $542 million of ML&P debt and $170 million in equity. Over the next 30 years, Chugach would pay a $170 million acquisition payment and $142 million in lieu of taxes. That adds up to slightly more than $1 billion.
A huge question left unanswered on the powder-puff website is this: If the city gets $170 million in an acquisition payment, $142 million in lieu of taxes and $170 million in an equity payment, how much are property taxes going to be cut? If they are not, why not? What does the average homeowner get out of this deal except vague promises of lower “long-term rates”?
And we have to wonder at the speed of the effort. The Assembly in June urged the two utilities to talk; Mayor Ethan Berkowitz announced the deal Dec. 21. To approve the sale, voters will have to – on the same ballot, mind you – approve a charter change. As we have mentioned before, a cynic might think the rush to get it on the ballot and approved might have something to do with the upcoming mayoral election..
If the deal is in the best interest of the city, and you certainly cannot assume that just by looking at poweranchorage.com, somebody should begin talking to the public. As we have said before, a good place to start is with the obvious:
The city would get a lot of money, what does that mean for property taxpayers?