Still waiting

Anchorage still is waiting. The proposed $1 billion sale of the city’s Municipal Light & Power utility to Chugach Electric promises no property tax increases as a result of the transaction.

What it does not say is whether taxes will go down, and, if so, when? And by how much? In short, what’s in it for us?

That central question – what the sale means for Anchorage taxpayers – has yet to be addressed, even by the Church Electric slick website urging voters to say yes on April 3 to approve the city’s negotiating the sale. The city also has offered little information.

All we are told is, the Chugach website promises, that the deal is a “win-win for Anchorage.”

Maybe it is. Maybe it isn’t. Until questions are answered in detail about the sale – answered by the city and Chugach – how are we to believe it is a good deal? In addition to promising taxes will not be going up because of the sale, Chugach and the city also, among other things, promise reduced long-term electric rates, no job losses at either utility and increased efficiency.

Who knows how all of that can possibly happen? You can do the math. It is hard to see increased efficiency in all that.

Add to that the secrecy and speed involved in getting the proposed deal on the ballot. So far, talks have occurred behind closed doors. Assembly members, in fact, have been barred from talking in public about the deal’s details.

The purchase, if approved, 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’s slightly more than $1 billion.

It is one of the – if not the – largest single financial transaction in state history. Yet, all the public has is a 23-page assessment pried loose by the Anchorage Daily News, and not much else, other than Chugach’s rah-rah website.

A particularly troublesome aspect of the deal is this: Nobody is arguing against it. Nobody is playing devil’s advocate; nobody is saying, “Hey, wait a second.” Mayor Ethan Berkowitz wants the deal, so ML&P is not going to challenge the sale. Chugach wants the sale, so it is not going to offer any bad news. Who is asking the tough questions for the public and taxpayers?

We have said it before, we’ll say it again, a cynic might think the rush to get the on the ballot and approved might have something to do with the upcoming mayoral election.

So, all of Anchorage waits for answers. If the deal is approved, the city would get a lot of money. What does that mean for property taxpayers?

One Response to Still waiting

  1. Tom McGrath February 12, 2018 at 5:07 pm

    I wish that answers in the way of a spread sheet would be provided also. I love numbers but I can figure out a lot by what has been provided. First, the 170 million will probably go into the savings account along with the ATU money. The other 170 million acquisition payment should go there also. I would also put the 142 million in lieu of taxes there but I am not going to hold my breath. Overall, though, a good deal for Anchorage taxpayers. The ATU money has been paying good dividends and added to the ML&P money our savings account at the end of 30 years will be anywhere from 470 million initial dollars to 612 million. That should spin of 23 to 30 million dollars a year to reduce taxes. That is a lot better than the current amount. If we don’t sell ML&P we won’t get the money, we will get higher taxes and in thirty years that new power plant will be worth the scrap steel it will be at that time. I don’t have to like the Mayor, the Anchorage Assembly to like the numbers. Sell now. If you remember ATU, we voted three times and each time our take was less.

    Reply

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