A couple of points

Voters are being asked to approve the sale of the city’s Municipal Light & Power utility to the Chugach Electric Association, and, at the same time, OK a change to the city charter to cut the number of votes necessary for the sale. The secrecy surrounding the proposed deal is stirring pushback.

A couple of things stand out. During this week’s Town Hall on the issue, Lee Thibert, the chief executive of Chugach, promised efficiency, eschewed any notion of a monopoly being created and assured everybody the sale is only one step in a lengthy public process.

Then he said: “It’s not about selling the utility to get the highest value. It’s about creating one utility.”

Huh? The anticipated sale is one of the, perhaps the, largest single sales in Alaska history and we are not about getting the “highest value?”

A large swath of Anchorage is served by Chugach, an electric cooperative owned by its members. ML&P is owned by residents of Anchorage, many of whom are Chugach members. In effect, we are being asked to sell our utility to ourselves which presents a dilemma. Does the Chugach in us want a lower price? Does the ML&P in us want a higher price? Who decides? How?

That is why this entire process should be wide open to the public. It has not been and there has been darned little public scrutiny of the sale, except for a Goldman Sachs study commissioned by the Assembly that was kept secret until the Anchorage Daily News blasted it loose. There was no bid process, no requests for proposals, no adherence to procurement rules needed even to buy toilet paper. Five other entities sent letters of interest, but were brushed off.

The secrecy is egregious enough that Judy Brady, the chair of the ML&P advisory commission, resigned in protest.

Another thing that jumps out in all of this is Municipal Manager Bill Falsey’’s dismissal of objections to the sale process.

”If I cannot persuade you the process we used is good, look at the deal on the merits,” he said. “We haven’t heard a substantive objection to the merits of the deal.”

No objection? The public does not know enough of the process details to be able to weigh its merits. Who knows what has been said or promised so far? How is Chugach going to pay for the deal? What are the unions getting? And the questions go on and on.

The public has been kept in the dark for most of this and the Chugach and the city’s attitude, we have have mentioned before, seems to be: Trust us. It is hard under the circumstances. Trust comes from transparency.

Chugach has launched a $245,000 advertising campaign to persuade Anchorage voters the sale is a good thing. It may be, but it is the target of public skepticism not because of its merits, but because of the secrecy surrounding how we got to this point.

We hope the campaign is a good one. Chugach and the city will need it.

2 Responses to A couple of points

  1. Will Gay March 9, 2018 at 3:10 pm

    1)The proposition to sell with a 50% vote versus 60% as required by the Municipal charter is an end run around the charter. It most certainly is unethical if not illegal on the same ballot. The Charter and the testimony of the Charter Commission at the time the 60% requirement was created most certainly targeted the exact circumstances that this proposition would trigger.
    2) The provision that “due diligence” will be done AFTER the vote of the owners (taxpayers) and that this could affect the price paid will GUARANTEE that the final offer will be much less than is currently being touted. (it’s worth noting that Begich in his role with Chugach stated in the March 8 ADN interview that he has “not been involved in the financial details”. His involvement has been to “manage public perception”.) Is there any wonder about why the skepticism? Due diligence is always done prior to approval in the private sector, BEFORE a deal is done. This gives Chugach an unfair position. If they can get the votes on the Assembly to approve a lower price (with the IBEW lobbying in the background)….sorry taxpayers you just lost!
    3) Why is the IBEW so silent on this proposal.They have always taken a strong position in the past on proposed utility sales. Think about the leverage they will have now with just a single contract instead of two. No layoffs are guaranteed. What’s not to like. Just be quiet and watch it happen?
    4) Which leads into the next myth…. rates will go down. Rates will go up as a result of this deal. But with other factors it will be hidden from you. They will juggle the numbers such that gas prices, inflation and labor costs will hide the other contributors. The proponents even revealed their strategy by citing these very factors in the Town Hall (CYA). All the things you are promisedi now will be camouflaged by “managing public perception”.Sorry ratepayers you just lost!
    If this were a hard numbers bid, with private sector principles of reductions in the newly combined workforce to realize all possibles efficiencies , including a review and renegotiation of ALL subcontracts, including labor to benefit the RATEPAYERS…. but it’s not.That is why negotiations have been in secret and hundreds of thousands are being spent on “managing public perception”. Vote NO on this one.

  2. Bill Hutchison March 11, 2018 at 7:44 am

    The process shrieks “CORRUPTION!”. Vote NO!


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