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Anchorage, Alaska, mayor wants to ask voters to approve $1B utility sale

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Anchorage, Alaska, mayor wants to ask voters to approve $1B utility sale

Anchorage, Alaska, Mayor Ethan Berkowitz plans to take the proposed $1 billion sale of city-owned Anchorage Municipal Light & Power to Chugach Electric Association Inc. to voters. Berkowitz said Dec. 21 that he will ask the Anchorage Assembly to place a proposition on the April 2018 ballot asking them to authorize the deal.

"This proposal represents a great opportunity — it protects taxpayers and ratepayers. It helps secure Anchorage's fiscal and energy future," Berkowitz said in a news release. The decision to proceed with the sale to Chugach, an electric cooperative also headquartered in Anchorage, was based on a competitive offer and Chugach's commitments to neither raise rates nor layoff employees because of the sale.

"We believe this is good news for all of Anchorage. Rates will not go up, jobs are secure, and hundreds of millions of dollars will be saved in the coming years," Chugach CEO Lee Thibert said.

The sale to Chugach would enable the municipality of Anchorage to pay off roughly $525 million in debt, invest additional funds into a trust and preserve existing utility contributions, according to the mayor's office. Chugach and the city will hold hearings on the proposed sale ahead of the Assembly's vote in late January 2018. In a June resolution, the Anchorage Assembly urged ML&P and Chugach Electric to "explore potential merger opportunities." The proposed transaction, however, is for Chugach to purchase the municipal utility.

If the Assembly agrees to the ballot proposition and voters consent, ML&P and Chugach would still need to finalize the proposed deal and present it to the Regulatory Commission of Alaska for approval, a spokeswoman for the mayor said.

Matanuska Electric Association Inc., located about 40 miles northeast of Anchorage, has also expressed interest in purchasing part or all of ML&P. The three utilities in January signed a power pooling and joint dispatch agreement to share their generation and transmission assets to benefit their customers. The mayor's spokeswoman declined to comment on whether Matanuska had placed a competing offer, citing a nondisclosure agreement. A representative for Matanuska did not immediately return calls seeking comment Dec. 22.