Anchorage Daily News (AK) - March 22, 2008
Voice of the Times
Chugach Electric members rejected scare-mongering
By ALEX GIMARC - Links:  Original URL (now dark)  Web Archive

Chugach board 3/22/08

When the Chugach Electric Association ratepayers elected a new majority for their board of directors last April, they specifically rejected control by the IBEW, interminable scaremongering and thinly veiled threats.

[mug shot Gimarc]

It is now 11 months after that election and time to report to the community where we are, where we are going and why.

The board requested a review of Chugach at the business level by several local business leaders. This blue ribbon panel produced a report that can be found at the Chugach Web site: 

The report was released to the general public on Dec. 19 in the first press conference held in the Chugach board room in over 20 years. The recommendations did not surprise the new board majority, nor was it a surprise to . . . 

(cont'd from front page) the former majority, former management or to the IBEW. Nothing in it was new.

Recommendations include:
• Look at combining Chugach with other Railbelt utilities to get better efficiencies and control costs.
• Take all necessary steps to pursue the lowest cost rate structure for all customers.
• Look at eliminating the co-op as the basic business structure.
• Normalize relationships between business and labor.
• Do comprehensive benchmarking yearly, with a major update every five years.
• Release everything possible to the ratepayers for maximum transparency.

This review provides a roadmap for the future of the association, and we will implement appropriate recommendations in ways that will best benefit the members of the association. In this regard, we changed chief executive officers in December so that we could quickly move in a new direction.

Chugach signed a memorandum of understanding with ML&P and Homer Electric for replacement generation. This agreement and other joint projects should result in combined savings to our customers approaching $200 million. This will bring more efficient generation on line by 2012 that will help control costs over the next decade. We all continue to work toward our common goal of cost control. 

Contrast this with previous years when Chugach was suing everyone in sight including former directors. We are doing everything possible to get out of the courtroom and into the boardrooms where we can do business with our sister utilities.

We are also in the third year of negotiations with Cook Inlet natural gas providers for affordable natural gas for the next seven years. 

Chugach needs new generation to move us away from Cook Inlet natural gas. The target for this new generation is around 2020. While we do not know how this new energy will be generated, we know that it will be too large of a project for any single railbelt utility to pursue by itself.

We are working with the state and sister utilities on this new project, as planning for it has already started. Possible generation sources include, but are not limited to, renewable hydroelectric, coal gasification, biomass gasification, clean coal, natural gas, nuclear, and geothermal. Everything is on the table

In all of this, we will continue to keep our ratepayers and Alaskans in Southcentral Alaska fully informed. We will continue to take excellent care of our employees. And we will continue to put management in place to move us in this new direction.

As with all changes, these have triggered some reaction in opposition. Last year, a new organization composed of former directors, the current board minority, and a former CEO, formed and started blasting away at our new direction.

Ladies and gentlemen, disagreement with a new direction does not mean we don’t have one. And every single one of the people involved in the new organization could have done something to move this association into the future. They chose otherwise. We are simply solving known problems they left for us.

Finally, reliability is not our ultimate goal, for perfect reliability uncoupled from costs is most certainly unaffordable.

Chugach is moving forward into a new, uncertain and exciting future. We can do better than we have done in the past. We will do better now and into the future. And we will always keep you, our ratepayers, well informed of what we are doing and why so that you may guide us. 

Alex Gimarc is an elected member of the board of directors and board secretary for the Chugach Electric Association.