Anchorage Daily News - Friday, June 13, 1997
Voice of The Times
Will city officials protect the public interest?
By CLIFFORD GERHART, Executive Director, Chugach Consumers

Electric utility ratepayers in Southcentral Alaska are about to be handed a bill for between $5 million and $20 million - and they will be getting little or nothing for their money. Here's why:

On Dec. 6, 1996, Municipal Light & Power General Manager Tom Stahr signed a Memorandum of Understanding with the International Brotherhood of Electrical Workers, Local Union 1547. The agreement gives the union a labor monopoly on $200 million of interties construction.

Not only was there no public notification or input on this important piece of city business, no one knew about it - including, apparently, Mayor Rick Mystrom and the ML&P Commission - until it accidentally came to light four months later.

When the grassroots group Chugach Consumers (formerly Citizens for an Independent Chugach Electric) raised the issue before the municipal Assembly, IBEW attorney Helene Antel Brooks sent us a letter threatening legal action.

According to Ms. Brooks, "neither political advocacy, nor any constitutionally protected right to freedom of speech or expression" allows a citizen to interfere with contract deals - a deal that Chugach Consumers believes the IBEW may be cooking up behind closed doors with city officials. She accused Chugach Consumers of trying to "cause a disruption in the contractual relationships of others."

However, both Tom Stahr and the mayor's office agree that this agreement must be, at a minimum, approved by the mayor, if not by the Assembly as well.

It's interesting to note that Ms. Brooks' letter did not question any of the facts or figures presented by Chugach Consumers to the Assembly.

Matanuska Electric Association rescinded the MOU on advice of its attorney in 1990. Chugach Electric rescinded the agreement in 1996. Why? Part of the reason is what common sense tells anyone competitive bidding brings lower prices. In addition, a study commissioned by Chugach Electric found that free, open and competitive bidding estimated savings to ratepayers of $23.8 million or more over the standard IBEW-National Electrical Contractors Association agreement, if all three state interties (Northern, Southern and Glennallen) are built.

CEA and MEA ratepayers overwhelmingly have approved bylaws mandating free, open and competitive bidding. Since the new bylaws were implemented, contractors - both union and non-union - have taken jobs at 40 percent to 50 percent below engineering estimates.

Mr. Stahr has served well the ratepayers of ML&P for many years, but signing the MOU was a bad move on his part. In fact, he had refused to go along with it for years, quoted in The Times saying "it probably wasn't a legal thing to do."

The ML&P general manager said he signed the memorandum because he was afraid the money allocated by the Legislature would be lost if construction didn't begin promptly, However, the money is now controlled by the Alaska Industrial Development and Export Authority and is in no danger of being withdrawn.

Because, by law, ML&P is both a division of the municipality and a regulated monopoly, utility ratepayers must depend on Stahr, Mayor Mystrom and the Assembly to protect their interests in electric power. They can't go somewhere else to shop for electricity.

Furthermore, the memorandum of understanding affects electric customers outside ML&P's exclusive service area. If approved, this agreement would give the IBEW the majority of signatories and the majority of finance that will obligate all Railbelt electric ratepayers to pay for the deal.

Besides costing every ratepayer in Southcentral, the MOU would freeze out qualified open-shop contractors and other unions - Ironworkers, Laborers, Teamsters and others -from a chance to do the work. It's hard to imagine why these companies and their workers should let publicly funded work go to a singled favored source because of a backroom deal.

Utility reform has come a long way in Southcentral Alaska in the last few years. Ratepayers have consistently backed independent candidates and conflict-of-interest bylaws at both MEA and CEA.

Local electrical co-ops are concentrating on the coming deregulated environment. Competition may be fierce. Now is not the time to add bloated capital costs to the utilities. The MOU goes against the grain of progress in our electrical industry, and it undermines the efforts independent boards at MEA and CEA have made. But it's not too late to kill this deal.

Rather than dismissing the situation as a "what's-the-big-deal, it's politics-as-usual between special interests," Anchorage's elected officials must decide for whom they work - the ratepayers and voters or the IBEW Union.