State threatens Nome to be cut off from Power Cost Equalization
On Tuesday, Feb. 10, the State of Alaska’s Regulatory Commission notified Nome Joint Utilities General Manager John Handeland in a letter that payments of the PCE disbursements to Nome are suspended until NJUS files outstanding fuel and annual reports.
The Power Cost Equalization is a state program that subsidizes high electricity costs in rural areas to match rates in urban cities and significantly reduces electricity bills for NJUS customers.
According to the letter, NJUS has not filed required annual reports for 2022, 2023 and 2024 and has failed to file fuel reports for 2023, 2024 and 2025.
“Commission Staff has contacted NOME on multiple occasions to remind the utility of its filing obligations,” the letter said. The commission recommended suspension of the PCE disbursements to Nome until the 2024 annual report and the 2025 fuel report are filed so that the commission can establish permanent PCE amounts. A footnote in the letter says “while prior reports are also overdue, only the most recent reports are required to determine permanent PCE amounts.”
A footnote explained that if a participating utility fails to file its annual or fuel reports, the PCE becomes interim and refundable and the commission can recommend that PCE payments be suspended.
According to Tuesday’s letter, the last fuel report was filed January 30, 2023 and the last annual report was filed December 15, 2022.
NJUS Manager John Handeland said in an interview with the Nugget that regardless, the PCE credits will continue to be applied to Nome customers and that NJUS is preparing the necessary reports to be filed by the beginning of next week at the latest.
“It will be reinstated,” Handeland said. “We're virtually ready to send the reports to the state, probably early next week.”
He explained that a CPA was in Nome recently to help with NJUS’ years of backlog of financial audits. NJUS is supposed to include audits along with the annual PCE report. He said the 2021 audit is finished and now they are working on 2022, 2023 and 2024 to be audited in the next few months, he said.
The PCE disbursements are supposed to come in monthly, but Handeland said that due to staffing shortages at the state offices, “there have been times when we wait, like four months and we get four months all at once.”
Asked why this situation arose and how it could get so far as to a suspension letter from the state, Handeland said, “As you know, [the audits] have been the topic for a number of months. Things were behind because we did not have people for a while, and so that's why we brought in extra help, a CPA, to help us get everything in order and get things filed.”
