Chugach Electric Association is preparing an Anchorage electricity rate increase after winter’s warmth reduced demand and slashed expected revenue. Executives say electricity sales dropped by 4% last winter, contributing to financial shortfalls despite earlier rate hikes in July and February.
The cooperative, which serves over 90,000 members in Anchorage, relies heavily on high winter usage for indoor heating, lighting, and appliances. Warmer temperatures have reduced consumption and revenue, pressuring the utility’s operating budget and financial standing this year.
At recent board meetings, leaders explained that a January windstorm also cost the utility $1 million in emergency response efforts. Officials will vote later this month on whether to submit the proposed 4% increase to the Regulatory Commission of Alaska.
Matt Clarkson Chugach’s lead attorney said weather remains the main factor impacting sales and driving the current financial strain. Julie Hasquet Chugach’s spokesperson added that long-term trends like energy efficiency, population stagnation, and inflation also affect sales.
She noted that Anchorage’s winters are steadily warming, which contributes to fewer heating degree days and lower seasonal electricity use. Chugach tracks a 10-year sales forecast annually, adjusting it based on weather patterns and energy consumption trends in the region.
The proposed rate increase also aims to protect the utility’s “A” credit rating, which was recently reaffirmed by a rating agency. Hasquet said preserving that rating would allow Chugach to borrow for infrastructure upgrades like LNG facilities and renewable energy projects.
Fairbanks Golden Valley Electric, by contrast, maintained stable sales due to industrial customers avoiding revenue losses experienced elsewhere. Climate experts predict Alaska’s winters will keep warming, especially in Southcentral, where demand for heating electricity continues to decline.
