Alaska utility regulators say they can’t require changes to Chugach Electric charity program

A state utility regulatory agency decided it can’t require changes to a Chugach Electric Association charity program, as requested by the Alaska attorney general.

Chugach Electric’s “Cents for Community” program, set to begin this winter, is designed to round up members’ electric bills to the nearest dollar and donate the extra money to local nonprofits. Members are automatically enrolled, but can opt out of the program. Nonprofits receiving grants from the program will be selected by a group of seven trustees, according to Chugach. The cooperative powers approximately 90,000 retail customers in a service area that includes Anchorage and nearby areas.

Alaska Attorney General Stephen Cox in September asked the Regulatory Commission of Alaska to require changes to the program, arguing because members must opt out rather than opt in to a program providing money “for causes they may not support,” members were being “subject to compelled speech,” Cox said in a Sept. 10 filing.

In a Monday decision, the state commission agreed with Chugach Electric’s position that it does not have authority to regulate the program. The RCA noted that both the Fairbanks-area electric utility, Golden Valley Electric Association, and the Palmer-based Matanuska Electric Association have implemented similar charity programs. The RCA said in its decision that the program “does not involve a utility-related service … Nor does it alter or increase the compensation Chugach collects for providing a utility-related service.”

“While the Commission did not expressly address its jurisdiction to regulate charitable giving programs structured like Chugach’s ‘Cents of the Community’ before, it does so here and finds none,” the decision said.

RCA Chair John Espindola signed the decision on behalf of the five-member commission, but was one of two members who dissented in an attached letter, calling the decision “materially flawed.”

“We have concerns that Chugach’s members are being presented with a charge on their monthly utility bill that is unrelated to the provision of electric service,” Espindola and Commissioner John Springsteen wrote. “We further express our frustration that the automatic enrollment nature of the program has put an unnecessary burden on Chugach members to ‘opt-out’ of a program they have not affirmatively consented to.”

“By rounding up its members’ bills for electric service to the nearest dollar, the program directly affects charges imposed on members and we continue to believe this falls within the purview of the Commission’s jurisdiction,” the two commissioners wrote.

Cox in a statement Tuesday said he was disappointed in the RCA’s decision. However, the attorney general added he may continue to pursue the matter under the state’s consumer protection laws, as suggested by the commission in its decision, saying he believes the program raises “serious constitutional concerns.”

“Yes, members can opt out — but they shouldn’t have to. The default should always be consent, not silence,” Cox said in the statement.

Chugach Electric spokeswoman Julie Hasquet said in a statement Tuesday that the utility is “pleased we will be able to proceed with implementing the program approved by our members.”

“As an electric cooperative, this is a great opportunity to connect with the communities we serve and support organizations working toward a healthier, more robust Alaska,” Hasquet said.

Once the program begins, 501(c)(3) nonprofits within Chugach’s service territory will be able to apply for grants to receive money from the program, Hasquet said.