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Petroleum News Story by Alan Bailey (NGP Photo).  In a Sept. Alan Bailey, Petroleum News, HEA, CEA, MEA, ARTEC, Homer Electric, lobbying, grants, Dave Harbour Photo15 letter to state Rep. Doug Isaacson, Brad Janorschke, general manager of Homer Electric Association, said that his utility had quit the Alaska Railbelt Cooperative and Electric Co., or ARCTEC, in early 2013 because, rather than pursuing cost-saving projects that would jointly benefit ARCTEC’s member utilities, ARCTEC’s sole purpose seemed to have become lobbying for grant funding from the state Legislature. A desire of some ARCTEC members to hire a CEO for the organization had also factored into Homer Electric’s decision, Janorschke said.  *     *     *   Joe GriffithARCTEC CEO, told Petroleum News Sept. 23 that, while concerns about the cost of hiring of a CEO may well have motivated Homer Electric to leave the organization, Janorschke’s accusations that ARCTEC had become purely a lobbying organization were essentially “balderdash.”  

Observation: we may have more to say about this in a future editorial comment.  

Suffice to say, we normally default to having the 'cost causer be the cost payer.'  This means that — in this case — the rate payers receiving electric service have to pay for it.  

Alan Bailey's article is all about the accusation that ARTEC members are seeking to have others pay for the rate payer projects and benefits in their service areas.  

We tend to put significant credence on the Homer Electric decision and position while still leaving a little opening for valid counter arguments by the other ARTEC utilities.  We would observe that the word, "Balderdash", adds little credibility to construction of a valid counter argument.

We would ask each of the ARTEC members to answer several questions: "If your utility, under your leadership, needs an ARTEC group, and is not capable of properly serving your customers, why are you still in charge?"  

Another question might be, "If one of ARTEC's supposed values is having the member utilities coordinate with one another, why do you need a bureaucracy to communicate; why not do that as a matter of course, as good managers?"  

Lastly, if you would justify your own request for state subsidy by saying, "Well, Fairbanks is trying to get the state to subsidize its natural gas system," I would suggest that should also be the responsibility of very highly compensated utility managers, rate analysts, lawyers and employees in that service area which they have pledged to serve.  

Yes, the time honored concept of 'just and reasonable' rates arises from the foundational principle that the 'cost causer is the cost payer'.  

When we try to have the state give public money, we take that money 1) from the taxpayer, and/or 2) from the citizens elsewhere in the state whose highway, port, public safety and education projects may go begging.  

This makes ARTEC rate payers pay less for the service than it actually costs and thus creates the circumstance of 'an unjust and unreasonable' rate.  

Usually an 'unjust' rate is too high a rate; in this case, it means rate payers pay too little for their service which politicians allowed other parts of the state, or other taxpayers to subsidize.  

Lastly, being realistic, we acknowledge that politicians trade money and projects back and forth all the time, creating inequality of benefit wherever they go.  

For example, ARTEC has already received over $50 million in state money grants while the votes to get that money required trading money to other parts of the state.  Is that a 'just and reasonable' process?  Probably not.

Is it likely to see reform?  Not likely.       -dh