FAIRBANKS - A complaint by the operator of Pogo Gold Mine over a contract with a Fairbanks utility has enough merit to warrant an investigation, the Regulatory Commission of Alaska has ruled.
The commission in late December agreed to consider Teck-Pogo Inc.'s complaint accusing the Golden Valley Electric Association of breaching state law, a contract between the mine and the utility, and the utility's tariff.
The RCA order also appointed a hearing examiner and added Pogo's complaint to a docket that already included the review of the contract between the two companies.
Utility president Steve Haagenson said the ruling was basically just to compile the papers into one docket, and called the order "standard procedure," according to GVEA spokeswoman Dianne Porter.
But Grace Salazar, head of the consumer protection division of the RCA, called the ruling a "big deal."
The complaint involves a contract between the two companies regarding the sale of electricity from GVEA to the gold mine 35 miles northeast of Delta Junction.
Last January, the two parties created a special contract requiring the utility to provide up to 13 megawatts of power to the mine during its operational life and binding Pogo to an annual minimum payment.
Under the agreement, the utility is not required to provide more than 2 megawatts of power to the mine between Jan. 1, 2006 and July 1, 2006, according to RCA documents.
When the mine's completion date was pushed forward, Pogo asked for more than 2 megawatts of electricity earlier than July. The utility said it would have to charge a much higher rate because the demand would require the use of rarely operated power plants that were expensive to run.
On Oct. 13, Pogo filed a complaint with the RCA alleging that the utility had breached the contract, as well as state statutes and the GVEA tariff, or operating guidelines.
The companies disagree over whether the January contract is binding. In a response sent to the regulatory commission in late November, the utility did not admit that it was bound to the contract, according to RCA documents.
Under RCA regulations, parties must submit special contracts, such as the one concerned, for review by the RCA 45 days before enactment. The utility submitted the contract for review on Nov. 16, 2005.
According to the commission's recent ruling, there is "good cause to investigate" the complaint filed by Pogo and the implementation of a contract without RCA review.
Porter, the GVEA spokeswoman, said the week before Christmas that the utility was close to resolving the dispute with Teck-Pogo.
