Alaska Attorney General asks Mat-Su, Fairbanks electric utilities to reconsider charity programs

By James Brooks
Alaska Beacon

What you need to know:

• Alaska Attorney General-designate Stephen Cox has raised legal concerns about long-standing charitable “round-up” programs operated by Matanuska Electric Association and Golden Valley Electric Association. The programs automatically round up members’ utility bills to fund local nonprofits, unless members choose to opt out.
• Officials from both cooperatives said the programs are community-driven and member-approved, with strong local support and oversight by volunteer boards.
• Cox previously challenged a similar program proposed by Chugach Electric Association.

Alaska Attorney General-designee Stephen Cox is asking two of Alaska’s largest electrical utilities to reconsider years-old charity programs that have benefited local nonprofits.

In a pair of letters sent to Golden Valley Electric Association and Matanuska Electric Association on Thursday, Cox says he believes their charitable round-up programs may violate state law and the U.S. Constitution.

“My office is not asking for Operation RoundUp to be discontinued, but rather reformed so that it fully honors transparency, consumer rights, and constitutional rights,” Cox wrote in the letter to MEA CEO Tony Izzo.

The Department of Law sent copies of the letters to the Alaska Beacon in response to questions about why the attorney general had raised concerns about a proposed program by Chugach Electric but not two older, already-operating programs elsewhere in the state.

In its newsletter to consumers this month, Chugach Electric Association — the state’s largest electrical cooperative — said it was continuing an indefinite suspension of its planned “Cents of Community” effort because of “legal concerns raised by the Alaska attorney general.”

“The Attorney General’s Office previously took no action against similar programs operated by Matanuska Electric Association Inc. and Golden Valley Electric Association Inc., for more than 15 years,” the newsletter stated.

All three utilities are member-owned and -governed, and in all three cases, members voted to install programs that round up utility bills to the next dollar. Proceeds from that rounding are collected and distributed to nonprofits chosen by the utilities.

In each case, the programs are opt-out — members are automatically enrolled but can unsubscribe from the round-up program if they want to. 

In 2023, when Chugach Electric customers were asked about the program, it was described as “all in,” and members approved it by a wide margin.

Similar programs are common across the country. When GVEA created its Good¢ents program in 2011, more than 260 electrical cooperatives had similar programs, said GVEA spokeswoman Ashley Bradish.

“Over half of GVEA’s membership opt to round-up their monthly bill and their small change continues to make a big impact on the communities we serve,” she said by email.

Altogether, GVEA’s program has distributed almost $1.9 million to a variety of nonprofits in the Fairbanks area. Recipients are chosen by a volunteer, six-member board.

Local voters approved MEA’s Operation RoundUp in 2011.

“Approximately 67% of our co-op membership participates in the program which provides on average $50,000 in grants on a quarterly basis to local community organizations and projects,” said Jennifer Castro, senior manager of communications and community engagement for the cooperative.

Writing on Tuesday, two days before the attorney general’s letter, Castro said MEA “absolutely” intended to continue the program.

“It’s successful. Our members love being able to support their community and it’s also personal,” she said. “Whereas when you go to the grocery store and the electronic pad prompts you to round up to support a national organization that you’ve never heard of — with our program our co-op members change goes directly to making positive change within the community we power.”

Chugach Electric had intended to begin its program in October but postponed its implementation when Cox challenged the program soon after Gov. Mike Dunleavy designated him as attorney general in late August. 

In a September filing with the Regulatory Commission of Alaska, which controls electric utility rates, attorneys for the Alaska Department of Law questioned the legality of Chugach’s program.

The commission ultimately decided that it lacked jurisdiction over the issue, but Cox said he could pursue the matter in state court.

It isn’t clear why Cox initially challenged Chugach’s prospective program but not those already operating in Fairbanks and the Mat-Su. 

Julie Hasquet, a spokesperson for Chugach, said the utility doesn’t know. 

The Department of Law did not provide an explanation for the three-month gap between the action against Chugach and the letters sent to MEA and GVEA.

In the action against Chugach and in the new letters, Cox said he believes an opt-out program could be considered a negative option marketing scheme, something prohibited by law.

Recipients of the MEA and GVEA programs are chosen by a volunteer board, but Cox said “members do not control where their money goes.”

“The U.S. Supreme Court has repeatedly held that individuals have a right not to subsidize speech or causes with which they disagree. An opt-out mechanism does not fully resolve that concern when participation is presumed rather than chosen,” his letter to MEA and GVEA states.

That argument resembles one the Department of Law used for five years in an unsuccessful legal campaign to require public employee unions to reauthorize their membership annually. The Alaska Supreme Court ruled against the state on that issue, and the U.S. Supreme Court declined to take up the topic.

“I am hopeful that MEA will consider the concerns in this letter and switch to an affirmative opt-in program, which would substantially mitigate the legal concerns while preserving the program’s charitable mission,” Cox wrote, using similar language in his letter to GVEA.

Hasquet, at Chugach, said the board of that utility will vote in early 2026 about whether to go ahead with its round-up program or not.

“The key to a successful return would be resolution of any legal issues brought forward by the Alaska Attorney General,” she said.

If the utility goes forward with the program, Chugach expects it would result in about $400,000 per year for charities in its coverage area.

“One of the principles of a member-owned electric cooperative is concern for community. We were looking forward to the opportunity to support charities in our service territory, especially now with dollars dwindling on other fronts (state and federal),” Hasquet wrote by email.

“The program was approved by Chugach members, and a Board of Trustees, made up of Chugach members, was appointed by the Chugach Board of Directors. The Board of Trustees would be the individuals reviewing and approving the grants. We believe this is a great opportunity to support charitable organizations with member-directed dollars,” she said.

“We remain committed to the cooperative spirit of concern for community and to pursuing initiatives that support charitable and community efforts.”

Alaska Beacon is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Alaska Beacon maintains editorial independence. Contact Editor Andrew Kitchenman for questions: info@alaskabeacon.com. Follow Alaska Beacon on Facebook and X.