Weeks after the Railbelt's six electric utilities rolled out a plan to work together, lawmakers are making a major change of their own -- one that could send the utilities back to the drawing board.

Lawmakers switched out a proposed end to rate regulation with a different plan under which the companies could come back in five years and make their case for squashing regulation.

Joe Griffith, general manager of Matanuska Electric Association, said that change could "kill the bill."

"I understand how the legislators view regulation -- they think it's something that keeps the populace feeling a lot better about what's going on," Griffith said Monday. "But it is an election year, let's face it, and there are a lot of people in the public who believe the regulatory commission has their best interests at heart."

The bill may not have a lot of life in it anyhow. The proposal has flopped around like a fish out of water since former Gov. Sarah Palin proposed it early last year.

Palin pitched the Greater Railbelt Energy and Transmission Corp. as a must-have for Alaskan rate payers. By working together on all future generation and transmission projects, the utilities could save millions, she said.

Comparing the fragmented utilities to squabbling siblings, Palin billed her plan as a way to bring together the six entities to end years of bickering. She offered an ultimatum of sorts: Listen up and do as I say, or you won't be getting state money for the big projects you need.

A unified corporation is seen as a way to streamline the spending that goes into building new generation facilities and transmission lines -- and new studies say the Railbelt could need plenty of cash. Several billion dollars' investment is expected over the next couple of decades in order to keep the lights burning brightly.

After a year of negotiations, the six utilities rolled out a fresh plan two-thirds of the way through this legislative session. On first read, lawmakers were aghast, citing chunks of the 22-page bill that seemed to give utilities everything under the sun without promising much in return -- except a pledge to try and keep working together.

Raising the most eyebrows? An exemption from regulation after a five-year transition period. The utilities said the additional layer of regulation for GRETC would be too costly, but lawmakers weren't biting, and neither was the Regulatory Commission of Alaska.

RCA chairman Bob Pickett testified recently that the bill could cause all sorts of problems and appeared to be essentially a back door out of regulation for the electric utilities. His testimony drove the latest version of the bill, which restores RCA oversight, out of a Senate committee where it's been subject to four hearings already.

That in itself may be enough to gel legislative support for the plan, even with 13 days left to the session.

"The utilities are saying they need it, and I'm ready to support it," said Sen. Bill Wielechowski, D-Anchorage. He was among those with deep concerns over the lack of oversight in the utilities' plan.

Likewise, House Energy c0-chair Rep. Charisse Millett, R-Anchorage, said an anticipated House version will take away all regulation exemptions.

"It will be regulated," she insisted. "I won't be the one that will ever offer taking consumer protections away ... I think it's foolish for the Legislature to let a new corporation, another utility, be unregulated."

But Griffith, with MEA, said he's befuddled by the lawmakers' latest action, which is expected to show up in a new House version as well. The bill requires participation from four of the six utilities in order to form a corporation -- and for at least two, Homer and Fairbanks' Golden Valley, regulation may be a deal breaker, he said.

"It's so strange to me," Griffith said. "In my 20-plus years in the industry, they've always said ‘why can't you get your act together and come tell us what you need?' Here we are with an historic bill ... and they're taking it apart.

"I think that the main thing is that we get a basic structure in place," he continued. "If this is not economic, if it's not streamlined, people won't join it -- there won't be an incentive. But I think if we create the basic structure, then the utilities are saying that's what they need. If we have to come back next year and tweak it, that's fine."