Alaska Legislature passes bill to expand rural power subsidy program

JUNEAU, Alaska (KTUU) – The Alaska Legislature handed a invoice on the finish of the legislative session to broaden by 50% the quantity of energy that could possibly be sponsored every month for over 80,000 rural Alaska residents in near 200 communities.

Gov. Mike Dunleavy might want to determine whether or not to signal the invoice, let it go into legislation with out his signature, or veto it. His workplace didn’t reply to a request for touch upon Tuesday about his plans for Senate Invoice 243.

Within the meantime, the Alaska Vitality Authority — which manages the ability price equalization program — is performing like SB 243 will come into impact on July 1. There are anticipated to be “fairly dramatic will increase” to power prices throughout rural Alaska this yr.

The thought behind the ability price equalization funds is to assist scale back excessive energy payments within the Bush, and to match power infrastructure investments made on the Railbelt that by no means occurred in rural Alaska. The funds come from the $1.1 billion Energy Value Equalization Fund.

At the moment, eligible households can have 500 kilowatt-hours of electrical energy sponsored every month, however SB 243 would broaden that to a most of 750 kilowatt-hours.

“That is going to make an enormous, dramatic distinction in rural Alaska,” stated Curtis Thayer, govt director of the AEA.

He defined that power utilization differs from neighborhood to neighborhood throughout the state, however the enlargement would meet a few of the present power calls for in rural Alaska. Supporters say it may additionally permit energy utilization to develop in these communities in areas like broadband.

The ability price equalization program started within the Eighties, utilizing the 750 kilowatt determine. That was reduce right down to 500 kilowatt-hours in 2000 when the endowment was created over considerations that the upper quantity was unaffordable.

Thayer says the fund is secure sufficient to pay out the upper funds for the long run, that are estimated to price an additional $16 million per yr. A part of SB 243 might be to direct the fund’s managers to take a position extra aggressively in the same option to the Everlasting Fund.

The fiscal success of the PCE Fund has meant that it has been used since 2016 to disburse $30 million a yr to native governments by way of the neighborhood help program. These funds assist pay for companies, however they’re solely made if the fund has earned sufficient to subsidize rural energy payments first. Three years in the past, the fund was unable to pay for the neighborhood help program for the primary time.

Nils Andreassen, govt director of the Alaska Municipal League, advised the Home Finance Committee that these funds could possibly be as a lot as 80% of a small, rural neighborhood’s finances. He stated he was between “a rock and laborious place” in deciding which cost program to prioritize.

The Senate Finance Committee heard that legislators would want to place a further $320 million into the PCE Fund to supply certainty for neighborhood help within the long-term. The Legislature adjourned with out doing that.

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