Concern For Rural Alaska Leads To Power Cost Equalization Court Filing

Author: Anthony Moore |

A group including the Alaska Federation of Natives, multiple boroughs and cooperatives are suing the Dunleavy Administration over the current lack of funding for the Power Cost Equalization Fund. The complaint challenges the decision to transfer the more than $1 billion in the Power Cost Equalization (PCE) Endowment Fund, located in the Alaska Energy Authority, to the Constitutional Budget Reserve under article IX of the Alaska Constitution. The complaint states that the Gov. Mike Dunleavy’s decision violates the state constitution and interferes in the legislature’s appropriation power in violation of the separation of powers doctrine.

 

Curtis Thayer, Executive Director for the Alaska Energy Authority told the Kenai and Soldotna Chamber of Commerce Luncheon:

The way that this is is the legislature needs to vote by three quarters in order to, what they call, a reverse sweep. If not, then the money gets swept back into the Constitutional Budget Reserve. Right now, the legislature was not able to get a three quarters vote. Therefore, the money is being swept and the money is not available to rural Alaska. One thing I will say, there will be communities in rural Alaska, they will go bankrupt. Their utilities will go bankrupt. One utility, this is 20% of their budget. They serve multiple. So it is really a concern for rural Alaska, a concern for us, a concern for the legislature and for the governor. Hopefully this thing gets resolved and we can get resolution going forward.”

 

Thayer explains what PCE is:

The purpose of the program is to equalize the power cost to what Anchorage, Fairbanks and Juneau pay. The regulatory commission of Alaska looks at those power costs, it’s about 20 cents and then the PCE program pays the difference of the 20 cents to actual the cost of power in the community up to 500 kilowatts per month. Last year, we spent $29.6 million on the program. Some of these village costs are 40 cents, 60 cents, over a dollar a kilowatt. Again, the base is 20% or 20 cents. When you look at it, the average person in a rural Alaska that benefit from this program receives about $380 a year.”

 

Gov. Dunleavy released a statement regarding the court filing:

I have authorized my administration to pursue an expedited judgement on the future of the Power Cost Equalization Endowment Fund. This issue is too important to delay any further. A decision by the court will help clarify what is in the General Fund and what is not to determine what gets swept into the Constitutional Budget Reserve to repay it. In order for us to fulfill our constitutional duties, both the executive and legislative branches need to know if the PCE is subject to the sweep.”

 

The complaint was filed on Monday, July 19th.

Author: Anthony Moore

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