Gov. Mike Dunleavy signed Sen. Lyman Hoffman’s Senate Bill 243 last week, which raises the maximum kilowatt-hour available to residential customers from 500 kWh to 750 kWh per month.
Sen. Lyman Hoffman testified on the Senate floor earlier this year:
“The endowment, as was stated, has been underfunded from its original concept for the last 15 years. It was initially set up for 750 kWh. It was reduced to 500 kWh back in the year 2000. Today, the state has invested $1.1 billion into the fund.”
Alaska’s PCE program was established in 1985 to provide economic assistance to communities and residents of rural electric utilities where the cost of electricity is three to five times higher than costs in urban areas of the state. The program is funded by the earnings of the PCE Endowment Fund and subsidizes utilities for nearly 200 communities and nearly 82,000 residents.
Sen. Hoffman added:
“Let’s make no mistake about it, this fund, although its primary purpose is to assist in the high cost of energy throughout rural Alaska, it was expanded a few years ago to community assistance. That is a program that is widely accepted throughout the state of Alaska and every community are assisted through the earnings from the Power Cost Equalization program. Although the program is called the Power Cost Equalization program, virtually every citizen of the state of Alaska benefits directly or indirectly by this fund.”
In signing the bill, Gov. Dunleavy said that Alaska is faced with the highest inflation rates seen in 40 years, adding that Alaskan families – especially those in rural Alaska – are struggling to keep up with the rising costs of gasoline, foods, and basic foods.
Additionally, the bill updates the PCE Endowment Fund from a 4% nominal return to a prudent investment rule, allowing the fund to be managed with care to circumstances and preservation of purchasing power over time to maximize the expected total return from the fund.