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Proposed PCE increase advances

More equalization, long-term solution needed for price issues

Posted: March 21, 2012 - 12:01am

Rural business owners and home energy customers testified in favor of proposed changes to the Power Cost Equalization program that would make businesses eligible for cost savings and increase the residential equalization by 100kWh per month. However, equalizing the cost of current power sources is only a stop-gap they said.

House Bill 294 is sponsored by Reps. Bryce Edgmon D-Dillingham, Bob Herron D-Bethel, Neal Foster D-Nome and Cathy Munoz R-Juneau. It was referred to House Energy and Finance Committees. It was heard and received substitutes by the House Energy Committee, which passed the bill without an objection on March 20. Its next referred committee is House Finance.

The cost equalization program currently reduces the cost of the first 500 kilowatt-hours of electricity used by each residence each month, or an aggregate of 70kWh per community resident. The bill would increase the limit to 600kWh per residence and add eligibility for businesses. State and federal offices and facilities are not included.

Originally the bill increased the PCE to 700kWh. The change was made in the House Energy Committee.

During testimony at an energy committee meeting, Tuesday, Rachael Whitticom of Dillingham said energy costs impact businesses and customers in her community. Milk is $10 a gallon she said. Store owners have to run coolers and freezers and the cost trickles down to the consumer.

“One store that is paying between $30,000 and $40,000 a month just in their electricity bills to run their freezers and coolers,” Whitticom said.

An increase to the PCE, Whitticom said, “would significantly improve our ability to function out here.”

Chuck Wheeler testified that he’s used diesel to heat his home in Nome “since day one.” He echoed others when said the power cost equalization does not solve the problem of high energy prices.

“We need to get on an alternative fuel,” Wheeler said. “We need a Northern Energy Fund.”

President of Alaska Village Electric Cooperative, Meera Kohler, testified in support of the bill.

“It’s really quite significant,” Kohler said. Although it only raises residential use by 100kWh, it adds business energy costs for the first time.

The Alaska Energy Authority estimated the program would cost $34 million in fiscal year 2012, up $1.5 million from the previous year. Its endowment’s total invested assets were $729 million as of October. The program pays a “portion of approximately 29 percent of all kilowatts sold by the participating utilities,” according to AEA.

• Contact reporter Russell Stigall at 523-2276 or at russell.stigall@juneauempire.com.

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