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Concerns expressed about energy, PCE bills

House leaders say long-term fixes are the answer to power costs

Posted: February 21, 2012 - 1:02am

Some top leaders in the House of Representatives say they want to do more for villages and others struggling with high power costs, but they’re wary of increasing funds for the state’s Power Cost Equalization program.

That program helps subsidize a portion of electric costs in communities on diesel power, partially linking their rates to an average of rates in Anchorage, Fairbanks and Juneau.

PCE subsidizes the first 500 kilowatt-hours used per month, but only applies to residences and community facilities, not commercial enterprises.

Further, Fairbanks’ heavy reliance on burning oil for power means that city’s rates are somewhat reducing the benefit in the small communities.

Legislators are considering a variety of proposals for expanding help through PCE, as well as other one-time energy cost benefits to Alaskans.

House Speaker Mike Chenault, R-Nikiski, told reporters Monday he understood the need, but wasn’t sure that any of the proposals were the right way to go.

“I know that people need relief, but that’s one shot in the arm that may certainly get people through the next year, but you are going to still have the same problem the following year and the following year,” he said.

He said he’d prefer investments in permanent solutions, such as expansions of power grids or new power sources, to keep the issue from coming back year after year.

“Would it not be better to spend that money on long-term fixes, versus a one-time payout?” he asked.

He acknowledged he didn’t have any readily available solutions to propose.

“That’s easier said than done, given the size of our state and how people are spread out in smaller communities,” he said.

House Majority Leader Alan Austerman, R-Kodiak, said he had some worries about a program that would add businesses to those eligible for PCE subsidies.

“Does it drag the whole program down?” he asked, if residents would be getting less money because business or schools were getting some of the money allocated for PCE payments.

At a recent Native Issues Forum in Juneau, Jodi Mitchell, general manager of Inside Passage Electric Cooperative, said while the utility was working on long-term solutions too, high costs were driving businesses and economic opportunity out of villages.

IPEC provides power in Kake, Angoon and other isolated Southeast communities.

It’s possible a program could be crafted to help mom-and-pop stores but not other commercial enterprises, Austerman said. That could help with the high cost of living there, he said.

Schools definitely should not get PCE, he said.

That would both risk diluting help to residents and is already provided for by the Legislature elsewhere in the budget, he said.

Lots of people in the state are suffering high energy costs, and Chenault said the difficulty for the Legislature is how to provide help to those who need it the most.

“I know that diesel fuel in Kenai costs more than it does in Fairbanks,” he said. “I know that it costs less than it does in Bethel, but I know it’s more than it is in other areas of the state.”

• Contact reporter Pat Forgey at 523-2250 or at patrick.forgey@juneauempire.com.

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