The selection of communities to receive money under the governor's proposed $6.45 million small city energy assistance program seems arbitrary and potentially divisive, Sen. Gary Wilken said Monday.
The energy assistance money would be given to 125 communities in grants from $25,000 to $75,000 and is included in Gov. Frank Murkowski's fast-track supplemental budget bill. It would be paid from the general fund with surplus revenue from high oil prices.
Incorporated communities with up to 99 residents would receive $25,000, those between 100 and 600 residents would get $50,000 and those with up to 1,200 residents would receive $75,000.
The Senate Finance Committee on Monday heard from department representatives on their specific requests in the governor's bill, which covers unexpected expenses and some new programs, such as the energy assistance proposal.
That proposal touched a nerve with Wilken, the committee's Republican co-chairman from Fairbanks. Wilken said Fairbanks pays a 10 percent surcharge on goods coming from the Port of Anchorage, but is not included in the grant list.
"I find it arbitrary, and I find it a selective grant with no basis," he said. "This is probably my least favorite issue in this supplemental."
Sen. Bert Stedman, R-Sitka, said the title of the program refers to energy assistance, but the proposal is written so that communities would be able to use the funds as they wanted.
The committee asked for language to clarify that the money would be used only for energy costs.
Al Clough, Department of Community and Economic Development deputy commissioner, said small communities needed the money to offset the high cost of fuel and fuel delivery to rural Alaska.
Clough said if small communities do not have adequate fuel, public facilities would be at risk.
Afterward, Wilken said there will be more discussion on the proposal, including how those communities on the list were chosen.
"The question is, how did we get the list? What's the basis for the list?" he said. "What about the high price of energy in my community?"
Murkowski spokeswoman Becky Hultberg said larger communities are better able to deal with high fuel prices than small ones.
"This request is to address the disproportionate high cost of fuel in rural Alaska," Hultberg said. "Small communities do not have much flexibility when dealing with large increases such as we've seen with the price of fuel."
Murkowski's fast-track supplemental bill asks for $97 million from the state's general fund.
Murkowski also has a $44 million general fund "regular" supplemental bill the committee will take up, and a $694,900 request for the costs of the state Division of Elections.
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