Rural power funds shrink in Senate

Posted: Thursday, April 27, 2000

Power Cost Equalization couldn't make it all the way over a Republican wall in the Senate on Wednesday.

Today, probably, it'll scale the wall after losing some fiscal weight.

Two bills that would set up an endowment to pay for the $15.7 million annual program, which subsidizes electric bills for rural residents, were approved on the Senate floor, but without a key funding source.

The Senate approved a sale of state hydroelectric projects to help pay for the power program, referred to as PCE, but a required three-quarters vote to move $100 million from a state savings account fell four votes shy. Sen. Jerry Mackie, a Craig Republican, called for reconsideration, which kept the door open for another vote soon.

Interest earnings on a $100 million endowment, which would come from the state's Constitutional Budget Reserve, would be about enough to pay for the program.

``PCE kind of half-passed,'' said Bob King, spokesman for Gov. Tony Knowles. ``They moved forward with parts of it, but the funding is integral.''

He said Knowles, a Democrat, stood by the administration's original proposal, which used dividends from a quasi-state agency to help cover PCE, along with setting up an endowment account.

The $100 million draw from savings was what made Sen. Loren Leman balk at the bill that enables a deal between the state and communities buying the Four Dam Pool, a collection of hydroelectric projects, for $73 million.

Knowles' proposal to the Legislature included a $20 million piece, which was paid for from the budget reserve.

Rep. Alan Austerman, a Kodiak Republican, pushed the House to make the transfer higher -- $100 million -- to keep PCE out of the annual budget debate.

He said at least $20 million was needed for the hydroelectric project agreement to fly.

``If under reconsideration they put $20 million in there, we're fine,'' Austerman said. ``If not, it's moot.''

Leman, an Anchorage Republican, said the Senate's GOP caucus has pretty much agreed that the $20 million draw is acceptable. It would ``probably'' get the 15 votes it needs in the Senate, he said.

``We've talked about it, but we haven't taken a vote,'' he said.

Unlike Austerman, Leman said PCE should face the same annual budget review as other state programs, to keep pressure on program managers to contain costs.

``That's the same thing we do with everything in the budget,'' he said.



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