In the 1990s the Juneau Assembly established a special fund called the Rainy Day Fund. The purpose at the time was to build up a reserve that could be used to cover unexpected financial emergencies.
Over the years it has been used on occasion to help fund important community needs, such as to prevent capital-move attempts. More recently, $1.4 million was used as bridge financing for unexpected construction costs associated with the new high school. The current balance of the fund exceeds $7 million and is expected to reach $10 million by 2010.
Initial estimates from Alaska Electric Light & Power Co. indicated that an additional $300,000 a day would be needed to buy diesel fuel. However, with conservation measures put into place community wide, the estimate may now be closer to $200,000 a day. By the time a new higher rate will go into effect, the community will have burned approximately $3 million worth of diesel fuel.
Recently, the Assembly considered a $3 million loan to amortize the higher payments over a 12-month period. In my opinion, if the loan is granted it should apply to the added fuel expense incurred during April.
This will allow the company sufficient funds to cover the added burden of fuel purchased during the period that the old rate was still in place. It will then enable the Regulatory Commission to set an adjustment rate that more closely addresses the community's actual consumption need of the additional $200,000 a day so that the impact on the consumer will be lessened.
Instead of the initial estimate of four to five times the old rate, we could hopefully expect a rate closer to two or three times. At that point, the Assembly could consider additional aid in the form of a Rainy Day Reserve appropriation to help further reduce the increased expense to the consumer.
This is a really tough time for people. I appreciate all of the hard work to find solutions.
Former city finance committee chairwoman