Alaska editorial: Juneau's current electricity crisis merits state help

Posted: Thursday, May 22, 2008

No matter what Gov. Palin and her bureaucrats call it, Juneau is facing an economic disaster.

An avalanche knocked out the city's main power source. Backup electricity is available, but it costs roughly five times as much as the hydro power that was cut off by the avalanche.

While repairs are under way, Juneau's electricity will cost about 50 cents a kilowatt hour. Despite heroic conservation measures - electricity use has dropped by an astounding 30 percent - the higher cost inflicts a huge toll on family budgets and businesses.

Nonetheless, Gov. Palin's administration says Juneau's situation doesn't qualify as a "disaster" under state law. That seems like an unduly harsh and restrictive interpretation. There's no question, Juneau is suffering. While a disaster declaration doesn't automatically trigger state financial help, according to Juneau state Sen. Kim Elton, the declaration would help the city tap a variety of aid channels at the federal level.

Instead of shrugging off Juneau's woes, the Palin administration ought to get more creative about finding ways to help.

After all, there are other places in Alaska where electricity costs are excessively high under normal circumstances. And the state helps residents in those communities bear that high cost, through the Power Cost Equalization program. The program subsidizes most, but not all, of the difference between urban electricity costs and the drastically higher costs in remote parts of the state.

If the state can help residents in those areas cope with high electricity costs, the state can help Juneau too.

Juneau should be able to tap the Power Cost Equalization program during the time its electricity rates have spiked so high. To be fair to other communities who get electricity aid, the Legislature should cover Juneau's share of Power Cost Equalization by adding extra money to the program. Otherwise, helping Juneau would mean less money for Alaskans who live where there is no hope that electricity will ever go back to 11 cents a kilowatt hour.

Arranging this kind of aid for Juneau will take action by the Legislature. Fortunately, lawmakers are likely to meet later this summer to discuss statewide energy cost relief.

During that session, legislators may need to tweak the Power Cost Equalization program anyway. Juneau's electricity rates are part of the formula that's used to calculate how much aid rural electric consumers can get. As Juneau's rates go up, the baseline urban rate in the formula goes up, and the amount of aid to rural electric consumers goes down.

As lawmakers take care of that glitch, they should help Juneau with its painfully high electricity prices. Though that pain is temporary, the capital city is no less deserving of help than other Alaska communities that have to pay the same high price for electricity.



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