Rural fuel costs on the rise

Bush families to pay much more than urban counterparts

Posted: Wednesday, June 25, 2008

ANCHORAGE - The poorest families in rural Alaska will be paying much more for power and heat in the coming year than their urban counterparts, according to university researchers.

Those in the most remote towns and villages are expected to spend more than 40 cents out of every dollar, while Anchorage's lowest-income households will spend about 4 cents from every dollar on energy bills.

The figures come from a University of Alaska Institute of Social and Economic Research report released earlier this month.

In the village of Nunapitchuk, about 20 miles from Bethel, one family is watching less TV and rationing video game time for the kids in hopes of shaving power bills.

"Everybody's trying to, you know, go on to public assistance or trying to conserve as much as they can," said James Angaiak, who earns $10 an hour, six hours a day as a land planner for the city.

The report does not factor in gasoline prices or water and sewer bills. It also can't predict how much people are scaling back their heat and power usage in the face of rising costs.

But researchers say it shows what people must spend on household energy costs depending on where they live and how much they earn.

One reason energy is more expensive in rural Alaska is that most people use diesel fuel to heat their homes, while the majority of Anchorage families use natural gas.

ISER estimates that the median annual cost of power and heating costs for an Anchorage family is about $2,400, compared to about $4,100 for midsize towns and cities and $6,600 for remote rural villages.

Gov. Sarah Palin has proposed giving $1,200 to every Alaskan to cover the costs.

Sen. Lyman Hoffman, D-Bethel, says giving more to people who are hit the hardest makes the most sense.

"We give cost of living (pay) to state employees because they live in a higher cost area. And we give differentials for schools - so I think there is an argument that if we are going to address the high energy costs, we should also take that into consideration," he said.

But Rep. Kevin Meyer, R-Anchorage, said that debate would only open old wounds by pitting urban and rural Alaskans against each other.

"I think the argument's going to come up that people live in rural Alaska by choice," he said.

The governor proposed a flat payout plan - rather than payments based on people's individual needs - because there are already other programs that benefit low-income or rural Alaskans, said Palin spokeswoman Sharon Leighow.

She said Palin is considering offering grants to power utilities to lower bills, and that the governor is willing to "consider all options" when it comes to energy assistance legislation.

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