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Senate agrees to take energy relief statewide

Inclusion of natural gas, electric heat and propane subsidies wins broad support

Posted: Tuesday, August 05, 2008

All Alaskans should get heating help, along with $500, whether they use oil, electricity or natural gas, under a bill passed by the Senate on Monday evening.

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Brian Wallace / The Associated Press
Brian Wallace / The Associated Press

For Juneau, the key parts of the bill are likely to be subsidies for heating oil and propane, as well as a power subsidy for those who have electric heat.

Under the Senate's plan, the state would pay the cost of heating fuel above $3 per gallon, up to 850 gallons for the winter.

The bill's goal is to help with a variety of energy costs, at a time when many of those costs are rising.

"So Alaskans can keep their homes warm this winter, and the next," said Sen. Hollis French, D-Anchorage.

The program covers two years, offering up to 850 gallons each winter. The other energy sources are based on the heating equivalent of that much fuel oil in propane, natural gas or electricity.

Homeowners who heat with oil or natural gas would not get an electric subsidy.

Anchorage, which already has some of the lowest heating bills in the state, will get a subsidy to ensure the bill's passage because that's where half the Legislature calls home, senators said.

"We needed the support of the population centers," said Sen. Bert Stedman, R-Sitka.

To get the bill passed, the subsidies had to be offered to more people, said Sen. Kim Elton, D-Juneau. He urged that electric be included as well.

Southeast's hydroelectric-powered utilities already have some of the lowest power costs in the state, and about a fifth of the homes in Sitka and Juneau use electricity as their primary heating source.

Sen. Con Bunde, R-Anchorage, voted against the bill. He said the subsidy would be difficult for the Legislature to take away in two years.

Stedman said the subsidy would end when oil prices drop. Prices above $120 a barrel are currently adding $1 billion to the state treasury every month, he said.

Juneau, he said, made it through its power crisis earlier this year and "did it without additional subsidy from the state," he said.

Juneau lost most of its hydroelectric power and had to operate backup generators for several weeks, but for a far shorter period than the three months first predicted.

The heating subsidy likely to cost hundreds of millions of dollars was not considered in committee, and was added on the floor with no debate. It now goes to the House of Representatives, which has until midnight Thursday to consider it.

The Legislature was called into a 30-day special session by the governor on July 7 with a mission of addressing energy relief for the state.

Elton said the total package is likely to cost close to the $1.2 billion proposed by Palin.

"The goal was the same amount of money. We just sliced the pie a bit differently," he said.

Palin had proposed payments of $1,200, to all Alaskans with six months of residency. The Senate plan mirrors Alaska Permanent Fund dividend eligibility.

Joining Bunde in voting no were Sen. Fred Dyson, R-Anchorage, and Senate President Lyda Green, R-Wasilla.

• Contact reporter Pat Forgey at 586-4816 or e-mail patrick.forgey@juneauempire.com.



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