House skeptical of Senate plan for subsidies

House's $1,200 proposal at odds with $500 rebate

Posted: Wednesday, August 06, 2008

The Alaska House of Representatives on Tuesday moved closer to a showdown with the Senate over how energy relief should be delivered to Alaskans.

The worst-case scenario, say some legislators, is that there might be no energy relief at all.

"It's quite obvious to me that we are a long way apart," said Rep. Kevin Meyer, R-Anchorage.

Rep. Harry Crawford, D-Anchorage, called the confrontation the House's Republican-controlled majority was heading toward with the Senate "kind of petulant."

Some legislators, including Rep. Mike Doogan, D-Anchorage, have been suggesting that a deadlocked Legislature might not be able to produce any energy bill at all.

"That might not be such a bad result," he said.

The Senate plan passed Monday offered more help for rural areas, but also provided a benefit to Southcentral Alaska. Anchorage, Mat-Su and Kenai communities, which already have cheap natural gas, would get a subsidy as well.

Also getting help statewide would be those who use heating oil, which would be capped at $3 a gallon for the first 850 gallons in each of the next two winters. For those who heat their homes primarily with electricity, a similar benefit would be offered.

"It adds up to a pretty good benefit, and most of the benefit was not taxed," Elton said of the Senate's plan.

As much as a third of any cash benefit will go to the federal government in income taxes, legislators said.

Rep. Bryce Edgmon, D-Dillingham, said he wholeheartedly supported the Senate's plan.

"I think it brings more benefits to people in rural areas who may not survive the winter," he said.

Meyer said the Senate's bill would take a new state bureaucracy to implement and said he didn't want to create any new programs.

The heating assistance in the Senate bill would cost an estimated $20 million to administer. Those with oil or electric heat would have to submit paperwork to a state agency to get their rebates, while natural gas users would have it automatically included in their bills.

The House plan rejects options to boost the Power Cost Equalization program and the Low Income Heating Assistance Program, which Meyer said might not have treated everyone fairly.

Meyer said that by giving people cash, they could decide for themselves how to spend it "rather than the government - us - trying to decide what's best."

Members of the House of Representatives questioned the Senate plan passed Monday that would hand out energy subsidies around the state.

The Legislature has just a few days until the midnight Thursday deadline in the special session called by Gov. Sarah Palin to provide energy relief to the state.

The Senate's plan calls for subsidies for oil, electric and natural gas heat, and also $500 checks to Alaskans who qualify for an Alaska Permanent Fund dividend check. The House is considering less energy relief, but larger checks, possibly $1,200 or more.

Rep. Mike Kelly, R-Fairbanks, didn't like most of the plans he heard, which he said would combine with a $2,000 permanent fund check to create a dependency on government in Alaska's citizens.

"I question whether handing them a check for $3,200 is building self-reliance and character," he said.

Sen. Lyman Hoffman, D-Bethel, said the two-year energy relief plan would give Alaskans time to develop new alternative and renewable energy sources, while also getting people through the upcoming winters.

"This will give us breathing room so we can address alternatives and solve the problem," Hoffman said.

If neither the House nor the Senate agrees to the other body's energy bill, there could be a conference committee appointed to try to reach an agreement. The 30-day special session ends midnight Thursday, however, leaving little time for negotiations.

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