Alaskans to receive $1,200 in energy relief
Rural electric help added to checks to secure deal
The Alaska Legislature on Thursday passed a nearly $1 billion energy relief bill that will provide Alaskans eligible for a 2008 Alaska Permanent Fund dividend with an extra $1,200, along with an estimated $2,000 regular dividend.
To get the deal done - and even close to the end it looked like the Legislature might be headed for a train wreck - the House agreed to the Senate's support for electric subsidies for the hard-hit rural communities on expensive diesel.
The rebate checks will cost the state about $744 million, the bulk of the $945 total expense.
The Senate had earlier pushed for more energy relief and smaller checks.
Another part of the energy package passed Thursday included a one-year suspension of the state's motor fuel tax.
That tax suspension was supported strongly by Mat-Su legislators, many of whom have constituents with lengthy commutes.
It is not clear how much of that savings may be passed on to drivers, but legislators expressed confidence that free market pressures would make sure it would be passed on to consumers.
The bill includes requirements that the $40 million tax break be passed on, but some legislators were skeptical it would be.
"We hope the distributors will honor that and pass that along," said Karen Rehfeld, director of the Office of Management and Budget for Gov. Sarah Palin.
Rep. Mark Neuman, R-Big Lake, said the gas tax suspension would be appreciated by the 30,000 commuters out of the valley, and led him to support a bill about which he had concerns.
"I'm going to support it because it's got a reduction in taxes," he said.
A Senate bill passed earlier in the week provided for checks of $500, but it also provided hundreds of millions in heating assistance that would provide more help to rural Alaska, where prices are higher. It also included more money to subsidize rural electric utilities and expand the program to commercial enterprises.
Thursday, Rep. Kevin Meyer, R-Anchorage, returned to the House floor and proposed boosting Power Cost Equalization funding, something that had been sought by Juneau legislators and will help Inside Passage Electric Cooperative communities such as Hoonah.
Meyer said his amendment stemmed from "the recognition that some of our communities are in dire need of some help to get through the winter," Meyer said.
The PCE program is capped at 52.5 cents per kilowatt-hour, meaning that residents pay anything above that amount. The new cap will be $1 and will remain in place until June 30, giving the Legislature time to take a more thorough review of PCE.
The final bill did not include businesses, which have to pay the full cost of their electricity. That contributes to the high cost of living in villages, said Jodi Mitchell, general manager of Inside Passage Electric Cooperative.
The cost of expanding PCE is estimated at about $24 million.
The Senate version of the bill's heating assistance capped fuel oil bills at $3 a gallon for the first 150 gallons. That's something that Rep. Andrea Doll, D-Juneau, said was a top priority for her, and she'd still like to see that made available.
The bill the House passed Wednesday without PCE dismayed House Democratic Leader Beth Kerttula, D-Juneau, but she was one of several critics of the plan who voted for it anyway.
A boost to the Low Income Heating Assistance Program sought by Sen. Lyman Hoffman, D-Bethel, was not approved.
Kerttula said the bill would provide needed help, but was too expensive and did not target the help to those most in need.
"This does both too little and too much," she said.
Kerttula said she hoped a compromise that would improve the bill could be reached with the Senate.
Rep. Wes Keller, R-Wasilla, said providing people money that came from public resources gave them the responsibility to spend it on energy relief or anything else.
"We trust you to spend this money as you see fit," he said.
Rep. Scott Kawasaki, D-Fairbanks, lamented that a session that was called to address energy relief, switched to a cash handout program.
"I thought we were here to address the high cost of energy," he said. "This falls incredibly short of what we intended to do."
Kawasaki voted for the payments.
At the last minute, the accompanying appropriations bill suddenly became controversial, and the Senate made several cuts. Among those were $25 million to help the Alaska Natural Gas Development Authority begin planning for in-state gas.
A Senate cut of $52 million from a House proposal to rebuild the Dalton Highway also angered some House members.
"The Dalton is one of the bloodlines of this state," said Rep. Mike Chenault, R-Nikiski. "It leads right to our heart, which is Prudhoe Bay."
Sen. Fred Dyson, R-Eagle River, concluded the 25th Alaska Legislature by denouncing the process. He was in a five-member Republican minority that that was often steamrolled by the 15-member majority coalition.
The Senate at one time used to have honest debate, he said, during which minds were changed on the floor instead of being pledged in advance.
• Contact reporter Pat Forgey at 586-4816 or patrick.forgey@juneauempire.com.