PFD checks to be distributed early

Posted: Monday, August 18, 2008

Not only will Alaska Permanent Fund dividend checks be more valuable than ever, they'll also go out earlier than they ever have, the governor's office said Monday.

Residents could see their checks - fattened by a one-time payment to offset energy costs - as soon as next month, though a date for the first deposit has not been established. The first checks were to go out Oct. 2.

Nearly every man, woman and child received $1,654 each in last year's distribution. This year's payout is expected to be higher, but it hasn't been calculated yet.

But added to this year's check will be an extra $1,200 from the state's oil-rich treasury to help offset high energy prices, a factor driving the early distribution.

Gov. Sarah Palin wants the state's residents to have their checks as early as possible with the first winterlike temperatures and snowfall just a month away in some areas.

"The idea is to get energy relief money as well as the permanent fund dividend before winter hits, so people have their money to offset the astronomical costs we are seeing for energy," said Bill McAllister, Palin's spokesman.

Two weeks ago, the Alaska Legislature passed an energy relief package that includes the payout, the suspension of a motor fuel tax and a temporary rewrite of a formula for subsidizing electricity in rural areas.

Residents in many of the state's villages are paying seven to 10 times the national average for electricity.

Some villages are paying almost three times the national average for a gallon of unleaded gasoline, currently at $3.74 a gallon according to the Energy Department. The state's largest city also isn't exempt. Last week, Anchorage had the highest gas prices in the nation, $4.37 a gallon, among the 7,000 gas stations surveyed, according to a Lundberg Survey.

Despite the cost disparity, consensus among lawmakers for help was not easily achieved. The energy relief bill generated tremendous debate before being passed with about two hours left in the special legislative session. Some lawmakers worried that this would be seen by some residents as an entitlement, one the state may not be able to afford ever again if oil prices drop.

The bill is en route to the governor's office for her signature.

The first round of dividend checks typically go to those who applied online in January and requested payment to be directly deposited into their accounts.

Those filing for the dividend in February or March and requesting direct deposit would normally be in the second round of payments. Those requesting paper checks would be paid in the final round.

It wasn't immediately known if the early payout would alter that traditional schedule.

The state established the Alaska Permanent Fund in 1976 after North Slope oil was discovered. Dividends have been paid since 1982, ranging from $331 to a record high of $1,963 in 2000.

Dividend totals are not directly tied to the fund's total value or robust oil prices. Oil prices, which were nearly $113 a barrel Monday, can boost the fund's principal, but the money must be invested. Payouts then get calculated on a five-year average of investment income.

The fund's stock investments include high-profile companies such as Pepsico Inc., Microsoft Corp. and Apple Inc., along with North Slope oil producers Exxon Mobil Corp., ConocoPhillips and BP.

More than $15.2 billion has been distributed to eligible residents since the dividend program began.

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