Legislators propose price gouging law

Critics skeptical new legislation could bring down Alaska's high gas prices

Posted: Wednesday, December 03, 2008

Some Alaska legislators say the state's high gas prices should be a crime, and they're proposing the state adopt a price-gouging law to make such prices illegal.

State Sen. Bill Wielechowski acknowledged that such rules were difficult to enforce, but said Alaska should try.

"It is hard to prove, but right now we have nothing, and we're getting gouged," he said.

Wielechowski said he's having legislation drafted to adopt price gouging rules like those already in place in 30 states and under consideration in a dozen more.

At the same time, Rep. Les Gara, D-Anchorage, and two newly elected representatives, Chris Tuck and Pete Petersen, also both Anchorage Democrats, are proposing similar legislation in the House.

The representatives' legislation would empower the Regulatory Commission of Alaska to set prices that are "just and reasonable," a power they already have for utilities.

Tesoro Alaska Inc., one of the state's two gasoline refiners, said the market is what sets gas prices, according to spokesman Kip Knudson.

"Gasoline is a commodity," he said. "We make it and when we're done making it we sell it at a price the market will accept."

The legislators say price gouging is happening now but acknowledged it was difficult to prove or even define.

Wielechowski called gouging "an unreasonable spike in prices," but said it was hard to explain what amounted to price gouging.

"At this point we haven't defined it," he acknowledged.

The Alaska Department of Law is conducting its own investigation of gas prices, and expects to report on its conclusions before the next legislative session begins in January.

Preliminary information produced for the Legislature recently cautions against trying to link gas prices elsewhere with prices in Alaska.

"The price of gasoline in the lower 48 is not a good indicator of what prices should be in Alaska," according to the Department of Law.

The investigation is focusing on explaining the slow price decline in Alaska, and trying to determine whether illegal conduct, such a price fixing, played a role.

Tesoro's Knudson said supply and demand are determining the price of gasoline.

"We maintain there are two manufacturers in the state, but there are lots of marketers," he said. "It's a very healthy and vibrant gasoline market."

Rep. Beth Kerttula, D-Juneau, and House Minority leader, said there was likely little Alaska could do to force gas prices down, but there was something the state could accomplish.

"I think the root problem is how do we get a decent price to the consumer," she said. "We can reduce the cost by bringing in alternative energy sources. We've got to turn to alternatives, and do it as fast as we can."

• Contact reporter Pat Forgey at 523-2250 or patrick.forgey@juneauempire.com.

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