Senate Bill 2002, signed into law on Thursday, refunded the Power Cost Equalization program that subsidizes Alaska rural energy costs for thousands of Alaskans. PCE funds were previously swept into the budget reserve.
Every year, money from certain program-specific state accounts is transferred, or “swept,” into the Constitutional Budget Reserve. Traditionally, the Legislature votes to reverse that sweep and return funds to those accounts. This year, however, the Legislature originally failed to get the three-fourths vote needed to authorize the reverse sweep, causing many social services and programs to be defunded, including the PCE program.
The potential loss of power cost equalization would have affected 95 rural Alaska communities and 83,510 people, according to data from an Alaska Energy Authority fact sheet updated April 2019.
Numerous villages in the Kodiak archipelago rely on the PCE program, including Ouzinkie, Karluk, Akhiok, and Old Harbor.
Despite the original loss of PCE funding, several communities received notices instructing them to continue submitting PCE information and that the Alaska Energy Authority staff “have been operating under directions to continue processing payments,” according to a letter sent to Ouzinkie from AEA Executive Director Curtis Thayer.
“We got the notice that the PCE was going to go through just before we sent out the July bills. It told us the PCE rate that was going to be for July, assuming (PCE) would get funded, so no one was actually impacted,” Ouzinkie Mayor Matthew Jones said.
Nonetheless, it was a big concern, and a loss of the program would have affected lower-income community members, the mayor said.
“There was a lot of concern for most of the people here that are low income. Their utility bill (would have) jumped by about 50 dollars a month. It would have been significant for most people,” Jones said.
The loss of PCE funds for Ouzinkie would have strained an already decreased budget from cuts to revenue sharing with the state over the last few years, making it more difficult to cover the village’s expenses, he said.
Rep. Louise Stutes, R-Kodiak, reiterated the importance of PCE for rural Alaskans, whose lack of road access makes transporting their fuel source difficult and leads to higher costs.
“It’s crucial to rural Alaska,” she told KDM on Monday. “Because urban Alaska, the road system, has the ability to have the railway to help them with their energy costs to move coal or whatever they need moved.”
A spokesperson for the Alaska Energy Authority reiterated the benefit of PCE to Alaskans.
“We’re pleased with the action of the legislature and Gov. Dunleavy because this achieves a favorable outcome for Alaskan’s,” said AEA’s External Affairs Officer Karsten Rodvik.