Two Fairbanks area lawmakers say they’re concerned over the inclusion of the state Power Cost Equalization fund in the annual “sweep” of state dollars back into the constitutional budget reserve at the beginning of each fiscal year.
Gov. Mike Dunleavy’s budget director, Donna Arduin, sent a letter to legislative finance co-chairs Friday confirming that the funding for the Alaska Energy Authority’s Power Cost Equalization program has also been included in the sweep.
This program was specifically designed to provide financial assistance to rural communities in an effort to offset skyrocketing energy costs in areas of the state where the kilowatt-hour charge for electricity can be three to five times higher than the charge in more urban areas of the state.
Healy Republican Rep. Dave Talerico and Fairbanks Republican Sen. Click Bishop both represent a number of rural communities in their expansive districts.
“I do have tremendous concerns about it,” Bishop told the Daily News-Miner on Sunday. “I mean, I have a lot of rural communities from the Canadian border all the way up to the Arctic Circle. It’s serious.”
Bishop is hopeful though that the Legislature will recognize the importance of this program, and many others, and find a way to restore the funding.
“I think at the end of the day we’ll get it fixed. I think at the end of the day cooler heads will prevail,” he said.
But until it’s resolved, Bishop said his rural communities and many others could see immediate effects.
“I don’t know how much reserves the power companies have. I haven’t reached out to several of our providers yet,” he said. “I’ll be reaching out if things don’t look like they’ll be coming together soon.”
In years past, not all of the state’s many program accounts have been subject to an end-of-the-year sweep. Last year, the Legislative Finance Division listed 31 savings accounts eligible to be swept. The Higher Education Investment Fund was not on the list. This year, the Dunleavy administration increased that list to 53 accounts.
Bishop noted there could be a challenge of the governor’s sweep altogether given that the Dunleavy administration included more than 20 additional funds that typically are left unscathed.
“There are some that think it’s not a legitimate sweep by the governor. Because the way the fund was set years ago, that money is in the Alaska Energy Authority and it’s always been an unspoken rule that it’s been hands off,” Bishop said. “I’ve heard conversations that there could be a challenge to that if we don’t get it reversed.”
Talerico told the Daily News-Miner in a message that he also has concerns over many of his constituent communities that stand to be hurt by the sweep.
“That is something I certainly have concerns with,” Talerico said Monday. “I would hope that as we work our way to a compromise that will be able to figure that out. That’s definitely something I’m concerned about, along with the scholarship funds.”
The District 6 representative noted that if the funding is not able to be reinstated through a possible reverse sweep provision, he feels like there could and should be other options to restore some or all of the funding.
“There’s also the potential to put a direct line item from the general fund,” Talerico said. “There are quite a few communities and districts who qualify for power cost equalization so I’m sure as we talk about compromise that that comes up. I would certainly be supportive of making sure that we do something about addressing that and ensuring there’s funding.”
Approximately 83,400 people live in 194 communities that participated in the Power Cost Equalization program in Fiscal 2018, according to statistics provided by the Alaska Energy Authority.
Contact staff writer Erin McGroarty at 459-7544. Follow her on Twitter: @FDNMPolitics.