An Act relating to power cost equalization; and providing for an effective date

Prepared by: Senate Finance/Senator Torgerson
Updated: May 15, 1999

The importance of the power cost equalization program to areas of Alaska that are reliant upon diesel generated power is recognized and this bill is intended to extend the life of the program by restructuring some of the program's components.

This bill:

• Restructures the program by reducing the current 700 kWh to an "averaged" 350 kWh per month, similar to the recommendations of the Governor's Blue Ribbon Commission (GBRC); estimated full funding decrease of $3.7 million.
  
  
• Restructures the program so that the equalization rate applies only to residential customers, as opposed to the current residential and commercial structure; estimated full funding decrease of $2.7 million (also GBRC recommendation).
  
  
• Raises the current base or "floor" from 9.9 cents (9.5 plus 0.4 adjust) to 13.5 cents, estimated full funding decrease of $4.5 million.
  
  
• Adds language providing for potential fund sources for the program from: the rural electric capitalization fund (GBRC recommendations); the National Petroleum Reserve-Alaska, and the receipt of "gifts", such as the Association of Alaska Housing Authorities.
  
  
• Reduces the annual program expenses from some $18 million annually to $12 million annually.
  
  

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