JUNEAU — Excess earnings from a fund set up to provide assistance to rural Alaskans faced with high electricity costs would go to the general fund for state expenses and a renewable energy program under a bill being considered in the Senate.
The bill, from Bethel Democratic Sen. Lyman Hoffman, would put 60 percent of any excess earnings from the Power Cost Equalization endowment fund toward the state general fund. Thirty percent would go toward a fund for renewable energy projects, while 10 percent would go into the Power Cost Equalization endowment fund.
In his written sponsor statement, Hoffman said the endowment fund was designed to fully fund the Power Cost Equalization program off of endowment earnings. The bill provides a way to use excess earnings for other things while protecting the principal of the fund, he said.
In fiscal years 2013 and 2014, the fund saw earnings of $111 million and $171 million, respectively, he said during a hearing Wednesday. Those were great investment years, said Emily Ford, a spokeswoman for the Alaska Energy Authority, which administers the Power Cost Equalization program. The payout to communities in recent years has been close to $40 million.
But through the first eight months of this fiscal year, the fund has experienced losses equating to $51.6 million, according to a fiscal analysis of the bill prepared by the authority. That’s more than the estimated program costs so there would be no funds available to distribute to the general fund and renewable energy fund this year, the analysis states. The fiscal year ends June 30.
Power Cost Equalization helps rural electric customers by paying part of their electricity costs, Alaska Energy Authority Sara Fisher-Goad wrote in an annual report. Electricity costs for customers in rural Alaska are generally three to five times higher than for customers in more urban areas, she wrote.
About 190 communities participate in the program, representing more than 81,000 Alaskans, Ford said.