Gavel (Courtesy photo)

Judge orders release of Power Cost Equalization funds

Superior court judge bars state from sweeping the nearly $1.2 billion PCE Fund.

A state court judge on Wednesday sided with a coalition that includes the Alaska Federation of Natives and electric cooperatives that sued Gov. Mike Dunleavy to force the release of money intended to help lower rural utility costs.

Superior Court Judge Josie Garton barred the state from sweeping the nearly $1.2 billion Power Cost Equalization Endowment Fund into a budget reserve account and ordered the distribution of program funds that had been appropriated by lawmakers but were also held up amid the dispute.

The Alaska Department of Law was reviewing the ruling.

Under the state constitution, money taken from the constitutional budget reserve is to be repaid. Dunleavy’s administration in 2019 found the Power Cost Equalization fund was among the pots of money subject to being swept into the reserve at the end of a fiscal year.

A legislative attorney has said the sweep happens automatically. Action to reverse it and return funds to their original accounts requires three-fourths support in each the House and Senate. Lawmakers have previously supported doing this, including in 2019.

This year, however, lawmakers failed to garner the required support.

The lawsuit said the administration took a more expansive view of accounts subject to being swept into the budget reserve than prior administrations.

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