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Senate votes to increase PCE payments

In vote for increase, lawmakers call for power generation

The Alaska State Senate passed a bill Tuesday to increase payments for the Power Cost Equalization program which subsidizes electricity costs in rural Alaska.

Speaking in support of the increase, Sen. Lyman Hoffman, D-Bethel, said the cost of energy in rural Alaska was 40% higher than in urban Alaska which has received billions of dollars in infrastructure spending over the years.

“It is nowhere equal, it’s an assistance program more than an equalization,” Hoffman said, calling the proposed increase, “a fair and modest request.”

The bill increases the amount of energy covered by the PCE program from 500 kilowatt-hours to 750. According to the bill’s fiscal note, the increase will cost the state roughly $15.7 annually. The state has an endowment fund for the program worth roughly $1.1 billion, which also pays community assistance grants.

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Senators voted 18-1 in favor of the bill, with only Sen. Lora Reinbold, R-Eagle River, voting against the bill.

Speaking on the floor, Reinbold said she wasn’t against the program, but was concerned at the continued growth of the program and government spending in general. Reinbold also said that when the PCE program was created, the was also a commitment to build hydroelectric projects on the Susitna River which never materialized.

“If PCE continues to grow it may become unsustainable,” Reinbold said. “We should be encouraging conservation and decrease energy consumption, not encouraging increased energy consumption.”

Sen. Mike Shower, R-Wasilla, was also critical of the growth of government spending and said on the floor the state needed to produce more energy. Shower voted in favor of the bill citing the increased cost of energy generally.

Senators also passed a bill Tuesday exempting nuclear microreactors from a state law requiring the Legislature to approve permits for nuclear reactors. The bill was passed in an effort to attract Department of Defense-funded programs aimed at developing the technology.

• Contact reporter Peter Segall at psegall@juneauempire.com. Follow him on Twitter at @SegallJnuEmpire.

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