May 16, 2008
Friday

Thursday Alaska Governor Sarah Palin unveiled a short-term energy plan to address the skyrocketing costs of energy in Alaska. The package includes two parts ­ returning surplus funds through a grant to all electric utilities to reduce ratepayer bills and an Energy Debit Card for the next 12 months.

"Alaskans are feeling the pinch of high energy costs," Governor Palin said. "The state treasury is swelling, while family checkbooks are evaporating. The right thing to do is to return surplus monies to the resource owners through energy relief. Instead of going to Washington, D.C. for relief, Alaskans should be independent enough to take care of this energy problem ourselves."

Since coming into office, the Palin Administration has been focused on long-term solutions to Alaska's energy crunch. In some of Alaska's communities, consumers are faced with the nation's highest energy costs. In 2007, a comprehensive energy supply inventory was initiated to identify alternatives to high-cost energy supplies.

Earlier this spring, Steve Haagenson was appointed as the State's Energy Coordinator. In his capacity as the Executive Director of the Alaska Energy Authority, he is developing a statewide plan to reduce costs, promote conservation and secure long-term supply solutions for each part of the state. Results of that work are expected by year-end 2008.

"For instance, in Bush Alaska, the best solutions to high diesel prices are to use less and find alternatives," Governor Palin said. "We cannot lose sight of the need for these long-term fixes, but as crude oil prices continue to set daily records, Alaska's families, communities and businesses cannot afford to wait."

Returning surplus funds through grants to electric utilities will result in a 60 percent reduction for all ratepayers. The benefit will flow to homeowners, renters, schools, governments and businesses. A review by the Department of Law has indicated that there should be no federal income tax consequence since the grants act to offset the revenue collected by the utilities themselves.

In addition, there will be conservation incentives for the utilities. For every 1 percent reduction in 2008 kilowatt hour sales from 2007 sales, the state will make a year-end contribution for capital energy projects to the utility.

The Energy Debit Card will go out to every qualifying Permanent Fund Dividend applicant. The benefit will be $100 per month per PFD recipient. The amount allocated for children's benefits will accrue to the card of the sponsor on their PFD application. Money not used on the card one month will carry over to the next month. It is expected that the amount available to individuals through the card will be considered income by the IRS.

The temporary Energy Debit Card can be used for purchases from Alaska energy vendors, such as heating oil distributors, natural gas utilities, electric utilities, gas stations and other retail fueling stations.

The value of this plan is approximately $1.2 billion. The grant to electric utilities is expected to be $475 million, while the Energy Debit Card totals are forecast to be $729 million. The Governor has proposed this energy relief plan for one year.

According to information provided to SitNews by David Martin, Assistant Ketchikan Public Utilities General Manager, the Governor's plan is still being reviewed by KPU management and they have no comment to make at this time on how this plan might affect KPU customers.

Source of News:

Office of the Governor
www.gov.state.ak.us

Ketchikan Public Utilities
http://www.city.ketchikan.ak.us/public_utilities/index.html

 

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