December 02, 2008
Tuesday

Senator Bill Wielechowski (D-Anchorage) announced Monday that he will introduce legislation to make price gouging a crime in Alaska. And then today three Democrats announced they will file legislation to relieve Alaskans from paying the highest gas prices in the United States.

More than 30 states have price gouging laws, and legislatures in more than 12 states are considering adopting or strengthening them.

Wielechowski says his bill will focus on ensuring that essential energy supplies are affordable.

"In an energy rich state like Alaska, residents deserve to know they will be charged a fair and reasonable price for critical energy supplies, like gasoline to drive their cars," Wielechowski said.

In the past year, gasoline spiked to almost $5/gallon in Anchorage as well as in Ketchikan and more than $8/gallon in the Bush. Heating oil hit $9/gallon in some remote communities, and the price of natural gas continues to climb.

"The bottom line is it's not ok to gouge Alaskans on needed energy supplies," Wielechowski added.

The bill will apply when prices skyrocket without justification. Those found guilty can be charged a fine of not more than $25,000 and treble damages.

The bill will also stiffen penalties for anti-trust violations, where it can be proven that two or more suppliers colluded to inflate prices. Alaska's anti-trust penalties are currently woefully inadequate.

"We hope this bill will send a message that price gouging in Alaska will not be tolerated." Wielechowski said. "We're putting the golden rule into law for those who never learned it."

Anchorage Democrats Pete Petersen, Chris Tuck and Les Gara will introduce the House legislation. Petersen and Tuck are newly elected. A similar effort is being undertaken by members of the Alaska Senate. This bill is aimed to help ensure essential energy supplies are affordable to consumers, and to protect local Alaska economies. In Alaska the price of gas in urban areas approached $5 per gallon this fall, and is still roughly $1 per gallon higher than in many places in the Lower 48. The problem is worse in Rural Alaska, where prices have hit $9 per gallon in some places.

"Alaskans shouldn't be paying the highest prices in the nation," Petersen said. "This price gouging bill should help to restore our fuel prices to a reasonable level."

More than 30 states have price gouging laws to address high prices following hurricanes, and other unusual circumstances that have led to unfair consumer pricing.

"We need to make sure Alaskans can afford to heat their homes and commute to work," Tuck said. "When price gouging occurs, local economies suffer."

Evidence shows Alaska's two refiners are using their market position to overcharge gas retailers and distributors for finished fuel products, including gasoline. Knowing Alaska's only alternative is to ship gasoline and diesel up from the Lower 48, refiners are basing their pricing on that high cost, rather than upon the lower price their pay for the Alaska crude oil they process.

The sponsors intend to send the message that price gouging in Alaska isn't acceptable. For those refiners that don't hear this message, the legislation will allow the state to intervene to establish a "just and reasonable" price ­ under rules the state's Regulatory Commission of Alaska already enforces on other utilities.

"We hope the refiners will treat Alaska's businesses and citizens as their neighbors," Gara said. "If not, then we'll have a tool to prevent those who'd take excessive profits during difficult economic times."

Source of News:

Office of Senator Bill Wielechowski (D-Anchorage)
Office of Representative Les Gara (D-Anchorage)

 

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