Governor Unveils Plan to Return
Surplus to Resource Owners
long-term solutions remain key focus
May 16, 2008
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
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
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.
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