Power lines. (Nathaniel Robertson/Flickr Creative Commons)
As arguments over the state budget continue in the legislature, residents of the Upper Lynn Canal may see a spike in their electric bills. That’s because state reimbursements for power costs in rural communities have been withheld.
At the end of every fiscal year, there is an automatic transfer of money from dozens of the state’s bank accounts into one big savings account.
The Alaska Legislature usually votes to put all of that money back into the accounts it came from. But this year, that didn’t happen. That has led to a freeze in Power Cost Equalization, or PCE reimbursements, which are used to offset rural energy costs.
At a Haines Borough Assembly meeting last week, Borough Manager Debra Schnabel explained Alaska Power and Telephone (AP&T) and Inside Passage Electric Cooperative (IPEC) rely on PCE reimbursements for their customers. So what does that mean for Haines residents?
“We’re all going to see higher electric bills because we have all been subsidized for a long while and have gotten used to a certain amount that we pay for our electricity, so right now conservation is even more important,” Schnabel said.
Darren Belisle is AP&T’s power manager for Haines and Skagway. He says local AP&T customers are reimbursed 1.7 cents per kilowatt hour through Power Cost Equalization. If that reimbursement disappears, most customers will pay an extra $8.65 a month.
But that’s only for residents living in Skagway and the Haines townsite. IPEC provides energy to Klukwan and Chilkat Valley residents living past mile 10 on the Haines Highway.
If PCE reimbursements are eliminated, those households would see a spike of between 100 and 169 dollars on their next energy bill, depending on how much power they use.
“The larger consumers, the impact will be much, much higher. And those are generally city buildings, any kind of public building.”
That’s IPEC general manager Jodi Mitchell. She says that public facilities like Klukwan’s ANS Hall and the Jilkaat Kwaan Heritage Center will see the highest rate increases.
For the month of July, IPEC has billed its customers without any increase to their rates, as if the PCE credits were still in place. But Mitchell doesn’t know how much longer IPEC will be able to absorb that cost.
“I can’t imagine that we would go much more than a couple of months without getting the reimbursements from the Power Cost Equalization funding.”
Haines Manager Debra Schnabel says that the borough will coordinate with the Alaska Municipal League to address the issue of Power Cost Equalization.
The state senate has passed a capital budget that would restore funding for the Power Cost Equalization program by drawing on the Constitutional Budget Reserve. The bill has been sent to the state house of representatives, but has not received enough votes to pass. House leaders plan to vote on the bill again later this month.
