Lights out for rural Alaska as the PCE endowment faces endangerment

The Power Cost Equalization Endowment helps to alleviate the high cost of energy in rural Alaska. In 2018, $746,000 dollars were subsidized from residents’ bills between Aleknagik and Dillingham alone.

PCE was one of Gov. Mike Dunleavy’s 182 line-item vetoes. Dillingham and Aleknagik are among the 180 communities impacted by the legislature’s sweep of the Power Cost Equalization Endowment. CEO Bob Himschoot said residential members of Nushagak Cooperative are facing a significant increase to their bills.

“So if you’re a residential member, your first 500 kilowatt hours is subsidized at 19.7 cents,” he said. “In affect…that’s $100 a month.”

Most homes use between six and 800 kilowatts a month. The sweep of the PCE is the result of a stalemate in funding between the governor and the legislature. Himschoot said it’s unprecedented.

“There’s not been a situation like this since PCE was first developed as a program in 1985,” he said. “So it’s all uncharted waters.”

While electric bills will increase for the month of July, the PCE could still be saved.

Legislators are working to restore some of the line-item vetoes. House Speaker Bryce Edgmon is on the frontlines to restore the fund.

“But that PCE endowment fund, it’s among the many priorities that I’ve got on my plate right now,” he said. “That’s at the top in terms of getting that fund liquidated, getting that money recapitalized, keeping those benefits in place and keeping the endowment going forward in the (sic) perpetuity.”

Legislators are aiming to draw on some of the funds from the Constitutional Budget Reserve through Senate Bill 2002. The bill would restore not only the PCE, but also highway funding, student scholarships and other accounts.

To pass the bill, legislators need a three-quarters majority vote in the house and senate. The bill was approved 29-7 Monday, but fell one vote short of the majority. Four members of the House were absent for the vote. Edgmon says he is committed to holding another vote before August.

“You know if that money isn’t put into place, there will be no PCE payments for the upcoming year…upcoming winter and that will be a huge shock to most people in rural Alaska,” he said. “To me, it’s a legacy program that needs to stay in place for rural Alaska in itself, so…very instrumental at people being able to afford staying in smaller communities.”

Legislators are also voting on House Bill 2001 to fund a $1,600 Permanent Fund Dividend and, in turn, restore funds to other line-item vetoes. If legislators fail to pass either bill, the PCE could disappear. 

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