Gov. Mike Dunleavy announced Thursday that his administration will not appeal a ruling earlier this week that the state must maintain a more than $1 billion endowment to lower electricity costs in high-cost areas.
Dunleavy said in a statement that the ruling provided clarity and that the Power Cost Equalization program provides an essential service.
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His administration previously took the position that the money in the Power Cost Equalization Endowment Fund could only stay there if three-quarters of both legislative chambers voted in favor of it. Since that failed to happen this year, the administration planned to sweep money in the fund into the Constitutional Budget Reserve.
The Alaska Federation of Natives and others sued Dunleavy to stop that from happening. And Superior Court Judge Josie Garton ruled in favor of the plaintiffs on Wednesday.
Dunleavy said the court did not address an important political challenge that "at any point, the PCE fund can be raided by the Legislature with a simple majority vote.”
Dunleavy has proposed requiring funding for the program as part of an amendment to the state constitution that would also enshrine Permanent Fund dividends in the constitution. Dunleavy said the possibility that the PCE could be raided in the future is a reason why the Legislature should pass his proposed amendment this year.