NPR-A: Who gets the money?

North Slope communities receive $28 million in grants; allow $12.3 million to slip through to state coffers to help fund shortfall in statewide Power Cost Equalization program

Steve Sutherlin

PNA Managing Editor

In part one of this story, which appeared in the August issue, PNA reported that federal law mandates the state of Alaska give its share of all royalties generated by oil and gas leasing in the National Petroleum Reserve-Alaska to the North Slope municipalities most impacted by the development of the reserve – specifically, Wainwright, Atqasuk, Barrow, North Slope Borough and Nuiqsut.

The money is paid out in grants requested by those communities. The state distribution formula is: one quarter goes to the Permanent Fund, one half of one percent goes to the public school trust fund and the balance goes to the general fund where the Legislature can appropriate part of all to the Power Cost Equalization program, which benefits most rural, or “Bush,” communities in Alaska.

In fiscal year 2000, the state of Alaska collected approximately $40.3 million from the federal government for its 50 percent share of NPR-A oil and gas royalties.

The North Slope Borough intentionally pulled enough qualified grant applications to allow approximately $12.3 million to slip through to the general fund because money was need to fill a shortfall in the Power Cost Equalization program, Marla Berg, a spokeswoman for the North Slope Borough, told PNA. The program provides subsidies to make energy affordable for approximately 100,000 Alaskans in 190 rural communities throughout the state. Berg was an aide to Sen. Al Adams when the deal was made.

As a result of the borough’s action, only about $28 million was paid out in grants to North Slope communities, releasing the remainder of the $40.3 million to flow into state coffers. $3.2 million went to the Permanent Fund, $65,000 went to public school trust find and $9.1 million was paid into the Power Cost Equalization program.

“A lot of residents in rural Alaska were in danger of losing their power subsidy,” Berg said, adding that it came at a time when many communities were already facing hardship, such as the disastrous low fish runs on the Yukon River.

“The borough was put in the uncomfortable position of choosing between the money or thinking of its rural neighbors,” she said. “The borough did the right thing.”

The total number of grants submitted to the Division of Community and Business Development, which administers the NPR-A grant program, was $71 million. According to Tena Young, grants administrator for the division, many of the requests did not meet program criteria, which are established by federal law.

In FY2001, she said, the entire $1.7 million received from the feds for NPR-A oil and gas royalties was used for community grants.