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Alaska Legislature sends $ to residents AGIA reimbursement fund only gets $30M; highway projects, workforce development, not funded; DNR gets partial funds Kristen Nelson Petroleum News
The Alaska Legislature gaveled out Aug. 7 after this summer’s second special session, signing off on some of Gov. Sarah Palin’s appropriation requests, refusing others and adding some things the administration hadn’t requested.
The administration’s request was for $1.53 billion in energy rebates and Alaska Gasline Inducement Act-related funding; legislators approved $945.9 million.
The largest item approved was $744.6 million for a one-time resource rebate. The governor requested $800 million and the Senate cut that to $310.1 million, but the House’s $744.6 million was approved by both bodies, with $1,200 to be added to each 2008 permanent fund dividend check. The governor had wanted to send the energy rebate check in August to those qualified for this year’s PFD and add to the list those who had been in the state for six months — and aren’t yet qualified to receive a PFD check — and others who don’t apply for the PFD. Legislators objected to costs of administering the governor’s program, $10.7 million, compared to $1.9 million for the House version, and went with tacking $1,200 on to the PFD check, extracting a promise from the Department of Revenue that it would try to get the PFD distribution done early this year so that rural residents would have money for winter fuel needs.
The goal of the governor and legislators was to find a way to provide some short-term relief to Alaskans for the high cost of energy, which has benefitted the state treasury but hurt Alaskans, especially those in rural Alaska whose energy costs are already high.
AGIA implementation cut The largest single reduction in the governor’s request came when legislators declined to fund the entire $500 million in reimbursement under the AGIA license approved for TransCanada Alaska, but instead appropriated $30 million, telling the administration they wanted to look at costs a year at a time. The House approved $50 million, but the Senate’s $30 million number was in the final bill.
The Legislature approved the AGIA license, but not the immediate effective date, so the license becomes effective only 90 days after the bill is signed by the governor. Any work TransCanada does prior to the effective date of the license is not reimbursable.
The governor also requested $15 million for AGIA implementation by the Department of Natural Resources; the House reduced that to $5.5 million. The Senate zeroed out this amount, but the $5.5 million in the House bill was approved.
The governor requested $25 million for work on an in-state pipeline segment by the Alaska Natural Gas Development Authority. The House approved that appropriation, but the Senate dropped it and it was not in the final bill.
Some $130 million was dropped from the administration request for infrastructure work to facilitate gas pipeline construction: $75.4 million in Dalton Highway work; $31 million in site development and corridor surveys; and $23.5 million for the Haines Highway. The House kept the first two items, reducing the amounts; the Senate zeroed out the appropriation to the Department of Transportation and Public Facilities.
Both bodies zeroed out a $42.7 million request for workforce development for the gas pipeline.
What was added? The administration requested $9 million for power cost equalization — money provided to rural areas to lower the high cost of electricity. The House kept that amount; the Senate increased it to $107 million; the final bill contained $23 million. PCE currently pays power generation costs up to 57 cents per kilowatt hour; that limit was raised to $1 per kilowatt hour.
The Alaska Housing Finance Corp. received an additional $60 million to fund home weatherization programs. This was not requested by the administration, but was added by both bodies: $50 million in the Senate and $60 million in the House; the House amount was in the final bill.
Legislators also added some $31 million to bulk loan programs and $50 million to a renewable energy fund.
Energy plan in works The administration is working on an energy plan for presentation to the next Legislature; items passed in the special session are intended to address short-term issues.
“Legislators provided Alaskans with a strong and diverse package of short-term energy assistance,” Palin said in an Aug. 7 statement. “We can build on this good work as we bring forward a much more comprehensive energy package for consideration in the next regular session.”
Senate Finance Co-Chair Bert Stedman, R-Sitka, called what legislators accomplished “some important groundwork for some long-term fixes” to the state’s energy issues. “Next year we’ll be ready to create an energy plan because of the hard work the Legislature put in this summer,” he said.
House Speaker John Harris, R-Valdez, said the resource rebate, “suspension of the motor fuel tax, additions to power cost equalization and the bulk fuel loan programs ... pretty well covered the waterfront.”
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