Committee to work out differences on bill drawing from rural power fund

The state House and Senate are trying to work out their differences over a bill that would draw money from the Power Cost Equalization Endowment Fund.

The $900 million fund subsidizes the high cost of electricity in rural areas. Because the state government has a $4 billion deficit, some lawmakers have suggested drawing money from the fund to pay for other state costs.

Sen. Lyman Hoffman, D-Bethel, speaks in support of Senate Bill 196 on April 13 in this screenshot from the Gavel archive.
Sen. Lyman Hoffman, D-Bethel, speaks in support of Senate Bill 196 on April 13 in this screenshot from the Gavel archive.

Bethel Democratic Sen. Lyman Hoffman crafted a bill that would limit the draw from the PCE fund to years when the fund earnings are more than what’s needed for the power cost equalization program. This program costs about $40 million per year.

The Senate unanimously passed the measure, Senate Bill 196.

But the House made changes to the bill. These changes made it less likely that excess fund earnings would be redirected back into the fund.

Those changes concern Hoffman. When it was time for the Senate to decide Wednesday whether it would agree with the House’s changes, Hoffman spoke up.

“They changed the formula on how the excessive earnings will be distributed,” Hoffman said. “And I believe that that formula will potentially put the fund in jeopardy and want to go back and revisit the differences between what the Senate has done, which is a more sound approach to the fund.”

As a result, there will be a conference committee to rewrite the bill so that both houses can agree to it.

Hoffman will be the Senate chairman of the committee, which will also have Eagle River Republican Sen. Anna MacKinnon and Fairbanks Republican Sen. Click Bishop. The House members will be chairman Dillingham Democrat Bryce Edgmon, Eagle River Republican Dan Saddler and Fairbanks Democrat Scott Kawasaki.

The Legislature formed the conference committee on what was an otherwise quiet day in the Capitol.

Andrew Kitchenman

State Government Reporter, Alaska Public Media & KTOO

State government plays an outsized role in the life of Alaskans. As the state continues to go through the painful process of deciding what its priorities are, I bring Alaskans to the scene of a government in transition.

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