Dunleavy won’t appeal judge’s ruling that state must fund program for lower energy costs

Unalakleet on July 13, 2019, when an earlier threat of lost funds to the state’s Power Cost Equalization program meant residents and the city were bracing for power costs to go up. (Rashah McChesney/Alaska’s Energy Desk)

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.

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.

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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