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Power Costs Could Rise in Western AK as Legislature Determines Future of PCE

A close-up view of a utility meter on the side of a Nome building.

Funding for the Power Cost Equalization Endowment, or PCE, was zeroed-out by Governor Mike Dunleavy’s line item vetoes earlier this summer. Currently, the Legislature is considering two bills that would pass a capital budget, set the Permanent Fund Dividend, and include appropriating money for PCE. But if that fails, then rural residents across Western Alaska will see increases on their electric bills.

The PCE’s purpose is to make statewide power costs equal to the average costs in Anchorage, Fairbanks, and Juneau. More than $26 million from the endowment was transferred to 194 eligible utility companies across the state last fiscal year (FY ’18), which included Nome.

Ken Morton, the assistant manager for Nome Joint Utility System (NJUS), says if the Legislature doesn’t find a way to fund PCE now, then Nome residents will be impacted.

“So PCE subsidizes the first 500 kilowatt-hours. Most families use about 600 kilowatt-hours. The subsidy and 500 kilowatt-hours is about $65 to the household… every household.”

Morton says without PCE, NJUS’s rates remain the same, but that extra $65 average would have to be paid through the local residents’ utility bills each month instead.

According to language in House Bill 2001, the Legislature plans to appropriate money from the general fund and the Statutory Budget Reserve to pay for Permanent Fund Dividends, PCE, as well as several rural programs. 

In order to approve the bill, as well as the capital budget, the Alaska House will need three-quarters of the chamber to vote in favor of it. So far this week, Representatives have failed twice to garner the necessary votes.

Regardless, Morton says he is relatively confident that the PCE fund will remain intact.

“I’m pretty optimistic something is going to happen, but yeah, I wouldn’t go to the bank with my level of optimism…”

According to Morton, NJUS plans on notifying Nome residents of final utility costs before this month’s bills go out in the mail next week.

Image at top: A utility meter in Nome. Photo: Matthew F. Smith, KNOM file.

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