Legislature looks to draw funds from Power Cost Equalization 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.

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Senator Lyman Hoffman. (Photo by Skip Gray/Gavel Alaska)
Senator Lyman Hoffman. Hoffman drafted the bill that would limit the ways that money from the PCE is drawn from.(Photo by Skip Gray/Gavel Alaska)

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.

Bethel Democratic Senator 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 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,” Hoffman said.

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 Senator Anna MacKinnon and Fairbanks Republican Senator 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.