With Power Cost Equalization program unfunded, electric bills could double in Y-K Delta

Generators at the Bethel power plant in 2016. (courtesy of Lenny Welch/AVEC)

This year’s state budget, which went into effect July 1, does not include funding for Power Cost Equalization — a program that lowers the cost of electricity in rural Alaska to make it comparable to more urban areas like Anchorage, Fairbanks and Juneau.

So what does that mean for rural Alaska residents’ next utility bill?

Bill Stamm, chief executive of the Alaska Village Electric Cooperative, said without Power Cost Equalization credits, the cost of electricity will shoot up.

“It’s probably going to be the difference of about $100 a month for those accounts on average. It’s going to be a substantial jump,” he said.

The Alaska Village Electric Cooperative delivers electricity to 58 communities in rural Alaska, 20 of which are in the Yukon-Kuskokwim Delta. All of them rely on Power Cost Equalization, or PCE, said Stamm.

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To break it down further: Stamm said the cooperative’s customers in Y-K Delta villages could expect their electricity bills to double, while bills in Bethel would go up by about one-fourth. That’s because fuel prices in Bethel are cheaper than in the villages.

Stamm said that higher electricity costs have a trickle down effect on other utilities too. Water plants and sewage treatment centers use large amounts of energy to operate, he said.

“That is going to put a huge pinch on community facilities that are anticipating a much lower electrical cost to keep their water and sewer running,” he said. “Those systems might start getting shut down fairly quickly if they realize they can’t afford to pay the electrical bill.”

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Stamm could not definitively say whether customers’ electricity bills for July would reflect the higher prices without PCE credits. He said the cooperative’s billing system is not set up to charge customers without PCE credits, but the company is currently working on making that change.

“Whether we’ll be able to accomplish that by the time we would typically send out our July billing in early August is in question,” Stamm said.

Stamm’s advice for his customers: Prepare for the worst.

“Brace yourself,” he said. “Rates can be going up. Don’t count on PCE being available until the Legislature acts.”

The next legislative special session is scheduled to begin on Aug. 2. Stamm said that if state legislators vote to fund PCE later in the year, the cooperative would reimburse its customers for previous months of PCE credit.

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