Judge rules in favor of Alaska Federation of Natives to keep fund lowering power costs

A row of homes in evening light.
The sun sits low in the sky on July 13, 2019 in Unalakleet. (Rashah McChesney/Alaska’s Energy Desk)

An Anchorage Superior Court judge ruled Wednesday in favor of the Alaska Federation of Natives and others, and against Gov. Mike Dunleavy, to keep funding for the program that lowers the cost of electricity in high-cost areas.

The ruling will keep more than $1 billion dollars in the Power Cost Equalization Endowment Fund. The fund pays for a program that lowers power bills. Supporters of the fund have said it’s a way for the state to treat rural areas more fairly compared with urban areas that have benefited from state-subsidized energy projects like dams. 

Dunleavy’s administration has argued that the fund’s existence depends on three quarters of both chambers of the Legislature agreeing to maintain it each year. The vote came up three votes short in the Senate and five votes short in the House this year. That means the administration planned to move the money into the Constitutional Budget Reserve. 

Some members of the Republican House minority caucus who voted no said they support the program, but believe it should be paid in the same way as other parts of the state budget. 

RELATED: Programs for lower electricity costs and scholarships still unfunded in state budget

AFN was among 18 organizations, city governments and power providers who sued to maintain the fund. Judge Josie Garton ruled quickly in the matter, since the Legislature would have had to decide whether to fund the program in the upcoming special session. 

A spokesperson for the state Department of Law said they’re reviewing the ruling. A call to an attorney for the plaintiffs wasn’t immediately returned. 

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Garton wrote in the order that the endowment fund is separate from the general fund, which is the account that pays for the state budget. She wrote that since the endowment fund is not in the general fund, it is not subject to a provision of the state constitution that requires unspent money to be swept into the Constitutional Budget Reserve each year.

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