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Bill would help Alaskans with energy costs

Posted: February 18, 2012 - 11:49am

JUNEAU — Alaska residents would receive vouchers to help address high energy costs under a bill introduced Friday in the state Senate.

SB203 would provide every adult recipient of an Alaska Permanent Fund Dividend this fall with a voucher for 250 gallons of heating oil, an equivalent amount of natural gas, or 1,500 kilowatt-hours of electricity.

Alaskans who receive a voucher but don’t directly pay for heating oil, gas or electricity used in their homes can instead have a voucher sent to their landlord, or they can get $250.

The bill does not yet have a fiscal note detailing the cost. A $3.7 billion surplus has been projected between this year and next, and Sen. Joe Thomas, the bill’s primary sponsor, said a goal is to use about 9 cents of every surplus dollar — “mere pennies” of it — to provide relief.

“We in this body must take steps this session to help our constituents weather the energy crisis facing our communities,” Thomas, D-Fairbanks, said in a floor speech.

Alaska is rich in resources like oil and gas, but many residents pay astronomical prices to heat and light their homes and businesses, in large part because of the cost of sending fuel or electricity to outlying communities.

In the Fairbanks area alone, Thomas said, about $660 million is spent each year on energy costs, a figure that comes out to about $6,600 per man, woman and child. Combined electricity and heating bills in the region eat up nearly 30 percent of an average family’s income after taxes, he said, in spite of the fact that there’s an oil pipeline and refineries in the region.

For years, state leaders have been looking for ways to address high energy costs, and Alaska is currently pursuing several projects, like a massive dam, that officials say could help take the edge off, at least in the state’s most populous areas. The state has a program to help rural Alaskans with electricity prices, but it doesn’t address heating oil.

“Every Alaskan faces the high cost of energy. Every member of this body knows family and friends who have faced hard choices because of rising costs,” Thomas said. “Let’s demonstrate to every Alaskan that we can work together smartly, responsibly and creatively to address this growing problem. Let’s show that we can put aside regionalism, partisanship and any other distraction that keeps us from solving the greatest challenge facing far too many Alaska families.”

The bill calls to mind a 2008 effort, under then-Gov. Sarah Palin, in which Alaskans received a $1,200 rebate to help offset fuel prices. But it also seeks a longer-term solution and calls on the governor to evaluate other alternatives to provide energy assistance.

Rep. Lance Pruitt, R-Anchorage, and co-chair of the House Special Committee on Energy, hasn’t taken a position on the bill yet but said if lawmakers do something short-term, it should be coupled with a long-term fix.

Gov. Sean Parnell’s spokeswoman said his office hadn’t had a chance to review the bill but is focused on long-term solutions, including dam projects in different parts of the state.

At least nine senators, representing a mix of urban and rural areas, have signed onto the voucher bill. Sen. Donny Olson, D-Nome, is among them. 

Olson said energy costs are driving people from rural Alaska.

“If people can’t afford to live in rural Alaska, they will move to urban areas, assuming they stay in the state,” he said.

With the bitter cold this winter in parts of Alaska, he said there is an immediate need for the kind of relief the vouchers can provide while the state works on a long-range plan.

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JOAT 02/19/12 - 09:16 am
Do it

As almost all of that "surplus" comes from selling our public-owned energy resources to the production companies, it only makes sense that we the people should get back a portion of the "profits" from those sales. I especially like the idea of issuing an energy credit slip that is good only at your local oil or gas company. If you just hand out cash (like Sarah did), then the majority of that money is spent on flatscreens from China and trips to Hawaii. None of which helps our local economies. Credit slips keeps the money here by buying local energy products from local companies run by local workers. The best option of all.

That said, with all this "surplus" money that we're getting from energy resource sales, how is it that anyone can stand there with a straight face and tell us that we are not taxing the oil companies enough? It appears we are taxing them a bit too much.

spwright 02/19/12 - 10:52 am
13 $Billion$ Sun 2/19/12

In a previous article in the Clarion it was stated that Alaska has $13 Billion Dollars$ in it's Cash Reserve Fund & that fund is for real Emergencies. That does NOT involve the
Permanent Fund of $42 Billion Dollars$

Alaskan Residents paying $ 1,200.00 per month for Heating Oil IS A EMERGENCYfor Residents near Fairbanks & the Bush Villages.

Use that 13 Billion Dollars to build a Natural Gas PipeLine & we would still have Billions of Dollars remaining after the construction of a pipeline.

Or We could assign yet another Committee to Research that Idea, or We could Talk & Talk then Talk some more & when that's done We could Talk somemore. Keep Re-Electing the same People & they will Talk somemore.

Meanwhile Our Fellow Alaskans are tearing down buildings in their very own villages to provide firewood to Heat their Homes. To me THAT is a Emergency.

Build the damn Pipeline.

SPW "Airborne"

jlmh 02/20/12 - 12:52 am
Diluting the aid

Well I spend about 1/10 of that estimate for Fairbanks area households, and I qualify for a PFD. So this energy bill would help me with something I clearly don't need, just as much as it helps a Bush family spending $50 a night on fuel oil mid-winter. That doesn't sound like a useful bill at all. Instead of issuing vouchers to everyone, maybe they should target households that actually spend 30% of their income on energy, where it can actually make a difference. Whether that means selecting key geographic areas or using income-eligibility, legislators need to get this money where it's needed. I like the idea of a long-term solution like a pipeline, or maybe investing in infrastructure to generate electricity from alternative energy sources where it is economical. But I think this is enough of an emergency (in some areas) to justify direct vouchers as well.

JOAT 02/20/12 - 12:24 pm
Down with social engineering (e.g. Marxism)

I'm sick of this wealth redistribution culture that has infiltrated every thought of the majority. If you are spending $1500 a month for fuel oil in Fairbanks and can't afford that, then move somewhere that you can afford to live. Or build a woodstove. Do not sit there crying about it while waiting for the government to sweep in and save your lazy behind.

Likewise, if all Alaskans equally own the natural resources (per our Constitution), and we are selling those resources at a profit to the production or distribution companies, then all of the owners of the resource should split the profits equally. Do not try to pull this "Joe in the village" deserves more of the profits than "Mike in the city". That is the root of communism folks. Communism is a failed social model and needs to be eradicated. We all hold equal shares and hence we should all get equal royalties.

jlmh 02/21/12 - 11:40 am
Our portion of natural

Our portion of natural resource revenue is distributed to us in the form of the Permanent Fund dividends. The $3.7 billion surplus is at the discretion of the legislature. If they wanted to divvy it up and distribute it in cash, then sure, it should be split evenly among Alaskans. But they want to use it to mitigate the energy crisis facing much of Alaska. So the bill should be one that actually achieves that. A $250 voucher isn't going to make a difference to a household spending 30% of their income on heating oil. Meanwhile thousands of dollars would be scattered around the state to pay for energy that residents can already afford. It's a waste that doesn't achieve the goal.

A pipeline or power plants would provide a long-term solution, but only if they are economically feasible. If the state can't find a plan that costs less than it will save, then that would also be a waste of the funds. If vouchers are a cheaper way to address the problem, then that is what makes sense. A continual subsidy for residential energy is obviously not a solution, but it can be utilitarian if it merely tides over a community until fuel costs decline or new energy sources become available. Expecting residents to simply pack up and relocate is not necessarily desirable for our state. They would be leaving behind thousands of dollars in assets that cannot be transported or easily sold (such as homes, businesses, developed land). And where would thousands of displaced Alaskans, with little or no assets, go en masse to find reasonable energy prices AND jobs? They would become a social burden, needing not only energy assistance, but now homes and job placement services, etc. Presumably they at least have a source of income where they are now.

Eventually residents do relocate when life becomes unsustainable in a certain location, provided that a better one is accessible. But if the cost of relocation and rebuilding assets exceeds the cost of energy where they originally were, it doesn't make sense. The senate is focused on addressing this as a transitional problem as energy prices have hiked suddenly for many.

cbeard 02/22/12 - 04:09 pm

I agree the PFD is a lackluster program in general because it's essentially the state saying "We're uneducated doormats for big oil and can't manage ourselves to grow social prosperity across the state, we better bribe the constituents", but a voucher system for now isn't exactly a bad idea.

Where people make the mistake is believing that Alaska is nothing but a big chunk of land sitting on top of oil. The deposits are minimal at best and are in no way large enough to pad big oil's wallets AND put money back into the state. They are also so remote that for top companies production isn't even worth it, even if there were no taxes at all.

On top of that, let's face it, big companies don't hire Alaskans to top level positions for a myriad of reasons, one of which is because Alaskans "know too much" and are viewed as contrary to development, even if the people describe themselves are "pro-development". Just living in the state means you're an obstacle to big oil because they'd rather pretend nobody lives here so they could just get free license to destroy whatever they want. And despite the pushes for education, most Alaskans don't live by the standard work calendar and education standards and there will always be a lack of sufficiently educated Alaskans with normal work hours.

Alaska needs to do as much as it can to help people with heating and energy bills and in the mean time expand its industries beyond oil and fishing, because within 50 years both economies wont exist.

JOAT 02/23/12 - 03:45 pm
False depiction of "big oil"

You are completely incorrect about the big company hiring practices. I work for a big company that is owned and operated in Alaska and only hires Alaskans all the way up to the president of the company. As a specialty contractor out in the "big oil", I get to work with all sorts of "big oil" folks. All the way up to the top tiers of Alaskan-based management, these companies are Alaskans. They live here, work here, and play here. The really important part being that they get paid here and spend their money here.

It also seems like you're claiming that Alaska's education standards are low? And we don't have "normal work hours"? Where do you get off making such claims? Our education systems in Alaska are pretty dang good, especially given the geographic area that we are covering. We've got a great University and there are some great education programs for those desiring to go work for "big oil". The "normal work hours" in Alaska include 84-hour work weeks. We are not an office cubicle culture. If you want a 40-hour cubicle, move to LA or NYC to live with the cubicle people. People that want to live in Alaska want to do stuff outside. By working an 84-hour week, we get 168 hours to go play. Many work a 168-hour two weeks so we can have a full 336 hours of play. Some work even more to get even more consecutive free time.

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