Rural residents face reduced power cost subsidy

Posted: Sunday, February 24, 2002

BETHEL (AP) -- Tracy Rischer spent several nights last winter huddled up in blankets in a dark home because her electricity had been cut off.

The 59-year-old woman lives in Quinhagak, a coastal community 75 miles south of Bethel. She's one of the rural residents throughout Alaska who has difficulty managing the high cost of electricity every month. And this month her bills may be even higher because state Power Cost Equalization funds have been reduced again, by 20 percent.

PCE was created in the early 1980s by legislators to bridge the gap between the costs of electricity between urban residents and many rural residents who pay two to three times more, said Meera Kohler, chief executive officer of Alaska Village Electric Cooperative. The program provides rural households with a subsidy on up to 500 kilowatt-hours of their monthly electricity bill.

But PCE has not been a cure-all. Many old homes in villages such as Atmautluak, 20 miles northwest of Bethel, with a population of about 300, have poor insulation and use more than double the kilowatt-hours of electricity subsidized during winter months.

The money taken off monthly bills really helps residents, said Billy Gilman, plant manager at the Atmautluak Utility Corp. The average household was subsidized with about $60 for December bills.

''Personally, it helps me a lot on my electric bill. It goes way down,'' Gilman said. ''Especially when it is cold out and we use lots of fuel.''

The amount of the subsidy has been changed several times since the program started. In July it was reduced to 92 percent of the full amount calculated for the year's costs.

PCE is being reduced or prorated again, to 80 percent of the full amount, because the Legislature appropriated less money for the program than it will cost to run this year in its budget, according to Bob Poe, executive director of the Alaska Energy Authority. If the program operated under full capacity, it would cost $17.2 million. The state designated just over $15 million this year.

''Under law, by Legislature passed in 1999, we are required to prorate, when we know the costs of the program will be greater than the amount designated,'' Poe said.

The loss could cause financial strain to many rural families.

''It's pretty hard for some people to meet their electric bills already, especially those that are unemployed, because there are not enough jobs in the villages,'' Gilman said. ''That much money is hard to come by in a month.''

For some, another reduction is more evidence of the political climate underlying the program.

''I would say it is aggravating more than crippling for most,'' Kohler said. ''It seems we just keep getting chipped away at.''

Though many urban Alaskans argue the program is a giveaway to rural Alaskans, rural Alaskans contend that the program is fair because they pay two to three times more for electricity.

In Bethel, the power rate is 22 cents per kilowatt-hour. In some of the villages on the Yukon-Kuskokwim Delta, residents pay as much as 60 cents per kilowatt-hour.

''Even with PCE rural residents wind up paying twice what I pay in Anchorage,'' Poe said.

The Legislature may adopt a supplemental budget that could add PCE money. Kohler said rural residents should voice their concern to legislators.



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