Juneau looks at energy plan

Posted: Friday, July 25, 2008

As debate continues in the Senate over TransCanada's natural gas line application under the Alaska Gasline Inducement Act, state lawmakers in both houses of the Legislature are also discussing other special session bills, including a rebate program that would provide Alaska residents some monetary relief from the high cost of energy.

Senate Bill 4002 would create an Alaska resource rebate program within the Department of Revenue. Under its provisions, each eligible Alaskan would receive $1,200 late this year following an application period between Oct. 1 and Nov. 30.

A person would be eligible for a rebate if he or she were also eligible for a Permanent Fund Dividend check -- estimated at around 625,000 people.

Another provision would allow for payments under certain circumstances to individuals who may be ineligible for a PFD because they have not lived in Alaska long enough.

To be eligible under this provision, a person would have had to reside in Alaska for six months (April 1 to Oct. 1) and intend to make Alaska their permanent home.

There would be a separate application process for these residents.

Still other provisions would protect Alaskans enrolled in state and federal assistance programs from losing benefits because of the payments.

The House Community and Regional Affairs Committee replaced its duplicate of SB 4002 (HB 4002) with a substitute (CSHB 4002), which would forego creation of a separate rebate program and increase the size of the 2008 Permanent Fund Dividend check due out this fall by $1,200.

The substitute, sponsored by Rep. Kurt Olson, of Soldotna, however, does not yet include any provisions to protect those on assistance programs. Lawmakers on the House side said they would work to resolve that issue.

In either version, there would be no restrictions on how the money would be spent. Olson said Wednesday during the House Community and Regional Affairs Committee hearing that he was opposed to any provision that restricted how Alaskans chose to spend rebate money.

In an interview Thursday, Olson said he wouldn't guess how the Senate might approach his amendment, but that he had discussed it with the administration, which is not opposed.

"The whole intent was to bring it in line with an existing program (the PFD) that has been (legally) tested many times," he said. "It is a more efficient way to distribute the money."

The longer version, he and others suggested, could be a target of lawsuits not unlike the case that tied up the Alaska Permanent Fund dividend program for several years back in the early 1980s.

House and Senate Finance Committees each held hearings on versions of the bill on Thursday.

Lawmakers face numerous questions, including whether the state treasury would have the liquid funds necessary to make the dispersions later this year, given other, larger fiscal considerations.

Karen Rehfeld, of the Office of Management and Budget, told the Senate Finance Committee, that the office was committed to producing a long-range fiscal plan for consideration next year -- including salting away excess savings and tackling neglected capital needs.

But she also said the one-time payment under the resource rebate proposal would help Alaskans to meet their energy needs, even as the state works on ways to address the energy crisis long-term.

Another concern voiced by Senate committee lawmakers concerned the short, six-month time frame necessary for eligibility for those not eligible for a permanent fund dividend. Sen. Joe Thomas, D-Fairbanks, said someone who arrived in the spring and spent the summer and never paid a heating bill could become eligible under the bill.

Fairness, in general, was an issue of discussion. There are difficulties with the bills on that score. For instance, energy costs are widely different across the expanse of Alaska, yet the bill would give every resident the same amount regardless of where they lived.

Sen. Kim Elton, D-Juneau, said he was concerned about unintended consequences in Washington, D.C. He worried that senators and representatives in other states could see Alaska getting rich off the energy resources the rest of the nation was paying for.

"It could create resentment that could spill over to programs important to Alaska a potential backlash," Elton said.

Sen. Ten Stevens, however, recently said that Congress might feel just the opposite and appreciate that Alaska was moving to help its citizens rather than asking Congress for the money.

The Senate and House versions now refer to the proposed payments as "resource rebates" rather than as energy assistance, though many acknowledged that in the minds of the public, energy cost relief is what the bills are all about.

Another bill being considered in the special session is Senate Bill 4003 (and its companion HB 4003). It would make supplemental appropriations to the Alaska Energy Authority for the power cost equalization program. A separate measure, House Bill 4005, would amend the PCE program changing certain eligibility provisions, and repealing the exclusion from eligibility of certain power projects using hydroelectric facilities.

SB 4003 also would make special appropriations to the Department of Revenue and the Department of Health and Social Services to cover the Alaska resource rebate program, and make a special appropriation to the Department of Revenue for distribution to municipalities for what they would lose if the Legislature votes to suspend certain state motor fuel taxes.

Just such a suspension is the subject of House Bill 4004 and its Senate companion that are also being considered in the special session.

House Bill 4006 would authorize the Department of Health and Social Services to increase the size of payments made to eligible Alaskans under the federal low-income Heating and Energy Assistance Program (HEAP) created by Congress in 1981.

Hal Spence can be reached at hspence@ptialaska.net.

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