Railbelt funds reinstated

Posted: Thursday, August 10, 2006

When Gov. Frank Murkowski signed Alaska’s capital budget earlier this year, it didn’t include $73.5 million he had originally promised to Railbelt energy suppliers, including the Homer Electric Association.

Murkowski later said his decision to veto of funds came after he realized the electric cooperatives didn’t intend to work together to solve Southcentral’s energy problems.

On Thursday, Murkowski moved to reinstate those funds — as long as the cooperatives work together.

“I vetoed the utility grants for one simple reason: the projects as proposed would not help solve the issues put forward by the Alaska Energy Task Force,” Murkowski said in a press release. “By working with AEA and addressing the future of the entire Railbelt, not just individual utilities or communities, we can finally move forward.”

According to Joe Gallagher, HEA’s spokesman, the amendment is a good sign. The proposal mirrors the original funding, which he said was earmarked for necessary HEA upgrades.

“From Homer Electric’s standpoint, we’re really happy with what the governor has proposed, and we hope it will move on to win legislative approval,” Gallagher said.

Gallagher also said HEA is ready to partner with its Railbelt partners as part of a study organization.

In an amendment to an Alaska House of Representatives bill, Murkowski proposed reinstating the funds on the condition that the AEA approve a plan for the formation of an organization to address Southcentral’s power needs.

Those issues include a dwindling energy supply, the energy needs of the area’s growing population and finding fuel alternatives to Cook Inlet natural gas.

“The grants will only go out if the utilities can show AEA that they have formed an organization to study ways to address the Railbelt energy issues,” Murkowski said.

HEA, which was set to receive $12.5 million for facilities upgrades before the Murkowski veto, has worked for several years with the Alaska Industrial Development and Export Authority to restart the Healy Clean Coal Plant. The reinstatement of funds would see the AIEDA receiving $12.5 million for that project.

Also in line to receive funds are Chugach, Matanuska and Copper Valley electric associations, Anchorage Municipal Light and Power and Seward Electric System.

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