Power Cost Equalization (PCE) in Alaska

Learn about what the Power Cost Equalization program is, who benefits from the PCE program, what is happening with the PCE program this year (hint: these changes affect rural Alaska significantly), how to get involved and where to find more info on the PCE program. Below are photos of the power lines taken in Beaver, Alaska. Mahsì to Rochelle Adams for these photos.

First: What is the Power Cost Equalization program?

The Power Cost Equalization program, or PCE, is a program that was established by the legislature in 1984 to offset the high cost of electricity in rural communities. Rural electricity was tied to diesel, which is costly to transport, additionally, there isn’t as large of an economic base in the 200 rural communities for infrastructure investments to be cost-effective. Urban areas received billions of dollars in capital projects like hydroelectric dams and subsidies like in Cook Inlet – PCE was created to create that same sort of investment in rural areas where the state couldn’t do the same sort of projects. The legislature also created a separate fund for PCE – no state general fund dollars go towards this program – it was intended to be self-administering in perpetuity. It only costs about 30 million a year. It would take hundreds of years for PCE to equate to the money invested in other projects in urban areas.

Second: Who benefits from the Power Cost Equalization program?

PCE has benefited 80,000 – 90,000 residents in approximately 200 communities all the way from Tok to Teller to Tuntutuliak. In addition to helping individuals offset their high electricity bills, PCE also offsets the high cost of electricity for certain community facilities, like washeterias and community buildings. Schools and commercial customers are excluded from PCE credits, and there are additional parameters surrounding what community facilities are eligible. Rates may also go up for water and sewer service if the PCE program were non existent.

Third: What was/is happening to PCE this year?

Prior to 2019, the PCE program was automatically paid from the fund to the program. However, the Dunleavy administration interpreted the program as being “sweepable” meaning that the funds need to be approved by the legislature yearly with a ¾ vote. The current legislature did not garner enough support to reach the vote threshold, and the PCE program remained unfunded.

AFN and many other leaders across the state of Alaska sued over this decision and just recently won the case arguing that the Dunleavy Administration overstepped and are not able to touch the PCE funds. This is great news! This means that the funding for PCE should be going out again soon. However, the Dunleavy Administration could appeal the decision to the Supreme Court, and we will be watching as this progresses, but this is a huge step in the right direction for the PCE program and those in rural Alaska!

Fourth: How YOU can get involved!

The legislature is scheduled to reconvene on August 16th to consider overriding Governor Dunleavy’s vetoes, a fiscal plan, and they can vote on “reversing the sweep” if they receive enough support from members.

To support the PCE program, you can:
Contact your legislator and tell them rural residents need PCE
– Write a letter to the editor on how PCE impacts you personally: email [email protected] or find your local editors email
– You can sign up for updates from NPA through our email newsletter. We don’t inundate your mailbox but do send updates for you to follow!

Lastly: Where you can find more info