Tuesday, August 05, 2008

Alaska State Senate Passes SB4002 Energy Relief Bill Which Includes $500 Rebate Per Alaskan; Next Stop Is The House

Late on Monday August 4th, 2008, while Congressman Don Young was taking Sean Parnell and Gabrielle LeDoux to school during KTUU's Congressional Candidate Debates, the Alaska State Senate passed SB4002, which would provide sweeping energy relief legislation for Alaskans, including a $500 cash payment to each Alaskan. Media stories published by the Anchorage Daily News and the Juneau Empire.

The bill itself can be viewed HERE. According to the description, SB4002 has the following provisions:

- Amends the bulk fuel bridge loan fund and the bulk fuel revolving loan fund
- Amends the power cost equalization program, repealing the exclusion from eligibility for power cost equalization for certain power projects that take their power from hydroelectric facilities, and amending the definition of 'eligible electric utility' as it applies to the power cost equalization program and the grant program for small power projects for utility improvements relating to establishing a gas pipeline development fund in the Department of Revenue
- Establishes the Alaska resource rebate program and a heating assistance program
- Provides a series of effective dates for these measures (the effective dates vary).

Alaskans would receive assistance in two ways. First, all Alaskans would get the $500 resource rebate. Then, Alaskans would also get additional emergency energy relief by subsidies on different types of energy. Subsidies would be applied to heating oil, natural gas, and electricity. The largest subsidies would be applied to heating oil, which grants rural residents disproportionately dependent upon it the extra assistance for which they've been clamoring. No one would pay more than $3.00 per gallon of heating oil out of their own pockets if this bill was passed. Similar ceilings are applied to natural gas and electricity, although electricity customers would be required to certify that the home was heated by electricity.

SB4002 passed by a 14-3 margin, with three abstentions. Here's the scorecard:

Yeas: Davis, Ellis, Elton, French, Hoffman, Huggins, Kookesh,
McGuire, Olson, Stedman, Stevens, Thomas, Wielechowski, Wilken

Nays: Bunde, Dyson, Green

Excused: Cowdery, Therriault, Wagoner

The only question seems to be whether the rebate will grow larger. SB4002 now heads to the State House, where some members lean toward a heftier rebate of $1,000 or more. It will start off in the Finance Committee. The House had their own version, HB4002, which called for a resource rebate of $1,200 per Alaskan. This mirrored Governor Sarah Palin's proposal, described HERE.

Con Bunde explained his negative vote. He said that although the state might be rich today, as oil production drops, it could again find itself facing budget deficits and an inability to pay for the programs it already has, much less new energy subsidies or rebates. A better idea would be to place the money into an account where it's available for state spending three to five years from now, further staving off the day when the state might need to levy taxes on Alaskans.

Lawmakers in both the Senate and House have indicated they want to tack the rebate onto Permanent Fund dividend checks that will go out to an estimated 620,000 Alaska residents beginning in early October. The dividend alone is expected to be a record size this year, more than $2,000.

The program isn't perfect. Some are already complaining that $500 would only buy them a month's worth of heating oil. But one month's help is better than none. And if the $500 resource rebate is appended to each person's PFD, this means a family of four would be getting $2,000. That would provide even more assistance. The program is designed to provide a hand UP, not a HANDOUT. We need to start weaning ourselves away from the entitlement mentality which is throttling initiative in this country.

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