Juneau Energy Emergency

Dear Neighbor:

This is our sixth email update on Juneau’s energy crisis following the interruption of hydroelectric power from Snettisham. You may also wish to visit our website at http://www.akdemocrats.org/juneau, where you will find recent information about the crisis and what is being done to ease the burden on Juneau residents and businesses, including documents and links.  

As we brace ourselves for the large bills coming out from AEL&P starting tomorrow, some hope appears on the horizon in a few new developments, including an updated levelization proposal from AEL&P and an energy relief plan from the Governor.

As always, if you have questions or concerns about these or other issues, please let us know. We really appreciate all the calls, emails and letters we have received and we are working hard to make sure Juneau makes it through this crisis safe and sound.

Governor Unveils Energy Relief Proposal

Yesterday the Governor unveiled an energy plan to address the rising cost of energy in Alaska. As oil prices climb higher every day (the Anchorage Daily News reports today’s price as $124.12 per barrel), the state coffers benefit and Alaskans’ pocketbooks suffer. With revenue estimates based on $85 per barrel oil, the state has a surplus above and beyond originally expected revenues. The proposed energy relief plan includes two parts – returning surplus funds through a grant to all electric utilities to reduce ratepayer bills and an energy debit card to residents for one year.

1) Electricity Cost Relief

Under the proposal, the State of Alaska would grant funds to all electric utilities statewide to reduce the cost of electrical services for one year. This is designed to result in a 60 percent reduction for all ratepayers that will flow to homeowners, renters, schools, governments and businesses. As a condition of grant participation, electric utilities would be required to agree to pass the entire value of the grant on to rate payers. A review by the Department of Law indicates there should be no federal income tax consequence since the grants act to offset the revenue collected by the utilities.

The proposal also includes conservation incentives for utilities. For every one percent reduction in 2008 kilowatt hour sales from 2007 sales, the state will make a year-end contribution for capital energy projects to the utility.

2) Energy Debit Card

The proposal provides for the State of Alaska to issue energy debit cards to each adult Permanent Fund Dividend (PFD) recipient to help reduce the cost of energy to Alaskans. The benefit would be $100 per month per PFD recipient and the amount allocated for children’s benefits would accrue to the card of the sponsor on their PFD application. Money not used one month would carry over to the next month. The energy debit card benefit would be taxable as personal income for federal income tax purposes. Activation of an energy debit card would serve as recognition that the benefit is accepted as personal income, and would trigger a Form 1099 for taxation purposes.

The energy debit card would be accepted for purchases from Alaska energy vendors such as heating oil distributors, natural gas utilities, electric utilities, gas stations and other retail fueling stations.

The governor’s proposed energy plan should be considered by the legislature during the special session that is scheduled to begin June 3 here in Juneau and is subject to change as the legislature evaluates the plan. If the Legislature passes the proposed plan, the benefits would start being distributed in September.

AEL&P to File Levelized Billing Request

AEL&P is planning to file a request with the Regulatory Commission of Alaska (RCA) today that will give more customers the option of levelized billing. A program is currently in place for customers with electric heat and if the RCA approves AEL&P’s request, all residential and small commercial customers would be eligible.

Levelized billing is based on past electricity consumption and projected future rates. AEL&P estimates how much a customer will owe throughout the next year and then divides that number by twelve to get the amount the customer will pay each month. After a year, AEL&P will compare the difference between the estimate and the actual cost and either issue a check or a bill to the customer for the difference.

 AEL&P also offers repayment plans to its customers that allow the customer to pay at least one-third of their normal bill each month and stretch the rest out over three to six months.

Assistance Available for Child Care Providers

With Juneau facing a child care crisis even before the specter of astronomical electricity costs, additional high energy costs could dramatically affect the ability of child care providers to remain open without passing costs on to parents. Recognizing this, the United Way of Southeast Alaska and the Juneau Unplugged assistance program administrators, Catholic Community Services, met to determine how to best address the needs of child care providers and parents. They decided to include child care providers in the Juneau Unplugged assistance program.

Child care providers will have 70 percent of their increased energy costs covered by the Juneau Unplugged assistance program. There will be no income eligibility standards for this assistance and all licensed or approved providers will be eligible for the benefit. Yesterday, letters were sent to all licensed and approved child care providers with details about the program and application procedures.

SBA Economic Injury Loans Available

The Small Business Administration today announced that they will be making low-interest Economic Injury Disaster Loans available to small businesses. The loans will be working capital loans of up to $1.5 million at an interest rate of 4% with terms up to 30 years. The SBA will be sending service representatives to Juneau next week. They will be available at the Juneau Empire Building (3100 Channel Drive, Suite 105) to answer questions about the program, issue loan applications, explain the application process and help individuals complete their application. For more information, read the SBA’s press release here.

CBJ Assembly Requests Reconsideration from Governor

The City and Borough of Juneau Assembly Monday night unanimously passed a resolution asking Governor Palin to reconsider her denial of a disaster declaration for Juneau. The resolution also urges the state to provide relief to Juneau by paying a significant portion of the diesel costs incurred while Snettisham is offline and asks the state to pay for the cost of repairs to the transmission system. The CBJ Assembly considers the avalanches to have been an “Act of God” which is causing economic destruction to Juneau similar to physical destruction caused to other communities which have been officially declared a “disaster” by the state.

The Juneau legislative delegation also asked the Governor to reconsider on May 5. We were also able to get a copy of the Disaster Policy Cabinet’s recommendations to the Governor from a reporter. Adjutant General Craig Campbell of the Department of Military and Veterans Affairs sent us a letter in response to our multiple letters to the Governor.

Juneau Legislative Delegation Meets with Governor Palin

On Monday, May 12, the Juneau legislative delegation attended a videoconference meeting with the Governor and key state officials in response to our May 9 request. Also in attendance were the Adjutant General Craig Campbell, Commissioner of Natural Resources Tom Irwin, Commissioner of Revenue Patrick Galvin, the Governor’s Special Staff Assistant Joe Balash and the Governor’s Acting Chief of Staff Mike Nizich.

We made some headway with the Governor. We were able to express the acute pain our community is facing and our displeasure that more state aid was not quickly forthcoming. We also made several suggestions (for instance, that we be given one "point of contact" to facilitate communications, and that the Governor consider using AIDEA to provide low or no-interest loans to energy providers) on how the state can better address both Juneau’s immediate concerns and the statewide problem of people struggling under generally high energy costs.

Juneau Legislative Delegation Requests Audit of Contracts

The state, through the Alaska Industrial Development and Export Authority (AIDEA) owns the Snettisham facility, towers and transmission lines. AEL&P operates the facilities under an operations and maintenance agreement and a power sales agreement. Under these agreements, AEL&P takes responsibility for maintenance and repairs. We are concerned that the contracts may not have been enforced diligently enough. We’ve asked the independent legislative auditor to look at the requirement for insurance and a repair and replacement fund. You can read the letter here.

Independent Review of Cost of Power Adjustment to be Done

Today in a press release AEL&P offered to fund two energy review initiatives. The review would consist of an independent audit of the cost of power adjustment and collections to ensure that the utility collected only what was necessary to cover its higher diesel fuel bills as well as a report on “lessons learned.” AEL&P proposes to contribute up to $30,000 from company funds (not passed on to ratepayers) to the City and Borough of Juneau who would oversee the review. The city would then contract out for a certified public accounting firm to conduct the independent audit and for a consultant who would make recommendations on contingency planning for similar events in the future. The consultant would be advised and directed by a three-member panel to be appointed by the Mayor. For additional information, read the press release and letter to the Mayor here.

Juneau Unplugged Community Campaign Rolled Out

Up and running this week, Juneau Unplugged is a community-wide campaign to provide information, encouragement and support during the electricity crisis.

The Juneau Unplugged logo and “Live More. Use Less” slogan give a unifying identity to the efforts of many dedicated individuals and groups in our community. Bringing together our schools, business and community groups, non-profits, media outlets, AEL&P and the City and Borough of Juneau, the campaign includes a broad spectrum of strategies to weather the emergency.

You can visit the Juneau Unplugged website at www.juneauunplugged.com for tips on conservation, safety and alternative energy sources; updates on repair work on the Snettisham transmission line and news on city, state, and federal responses to the emergency; and information on programs to help our families, small businesses, and others survive the crisis.

The Juneau Unplugged campaign invites all Juneau community groups to use the logo to help brand their efforts to aid and encourage the wider community. Download image files at the website or email info@juneauunplugged.com for more information.

Alaska Energy Authority Holding Town Hall Meetings on Energy

The Alaska Energy Authority (AEA) will be holding town hall meetings throughout Alaska to discuss how to move forward in reducing the cost of energy by using locally available energy resources. The community meetings will address two questions: First, what resources are out there to develop; and second, which resources each community would prefer to develop.

The meeting for Juneau is scheduled for May 27th, from 5-9PM in the Centennial Ballroom 1. For more information, you can read the press release from AEA here.

Visit the Juneau Legislative Delegation Website
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