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PCE credits restored after St. Paul Island officials, AFN and others battle to keep utility rates from spiking

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Hope McKenney/KUCB
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The city usually receives about $200,000 from the PCE fund each year. City officials say that credit essentially cuts residents’ electricity rates in half — at least for the first 500 kilowatt hours.

After weeks of uncertainty, St. Paul city officials announced Thursday that island residents will once again receive the Power Cost Equalization credit on their utility bills.

That news comes in light of a Superior Court ruling that favored plaintiffs like the City of St. Paul, the Alaska Federation of Natives and several others who sued Gov. Mike Dunleavy’s Administration in July for allowing the $1 billion endowment to be “swept” into the Constitutional Budget Reserve.

Dunleavy’s administration later announced that it won’t appeal that ruling.

In light of the announcement, when St. Paul island residents get their utility bills this month, they will see the PCE credit restored.

Communities across Alaska rely on the PCE Endowment Fund to help offset the high costs of energy production. The remote geographic location of places like the Bering Sea community of St. Paul makes generating electricity expensive.

St. Paul City Manager Phil Zavadil said the news that the endowment would be restored was a huge relief to the community, which had expected a major blow from the loss of the PCE fund. In anticipation of that — and with hopes of restoring the credits — Zavadil said the city held off on billing its residents for the month of July.

“I think we were all glad that it was successful — in that the money would be restored,” Zavadil said. “And it'll go back to the beginning of July. So pretty much nobody will see that higher electricity bill.”

The city usually receives about $200,000 from the PCE fund each year. City officials say that credit essentially cuts residents’ electricity rates in half — at least for the first 500 kilowatt hours.

Zavadil said residents can rest assured that they will continue to receive the credit for now. However, he added that he’s concerned that the legislature may take the PCE Endowment Fund away through other avenues in the future.

Meanwhile, Unalaska PCE-eligible residents will see the credit restored on their August utility bill, which is due out this week, according to Jim Sharpe, interim finance director for the City of Unalaska.

However, he said the city hasn’t received any guidance or funding from the state for July’s bill.

“Once that has been resolved, a credit will be issued for July,” Sharpe said in an email to KUCB.

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