The bill would raise the cap on state-backed loans Alaska communities use to buy bulk fuel.
Updated: 15 minutes agoA Crowley fuel barge arrives in Russian Mission on June 29, 2019. The barge was in the village to deliver fuel to the school and city.
JUNEAU — The Alaska House voted unanimously on Wednesday to raise the cap on loans that small communities use to buy bulk fuel amid soaring energy prices. Communities with populations under 2,000 can utilize the state-backed Bulk Fuel Loan Program to buy heating oil, propane and gasoline. The bill would also allow communities to pool fuel orders and further raise the loan cap.
A $5-per-gallon increase in the cost of retail heating fuel would lead to an increase of $450 million in fuel costs across rural Alaska, the Department of Commerce, Community and Economic Development warned lawmakers in a last week. The department said that heating fuel is currently about $3 per gallon more expensive than last year.prices for already expensive fuel could riseRep.
Nellie Jimmie, a Toksook Bay Democrat, said raising the loan cap would allow for loan amounts closer to the reality of today’s fuel costs. She recalled visiting a home last year in a village near Bethel, where one resident could not afford to buy fuel. SheADVERTISEMENT “This was before the war, before the latest price spikes, before the coldest winter the Y-K Delta has seen in 15 years. That was just a regular day,” Jimmie said.
“Now we have an overseas war that has been good for the state’s revenue. But that same war is squeezing global fuel markets. And those prices flow straight to my communities with nothing in between,” she said. The state Department of Commerce, Community and Economic Development said that the difficulties for fuel access this year are threefold: constraints in the global market, decreased fuel in store from the particularly cold winter, and thick sea ice slowing access to ports.
Some rural communities receive just one fuel delivery per year, meaning they’re locked into buying a year’s worth of fuel at high prices. Energy prices have been a key driver of budget decisions in the Legislature this year.
While lawmakers have relied on a windfall in state revenue generated by higher oil prices, they have also attempted to address the toll of rising fuel costs on individual Alaskans.contains a $150 per person energy relief payment for recipients of the Permanent Fund dividend, and education spending of up to $111 million, both contingent on oil prices remaining high. Rep.
Neal Foster, a Nome Democrat and co-chair of the House Finance Committee, noted that the default rate on bulk fuel loans is 0.5%, five times lower than the default rate for typical loans. Rep. Ky Holland, an Anchorage independent, said that not only is cost a major issue, but the availability of fuel is also uncertain.
“The timeliness of this is important because these communities need to be making commitments now to be able to secure their supply that will not be delivered until later this summer or early this fall,” Holland said. In securing the supply, communities must pay for the fuel ahead of when they’ve generated revenue to pay for it. The bill so far has moved quickly through the Legislature.
The Senate Finance Committee introduced a similar bill last week, indicating interest from finance leadership in both chambers to raise the loan cap.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Alaska House passes bill adding more than $140 million to education budgetSenate members signaled the bill was unlikely to pass before the end of the session.
Read more »
Bill aiming to stabilize school budget process passes out of Alaska HouseThe bill would allow school districts to build budgets based on known enrollment numbers.
Read more »
Alaska’s famously massive cabbages should be the official state vegetable, state House saysThe giant green cabbage, enabled by the midnight sun, is a fitting symbol of Alaskans’ spirit and a nod to the state's history, said bill sponsor Rep. DeLena Johnson, a Palmer Republican.
Read more »
Alaska House passes bill aimed at stabilizing budgets for school districtsThe legislation moves to the Senate, but its future is uncertain with just one week left in the legislative session.
Read more »