07/07/06  Governor Murkowski vetoes Railbelt Energy Fund Appropriations

GOVERNOR VETOS APPROPRIATION HE SUPPORTED DURING SESSION

Governor Frank Murkowski, reversing an earlier position, vetoed an appropriation that would have benefited electric utility ratepayers around Southcentral Alaska, including members of Homer Electric Association. The Governor announced the veto on June 30 when he signed the state’s FY 2007 capital projects bill.

The $2.25 billion capital spending plan passed by the Legislature in May included a $73.5 million appropriation from the Railbelt Energy Fund (REF). The REF was set up to support Railbelt energy projects after plans to build the Susitna Hydroelectric project were abandoned in the mid-1980’s. 

The Governor’s veto of the REF disbursement was a major disappointment to utilities around the Railbelt. Homer Electric General Manager Brad Janorschke said the Governor basically reneged on a commitment he made earlier in the year. 

“Throughout the legislative session, the Governor and his staff supported the Railbelt Energy Fund plan agreed to by the utilities, the Legislature, and the Alaska Industrial Development and Export Authority (AIDEA).  In fact, the Governor invited several utility managers to his home to discuss the plan and give it his approval.  To wait until the final minute and then use his veto power to cut the funding is a disservice to the tens of thousands of electric utility rate payers in the Railbelt area,” said Janorschke.

The utilities planned to use the appropriation to upgrade existing infrastructure and develop new facilities that are needed to meet the growing energy needs in the most populated area of the state. AIDEA’s share of the appropriation was going to be used for the restart the Healy Clean Coal Project.  The long term goal of the infrastructure improvements is to provide reliable and affordable electricity to ratepayers.

Janorschke pointed out that other areas of the state, specifically Fairbanks, have enjoyed allocations from the Railbelt Energy Fund. Over the years, more than $85 million has been spent out of the REF to build several projects serving the Fairbanks area. The vetoed appropriation was designed to equally distribute the remaining funds to areas, including the Kenai Peninsula, that have yet to benefit from the REF.

One of the more puzzling aspects of the veto is the reason being cited by the Governor’s office for the budget cut. In a press release, the Governor suggested that the utilities need to work together to meet the future energy needs of the state and the projects he vetoed would have done little to meet that need. Janorschke said the Governor’s comments are off-base.

“We have had meetings with the Governor and his staff regarding energy priorities. In fact, the Governor agreed that he would not veto the Railbelt funds if we continued to work on the re-start of the Healy Clean Coal Plant. We have proceeded in good faith toward that goal. In simple terms, the Governor failed to honor his earlier commitment,” said Janorschke.

Along with HEA, other utilities affected by the Governor’s veto include Copper Valley Electric Association, Chugach Electric Association, Matanuska Electric Association, Seward Electric and Anchorage Municipal Light and Power. The veto also eliminated funding for the Alaska Industrial Development and Export Authority to help with the re-start of the Healy Clean Coal Plant.