30 Alaska Business Monthly | May 2015 www.akbizmag.com
Above and Right: The Emmonak
Tank Farm was recently completed
and is now in use.
Residents of rural and remote communities in Alaska spend as much as 47 percent of their
household income on energy, based on
2008 energy prices, according to a 2012
report on rural energy use from public
policy forum Commonwealth North.
The sting hits low-income households
the hardest. Mid-range income households in the same areas pay around 13
percent of their household income for
energy, the report states. But it’s still a
lot more than Alaska residents living on
the road system pay for energy, where
heat and power is delivered via an in-terconnected grid and largely based on
less-expensive natural gas instead of
In road-system communities, low-in-
come households typically pay about 18
percent of their income to energy sup-
pliers, while mid-range households pay
about 6 percent.
That’s not because rural residents are
using more energy—most use less than
half the energy urban consumers use,
the report states.
The state has recognized this disparity and provides help through its Power
Cost Equalization program, which assists customers in rural areas by offsetting the per-kilowatt-hour charge.
In fiscal year 2015, the state appropri-
ated $41 million from its Power Cost
Equalization Endowment Fund to 190
rural communities to help subsidize
the high cost of power in rural areas of
But is continuing to pay a portion of
each rural resident’s power bill the best
Meera Kohler, president of the Alaska
Village Electric Cooperative (AVEC), says
no. Kohler chaired a committee working
with Commonwealth North that, in February 2012, issued a report outlining a
plan for a statewide energy grid.
“One of the conclusions was that we
have to connect the state,” Kohler says.
The Commonwealth North report
emerged about the same time as a plan
By Rindi White