July 2023 Back Page – Fiscal Year 2024 AK State BudgetPosted: June 27, 2023
FY 2024 State Budget Signed by Governor
After a stalemate between the Alaska State House and Senate at the end of the regular session in May, legislators quickly passed a combined operating and capital budget during the first day of the special session. On June 18th the governor signed the bill into law with an effective date of July 1, 2023 avoiding the threat of a government shutdown.
The budget passed by the legislature was trimmed by the Governor resulting in roughly $4.7 billion for operations and $0.4 billion for capital improvements. For the most part funding directed at energy projects was left intact. The appropriation for the Power Cost Equalization (PCE) program remained at $48 million which is projected to provide full program funding for FY2024. This figure is a substantial increase from the $32 million appropriation in FY2023 to compensate for both the higher cost of energy and the increase in the residential usage cap from 500 kWh/month to 750 kWh/month.
The Renewable Energy Fund (REF) which provides grant funding for renewable energy projects across the state was funded at $17 million which is expected to fund seventeen of the twenty-seven projects recommended by the REF Advisory Committee. Official notices have not been issued but the funding is expected to support projects in four AVEC communities, a solar/battery project in Huslia with the Tanana Chiefs Conference; a solar/battery project in Selawik with the Northwest Arctic Borough; a heat recovery project in Yakutat with the Yakutat Community Health Center; and an AVEC wind feasibility study in Kalskag. In separate legislation (HB 62) the legislature not only renewed the REF program which was coming to the end of its 10-year reauthorization, it removed the sunset clause altogether. The program will remain permanent, but appropriations to fund the program will still be required every year.
Funding was also provided for ongoing projects administered by the Alaska Energy Authority to support energy infrastructure including $32.5 million for Rural Power System Upgrades and $19 million for Bulk Fuel Upgrades.
Not directly tied to energy but often a substantial boost in members’ incomes used to pay for utilities, the Permanent Fund Dividend (PFD) was set at a responsible, respectable $1,300. Set lower than last year’s payout, the amount comes with an escalation clause to add an energy assistance payment of up to $500 if oil prices increase and the state earns more revenue than expected.
Until next time,