1. RELIABLE, & AFFORDABLE ENERGY SOLUTIONS
Power Cost Equalization
SAFE,
RELIABLE, & AFFORDABLE ENERGY SOLUTIONS
Jeff Williams
PCE Program Manager
BIA Providers Conference
November 29, 2018
REDUCING THE COST OF ENERGY IN ALASKA

2. AEA’s mission is to reduce the cost of energy in Alaska
SAFE,
RELIABLE, & AFFORDABLE ENERGY SOLUTIONS
AEA’s mission is to reduce the cost of energy in Alaska
AEA is charged with a mammoth task: to help Alaska communities develop, finance, operate and maintain energy infrastructure for improved safety, reliability and affordability of consumer energy (so called to differentiated electricity and heat from the state’s extractive energy sector)
Our mission is to reduce the cost of energy in Alaska. Our work includes programs and initiatives that identify and implement energy solutions that meet the discrete needs of Alaska’s many communities. We are the state of Alaska’s energy policy and planning lead, and we are a funding conduit for both state and federal dollars. We provide soup to nuts technical assistance, helping communities and utilities select, design, construct, pay for, and operate projects over the long term for maximum economic life of energy infrastructure.
AEA is an energy solutions center for Alaska, working every day with the people and communities around the state making up this “living laboratory” to overcome challenges and capitalize on opportunities.

3. PCE Program Inception Established in 1985
Provides economic assistance to rural communities where, in many instances, the kWh charge for electricity can be three to five times higher than the average kWh rate in Anchorage, Fairbanks and Juneau.
Programs Preceding PCE
Power Production Assistance Program (1980)
Power Cost Assistance Program (1981)

4. Legislature Establishes PCE Program
AS replaced the Power Cost Assistance Program with what is known today as the Power Cost Equalization Program
The purpose is to equalized the power cost per kWh statewide at a cost close to or equal to the mean of the cost per KWh in Anchorage, Fairbanks and Juneau *
Went into effect on October 20, 1984
*AS (a)(1)

5. Since The Program’s Inception
Fiscal Year 1988*
Fiscal Year 2017
102 Participating Utilities
170 Communities Served
Total Disbursements of $17,642,895
89 Participating Utilities
194 Communities Served
Total Disbursements of $26.1M
*First Publication of AEA’s Annual Statistical Report

6. Program Funding
Power Cost Equalization and Rural Electric Capitalization Fund
Administered by the authority as a separate fund and is composed of:
Appropriations by the State Legislature
Appropriations from the National Petroleum Reserve *
Appropriations from the PCE Endowment Fund
Gifts, bequest and contributions from other sources
Interest earned on the fund balance
*AS (g)(3)(B)

7. Eligible Utilities
The Railbelt electric utilities, the electric utility in Juneau and those utilities that receive electric power from the Four Dam Pool facilities are not eligible for PCE assistance.

8. Eligible Customers
An eligible residential customer may receive PCE credit on up to the first 500 kWhs consumed each month.
Community facilities are also eligible to receive PCE credit on up to a maximum of 70 kWh per month x the community population.
State and Federal customers, as well as commercial customers, including schools, are not eligible for PCE credit.

9. Administration of the PCE Program
The PCE Program is administered by two state agencies:
Regulatory Commission of Alaska (RCA)
Alaska Energy Authority (AEA)

10. The Regulatory Commission of Alaska determines the PCE level for each utility based on:
Fuel expenses such as the cost of fuel, transportation; and,
Non-fuel expenses such as salaries, insurance, taxes, parts and supplies, interest and other reasonable cost.

11. The Alaska Energy Authority administers the PCE Fund based on:
Fiscal appropriation by the Legislature,
Monthly reports submitted by the participating utilities, and,
Determination of eligibility for residential and community facility customers.

12. Participation in the PCE Program
AEA Requirements
The utility must file monthly reports with AEA in order to receive payment. It must maintain good administrative practices and keep records of its costs and revenues, and upon request, the records of the utility are to be made available to the AEA and RCA.*
*AS (f); 3 AAC

13. FAQ’s and Answer 1. Which customers are eligible to receive PCE?
The statute excludes from PCE, State and Federal offices and facilities, as well as commercial customers, including schools. All other utility customer are generally eligible to receive PCE credits – within the statutory limits.

14. FAQ’s and Answer
2. What part of a residential customer’s bill is eligible for PCE credit?
A residential customer will only receive PCE credit for up to 500 kWh per month.
Example: If a customer used 800 kWh in one month, and the utility charges 50¢/kWh, and the approved PCE rate is 35¢/kWh;
Then the customer’s bill would be as follows:
800 kWh x 50 cents/kWh = $ 400; minus PCE credit of
500 kWh x 35 cents/kWh $<175>
Customer pays $ 225

15. PCE Residential Effective Rates
Our mission is to reduce the cost of energy and the goal of the state is to provide affordable energy to Alaskans. No more effective effort than PCE. It’s not a perfect process, but the chart shows that the program is effective at levelizing costs to near Railbelt rates.
The PCE program provides reimbursements to eligible rural utilities and community facilities to equalize power costs to urban Alaska
The PCE base rate is $ per kilowatt hour
Without PCE, many rural ratepayers would pay more than four times urban rates
AEA assists utilities to become eligible for program (Total 193 eligible communities)
Power Cost Equalization:
Provide economic assistance in rural Alaska where electrical rates can be 3 to 4 times higher than in urban Alaska
Available to community facilities and residential customers
Regulatory Commission of Alaska (RCA) sets rates, calculations based on use, costs and efficiencies
Approximately 80,000 people live in the 190 participating communities (FY 15)
PCE program costs approximately $41 million
$948 million PCE Endowment (November 30, 2015)

16. FAQ’s and Answer 3. What is a community facility customer?
Statute defines a community facility customer as a water, sewer or charitable educational facility, public outdoor lighting, or a community building whose operation is not paid for by the State or Federal government or by a private commercial organization.
A community building is defined as a community facility that is:
Not operated for profit, and;
Open to the general public

17. FAQ’s and Answer
4. Does a community facility customer have maximum monthly kWh limits as well?
The monthly limit set by statute for all community facilities in a community is the community’s population times 70.
Example: Total kWh usage of all community facilities in on community is 5,000 kWh in one month and there are 50 residents in the community, the utility would receive PCE for the first 3,500 kWh.
(70 kWh x 50 residents = 3,500 kWh)
The remaining 1,500 kWh are not eligible for PCE, and would be charge the full rate.

18. FAQ’s and Answer
5. Is all the information requested on the PCE Utility Monthly Reports necessary?
YES! The information gathered in the PCE monthly reports is compiled and published in the AEA’s annual statistical report; which is used by a wide variety of recipients for such things as project planning and future funding decisions.

19. PCE Web Portal
Many of you have asked if there is a way to speed up payment processing and eliminate the onerous process of printing and mailing supporting documentation. AEA’s web portal is a tool designed to help utilities file monthly PCE reports. By using the PCE Web Portal, participating utilities:
Eliminate the monthly costs associated with printing and mailing a utility’s reimbursement requests and supporting documentation;
Receive their reimbursements sooner by eliminating mailing transit time;
Quickly determine the status of their reimbursement requests;
Have on-line access to previously filed reports;
Have on-line access to resource materials, forms, and training guides.

21. Agency Contact Information
If you have additional questions or would like additional information, please feel free to contact this agency directly at:
Alaska Energy Authority
Jeff Williams, PCE Program Manager
813 W. Northern Lights Blvd.
Anchorage, AK 99503
(907) or (888)
PCE Annual Statistical Reports and additional information may be found at

22. RELIABLE, & AFFORDABLE ENERGY SOLUTIONS
SAFE,
RELIABLE, & AFFORDABLE ENERGY SOLUTIONS
ALASKA ENERGY AUTHORITY
813 West Northern Lights Blvd. Anchorage, Alaska Phone: (907)     Fax: (907) Toll Free