June 24, 2008

Energy Devours Incomes in Bush: 40% OF PAYCHECK

By Kyle Hopkins, Anchorage Daily News, Alaska

Jun. 24--The farther you live from a city, the worse the news.

According to university researchers, the poorest families in Alaska's most remote towns and villages are expected to spend more than 40 cents out of every dollar they make on power and heat in the coming year.

In comparison, Anchorage's lowest-income households will spend about 4 cents from every dollar on energy bills.

The figures come from a University of Alaska Institute of Social and Economic Research report released earlier this month.

Sen. Lyman Hoffman, D-Bethel, asked for the predictions as the state considers how to help people pay their bills. Gov. Sarah Palin has proposed giving $1,200 to every Alaskan to cover the costs, and one question facing lawmakers -- besides whether that's a good idea to begin with -- is whether everyone should get the same amount.

In the village of Nunapitchuk, about 20 miles from Bethel, one family is watching less TV and rationing video game time for the kids in hopes of shaving power bills.

"Everybody's trying to, you know, go on to public assistance or trying to conserve as much as they can," said James Angaiak, who earns $10 an hour, six hours a day as a land planner for the city.

There's no guarantee the Legislature will back Palin's plan to give people money to help pay for energy bills. But Hoffman -- who represents Bethel, the Alaska Peninsula and Aleutian Islands -- says that giving more to people who are hit the hardest has to be part of the debate.

"We give cost of living (pay) to state employees because they live in a higher cost area. And we give differentials for schools -- so I think there is an argument that if we are going to address the high energy costs, we should also take that into consideration," he said.


Rep. Kevin Meyer, R-Anchorage, said that debate would only open old wounds by pitting urban and rural Alaskans against each other.

"I think the argument's going to come up that people live in rural Alaska by choice," he said.

The governor proposed a flat payout plan -- rather than payments based on people's individual needs -- because there are already other programs that benefit low-income or rural Alaskans, said Palin spokeswoman Sharon Leighow.

She said Palin is considering offering grants to power utilities to lower bills, and that the governor is willing to "consider all options" when it comes to the proposed $1,200 energy rebates.

The new ISER report does not factor in gasoline prices or water and sewer bills. It also can't predict how much people are scaling back their heat and power usage in the face of rising costs.

But researchers say it shows what people must spend on household energy costs depending on where they live and how much they earn.

Families with mid-range incomes who live in Anchorage were projected to spend about 3 percent of their income on energy costs, based on May prices, according to the study.

That figure increases to about 5 percent of your income if you live in other cities or towns on Alaska's road system.

Mid-income households in remote villages -- places you can only reach by water or plane -- are expected to spend about 11 percent of the paycheck on energy.

One reason energy is more expensive in rural Alaska is that most people use diesel fuel to heat their homes, while the majority of Anchorage families use natural gas.

ISER estimates that the median annual cost of power and heating costs for an Anchorage family is about $2,400, compared to about $4,100 for midsize towns and cities and $6,600 for remote rural villages.


Find Kyle Hopkins' political blog online at adn.com/alaskapolitics or call him at 257-4334.


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Copyright (c) 2008, Anchorage Daily News, Alaska

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