Anchorage Daily News

Lawmakers responded with skepticism Friday to Gov. Sarah Palin's new idea for $100-a-month energy vouchers. But few seemed ready to trumpet outright opposition to a popular governor proposing to give away money in an election year.

Palin now wants the Legislature to take up her new proposal at its special session next month. That session, scheduled to begin June 3, has been called to work on the proposed natural gas pipeline. Palin will expand the call so that after June 20 lawmakers can also tackle her energy assistance package, said Joe Balash, her special assistant for oil and gas.

On Friday, Palin's new proposal was the talk of radio call-in shows and Internet forums. Some people praised the governor, saying they need help with utility bills. Others attacked the plan as socialism, comparing Palin to Venezuela's President Hugo Chavez.

Questions were raised about the likelihood of a black market developing in the trade of personal energy debit cards. Legislators and others also questioned how such a giveaway program could ever be shut off as long as oil prices remain high.

"Once you start it, you tell me where politicians will have will, whether it's an election year or not, to take money away," said Rep. Mike Chenault, R-Nikiski, co-chairman of the House Finance Committee.

"The Legislature was cautious during the legislative session about handing out cash, and this is just another method to do that," said Chenault's counterpart, Sitka Republican Sen. Bert Stedman, co-chairman of the Senate Finance Committee. "If we're going to hand out cash, why create a whole bureaucracy on issuing these debit cards?"

Palin is proposing to give $100-a-month energy debit cards to every Alaskan who qualifies for a Permanent Fund dividend this year. She also wants to give grants to electric utilities, which she says will reduce bills to all ratepayers by 60 percent. The total cost of her one-year program: $1.2 billion.

"A lot of people here are kind of excited about it," said Robert Clark, president of the Bristol Bay Area Health Corp. in Dillingham, where heating oil shot up another $1.50 a gallon Friday after the first fuel barge hit the Nushagak River.

"But it's a Band-Aid approach, a short-term fix," said Clark, who wrote Palin last month pleading for emergency help. "We're hoping to get alternative energy here."

SHORT-TERM FIX, LONG-TERM PROBLEM

There seems to be widespread agreement in the Legislature that the state needs to help people with energy cost relief. But the debit card idea is raising eyebrows.

Senate President Lyda Green said she's been hearing from a lot of people since the governor announced the plan on Thursday.

"There are lots of questions. And one that keeps kind of cropping up is the potential for fraud with the debit card," Green said.

Outside the Legislature, Palin's proposal spurred a conversation Friday between two frequent antagonists, the Alaska Conservation Alliance and the Resource Development Council. Both groups agreed it would encourage continued high use of fossil fuels and divert money from long-term investments needed to provide cheaper energy.

"Think about what we could do for $1.3 billion," said ACA head Kate Troll.

"A one-time fix that Alaskans are going to expect to continue just doesn't seem like a solution," said Jason Brune, the RDC executive director.

Brune said such a giveaway was likely to hurt the state's reputation in Congress. One example is the state's effort to win revenue sharing from federal offshore oil leases, a step that industry supports because it can mean "community buy-in" for the controversial leasing program. Congress could sneer at a state giving away so much money.

Legislators raised other concerns. Rep. Mike Doogan, D-Anchorage, pointed out that the utility subsidy would help commercial and industrial consumers just as much as residential users.

"We'd be paying 60 percent of BP's utility costs," he said.

Doogan and others worried about the difficulties in shutting down such a program once it starts.

"You've got exactly the same problem a year from now, and it's another billion dollars," Doogan said.

EXIT STRATEGY QUESTIONED

Judging from the past, efforts to end such programs are the source of grief, said Senate President Green. "There is always, always, a huge, huge battle and kind of a face off and it's very, very difficult."

"The plan is inconsistent with the message we got from people all over the state about wanting the Legislature to save the surplus," said Rep. Paul Seaton, R-Homer.

Palin administration officials had some answers for the skeptics Friday.

The energy debit card, given to each household, could only be used for energy purchases, said Balash. For instance, it could only be swiped at a gas pump -- not inside a gas station, with a packet of Twinkies thrown into the deal.

It would not be a crime for people to sell their cards and personal identification numbers, Balash said. But once the cards are used, he said, the original recipient would be responsible for federal taxes on the state aid -- $1,200 in a year for each member of a household.

Administration officials are aware that the utility program, expected to cost $475 million, would help industrial users as well as residential. They don't yet have a breakdown of those benefits, said Balash, "but we set that policy with eyes wide open."

He said the administration was moved to propose the plan now, and not during the legislative session that ended in April, because oil prices have soared 50 percent in the past month. He said using money to expand aid levels and eligibility under the existing low-income energy assistance program would have been more complicated than a simple new program with benefits going to everyone.

As for the program's future, the administration's exit strategy involves ongoing work toward long-term solutions that should eventually bring down the cost of energy in Alaska. Those solutions will include renewable energy projects, a major focus on conservation in next year's legislative session and work on the gas pipeline, Balash said.

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