Anchorage Daily News - 3/24/90
Analyst: Use Railbelt fund for rebates
By GEORGE FROST, Daily News reporter

A consumer advocate has yet, another idea for spending the $230 million Railbelt Energy Fund, a pot of cash coveted by Gov. Cowper, election-year legislators and electric utilities for various pet projects.

Alan Mitchell, a utility analyst under state contract, wants to create an investment fund and give rebates to electricity consumers for the next 35 years.

He said the money would be better spent by consumers than by utilities, which for years have been lobbying for huge electrical projects.

If the legislature approves Mitchell's plan, and so far nobody has proposed a bill incorporating his idea, utility customers would get annual payments of $73 in 1991, $158 in 2015 and $22 in 2025 if the fund was protected against inflation, he estimated.

If earnings were not reinvested to protect the fund's principal, electricity customers would get more up front, $122 in 1991, but less in later years, he said.

The railbelt fund was established in 1981 to finance utility projects in the Railbelt, a region of more than 300,000 people that surrounds the railway from the Kenai Peninsula to Fairbanks, and legislators can't agree on what to do with the money

Dave Hutchens, executive director of the Alaska Rural Electric Cooperative Association, said the seven Railbelt
electric utilities oppose the new idea.

Utility officials say the electrical lines between Anchorage and Soldotna, and Fairbanks and Healy, need upgrading so that power can be more efficiently shifted back and forth, reducing costs and increasing the reliability of the whole power grid.

Mitchell's idea would knock out not only the $125 million needed for interties, but other projects too.

"If that proposal were adopted it would mean using all the fund rather than dividing it up between the interties and other projects," Hutchens said.

Mitchell, an opponent of the interties, has said, they cost too much for what they will deliver.

Also on the utility, companies' list are $10 million for a transmission line in Seward and $30 million for construction of a coal-fired power plant in Healy, .Hutchens.said.

Others want to spend the fund on university buildings, roadwork for a proposed lodge in, McKinley State Park; a fish hatchery, a ferry and other projects.