AEA presents SB218 to Senate committee seeking repeal of electric co‑op kilowatt tax

Curtis Thayer, executive director of the Alaska Energy Authority, told the Senate Labor and Commerce Committee on Feb. 18 that Senate Bill 218 would repeal a long‑standing per‑kilowatt tax on electric cooperatives and standardize tax treatment for independent power producers, public utilities and joint action agencies.

Thayer said the tax dates to 1959 and had not been updated since about 1980. He described SB218 as eliminating the current tax assessed on electric cooperatives for each retail kilowatt sold and as repealing ad valorem obligations on co‑ops; the bill would expand exemptions for generation and storage facilities placed in service prior to 2024 and amend local refund procedures (AEA cited amendment to AS 10.25.570 in testimony).

On fiscal impact, Thayer gave an approximate current statewide collection figure but the transcript records the amount inconsistently; he described the total as roughly $2.4 million (with variations in the record) and said roughly 89% of that collection is tied to the Railbelt while rural co‑ops account for a smaller share (about $256,000). He said Anchorage represents roughly 56% of the Railbelt share but deferred municipality‑level detailed numbers to follow.

Committee members pressed for the average per‑household savings and for municipality backfill estimates. Thayer said he did not have per‑household figures on hand and would provide them later. Senators also asked whether independent power producers would be covered; Thayer noted HB307 already exempted IPPs and that SB218 aligns tax treatment across entities. When asked about pending AKLNG tax language, Thayer said he had no insight and that AKLNG was not part of this bill.

No votes were taken. The committee requested that AEA provide municipality‑level revenue impacts and per‑household savings estimates before further consideration.