Lawmakers hear warnings of statewide fuel shortages and consider boosting Alaska's bulk‑fuel loan program

Co‑chairs Holland and Mears convened a House Energy Committee hearing on April 23 to examine mounting fuel supply‑chain risks for Alaska communities and potential legislative responses as the session nears its close.

Nils Andreasen, executive director of the Alaska Municipal League, told the committee the risk environment is broad: higher prices and possible availability gaps “will be widespread” and will ripple into food, transit and construction costs across the state. Andreasen urged the legislature to consider immediate tools including greater capitalization of the bulk fuel revolving loan fund, raising its statutory loan cap (he suggested doubling the current cap as an example), expanding eligibility, and examining short‑term tax pauses and borrowing against the Power Cost Equalization program to ease cash‑flow stresses.

The hearing produced repeated questions from legislators seeking clearer inventories and timelines. Representative Neli Jimmy asked for data on how much fuel communities currently have and whether additional Southcentral storage or other staging could reduce crisis risk. Representative Hedgeman described the situation for remote communities as nearing “catastrophic” if deliveries fail and thanked the finance committee for adding $17.5 million to the Alaska Heating Assistance Program earlier in the session.

Sandra Moller, director of the Division of Community and Regional Affairs (DCRA) at the Department of Commerce, outlined the mechanics of the state’s Bulk Fuel Revolving Loan Program. The program, established by statute for communities under 2,000 residents, currently carries a statutory cap of $750,000 per loan, is administered as a revolving loan with typical repayment requested within nine months, and in 2025 served 51 communities with 76 loans. DCRA reported roughly $20–$22 million across its bulk‑fuel and bridge‑loan accounts and said it had stress‑tested scenarios showing materially higher capital needs if price increases of roughly $3–$5 per gallon materialize or if more borrowers seek loans.

Moller emphasized the program’s limits: increasing the loan cap or adding additional borrowers would require statutory change and additional capital, which the director said would likely be treated as capital funding in the legislature. She also noted DCRA’s other tools: a biannual fuel price survey covering about 100 communities and training funded through the Denali Commission to support local fuel administration and conservation practices.

Committee members and witnesses emphasized distinctions among communities: regional hubs such as Kotzebue may be better positioned to manage higher prices, while small villages with very high per‑person energy burdens would face the largest proportional harms. Several witnesses underscored the need for clearer state leadership on coordination, better visibility into community inventories, and near‑term legislative decisions so orders and financing can be aligned with the delivery season.

The committee closed with follow‑up requests for additional numbers from DCRA and other agencies and said it would weigh recommendations before the session end.

The hearing adjourned at 3:00 p.m.; the committee plans additional briefings next week.