Alaska To Stimulus Funds: Yup, We'll Take 'Em

Earlier this month the Alaska state legislature, in a special session, voted 44-14 to accept $28.6 million in stimulus funds that Sarah Palin had rejected in May. Sean Parnell, Alaska’s governor since Palin's resignation, says the money will be used primarily for energy efficiency improvements in public buildings.

The tale of the showdown between Palin, the state legislature, and the federal Department of Energy may ultimately reveal as much about state sovereignty under the current administration in Washington as it does about Alaska's internal politics.

Palin has more than once made her case for rejecting the stimulus money — or at least a portion of it — clear: her objection is that the American Recovery and Reinvestment Act calls for the adoption of the International Energy Conservation Code in exchange for the funds, which would set new standards for things like window fenestration and lighting equipment in new and remodeled commercial and residential buildings. Such codes, however, could be a logistical nightmare for some communities to adopt and for the state to enforce.

Alaskan buildings are architecturally diverse, each constructed for a particular climate and geography. Homeowners in Ketchikan, for example, where it rains nearly every day of the year, have different concerns than those in Valdez, where the average yearly snowfall is 325 inches. Many communities in the state are only accessible by boat or plane, so the shipping of supplies is costly and inefficient. Economic hardship and subsistence are also the normal standard of living in many of the remote, rugged Alaskan towns and villages.

Because of these circumstances, the state has always permitted local governments to set their own building codes. Most of the villages choose not to have building codes at all. All things considered, monitoring energy code compliance in perpetuity would easily cost the state more than $28.6 million. Palin also has noted that the state has hundreds of millions of dollars already budgeted for energy efficiency and renewable energy projects, so the less than $30 million in stimulus funds really aren’t a substantial addition to the state’s effort.

Her rejection of the funds sparked a debate that was carried out in press releases, official letters, and Anchorage Daily News editorials. A legislator from Anchorage claimed in an op-ed piece that Palin was “denying” Alaskans much needed funds, and that rejecting money from the stimulus package brings to mind the old saying, “two wrongs don’t make a right.” The co-chairs of the state senate resources committee wrote a letter urging Palin to consider Missouri’s proposal (accepted by the Department of Energy) which would fulfill the mandate with a 90% compliance rate on the local level, exempting communities with populations under 2,500 and structures without plumbing and electricity. There are enough major Alaska communities that have already adopted energy codes, they said, that the state either already meets or could easily meet the federal requirements in the necessary time frame.

Palin responded to these opponents with her own editorial and press releases, and an Anchorage architect agreed with her in another op-ed, suggesting that while Alaska has long built energy efficient buildings out of cold weather necessity, the two senators’ numbers for 90 percent compliance didn’t add up. The primary result of taking the money, he claimed, would be “a new regulatory requirement to verify compliance.”

The disagreement hinged on everyone’s interpretation of the DOE’s language. The initial mandate required “assurances” from the governor that local communities with the authority to do so “will implement” the codes. Because there is no statewide energy code in Alaska and the state constitution supports local self-government, Palin took the stance that this requirement would put her outside of her jurisdiction as governor. She and her staff exchanged letters with the DOE in attempt to clarify the possibility of the Missouri option, and the degree to which the state would be required to oversee code implementation and compliance.

The DOE admitted that the code mandate wasn’t appropriate for all states, but said the Missouri option was part of the Missouri governor’s “broader commitment” to “work proactively” with communities and the legislature to improve energy efficiency, implying, perhaps, that despite Alaska’s success in these areas, the governor’s personal involvement was non-negotiable. Revisions were offered, but Palin was still dissatisfied with the DOE’s language. Proponents of taking the money suggested that the DOE’s revisions required the governor to work “within the extent of her authority” to promote the building codes, not to actively enforce them. Palin didn’t agree with this interpretation, saying she didn’t want the role of dictating or influencing local policies.

As a state with a cold climate and an economy vulnerable to volatile fuel prices, Alaska has indeed taken its own steps to improve energy efficiency in recent years. In addition to independently adopted energy codes in most of the major cities and hundreds of millions budgeted for state energy projects, there has been an admirable home energy rebate program in place for several years; homeowners can have their houses audited for energy efficiency and be reimbursed up to $10,000 for making recommended improvements.

It’s hard to imagine, though, that the legislature’s motives in opposing Palin’s decision were entirely pure. Palin and the legislature had a combative relationship over budget issues for most of her tenure as governor, and this was an opportunity for them to demonstrate their clout. It's telling, too, that the legislature rejected Parnell’s proposal to extend their special session (which was held primarily to overturn Palin’s veto) by one day in order to extend a year-long suspension of the state’s 8-cent gas tax, which will now be reinstated September 1. The legislature may choose to suspend the gas tax again when the regular session begins in January, but their lack of urgency to act on the issue undermines their claim that the stimulus funds are urgently necessary to help keep Alaskans’ energy costs down.

Of course, Palin’s own stance has been calculated as well. She initially wanted to decline roughly half of Alaska’s $930 million allotment, and her vocal anti-stimulus statements garnered national attention, which helped establish her as a critic of the Obama administration in her own right, independent of her role in McCain’s presidential campaign. By the time the smoke cleared, however, she was rejecting only this $28.6 million. Critics have said that it looks like a token amount, chosen to make a strategic political statement.

In her op-ed piece, she noted that during her time as a Wasilla city council member and then mayor, the city experienced a boom in growth that made building codes an issue of great contention. Wasilla is notably missing on the list of major communities that have independently adopted energy codes, which would suggest that it would be one of the key cities that would have problems with a statewide energy code.

After the legislature’s vote, Sean Parnell wrote to the DOE accepting the funds, noting his own disapproval of the mandates. He quoted an August DOE statement that the state legislature “does not need to adopt, impose and enforce a statewide building code in order to qualify,” making clear that he was accepting the funds on the basis of that statement. He also provided the DOE with “assurances”, not that state or local codes would be adopted, but that the Regulatory Commission of Alaska “will seek to implement general policies to promote energy efficiency and maintain just and reasonable rates while protecting the public.”

Ultimately, if Alaska holds its ground and does not adopt the IECC, Palin and the legislature may have unwittingly conspired to successfully challenge the federal government’s encroaching influence on the state’s affairs. Perhaps not coincidentally, the legislature unanimously passed a 10th amendment state sovereignty resolution while they were hashing out the stimulus funds controversy, and Palin signed it weeks before resigning as governor. It will be interesting to see how the DOE handles Alaska’s obstinance...and how the Alaska legislature responds if the DOE calls their bluff down the road and asks how the codes are coming along.

Andrea Gregovich is a writer and translator living in Anchorage.