Wrangell’s borough assembly last month voted to indefinitely shelve the proposal that would’ve provided a sales tax waiver for residents heating their homes with diesel fuel.
Borough Manager Mason Villarma says that his recommendation to abandon the proposal was driven by private conversations with assembly members and residents who highlighted concerns over discounting fuel oil heat over other energy sources.
Here’s Villarma in an Oct. 28 interview.
A lot of folks had switched over to heat pumps or electrical boilers back in the day, there was a cost associated with doing that, and for the city to offer an incentive for those folks that are on diesel or heating oil was kind of counterintuitive and counterproductive to our overall goal of trying to get more folks to use electric heat.
The proposed temporary ordinance would have waived Wrangell’s 7% general sales tax for kerosene and diesel heating fuels delivered this winter. The borough’s intention was to help alleviate the burden of rising diesel costs, but it would have contradicted prior initiatives pushing users toward electric heat.
There have been a variety of incentives aimed at encouraging residents to transition over to electric heat systems over the years. These have included an electric heat rate starting in 2002 which separately metered power for heat and hot water as an incentive to transition to electric boilers. That rate is set to go away at the end of fiscal year 2027.
More recently, the Southeast Conference received a federal grant and teamed up with Alaska Heat Smart to offer rebates for households that transition from heating fuel or wood stoves to electric heat pumps.
Villarma had cited rising diesel prices as a good incentive to transition to electric heat at a borough assembly meeting this past April. It was part of a discussion on implementing a flat electric rate for residential users.
That certainly benefits the borough and we’re able to drive rates down collectively when we have a maximization or max utilization of our shared resource at Tyee.
He says that the more residents transitioning to electric heat would drive down the collective electricity rates for everyone.
