On July 19, 2021, a coalition that includes the Alaska Federation of Natives, electric cooperatives, and several local governments[1] filed a lawsuit against Alaska Governor Mike Dunleavy (R) to demand that his administration release money intended to subsidize power bills in rural Alaska.[2] The Power Cost Equalization Endowment Fund is a program that reduces rural customers' electric rates to levels comparable to those paid in urban areas of Alaska. The program reimburses utilities for credits they extend to customers. The Power Cost Equalization Endowment Fund serves more than 80,000 citizens who are largely reliant on diesel for power generation. According to the Department of Revenue, the fund was valued at about $1.2 billion as of June 30, 2021.

The lawsuit claims that in 2019 the Dunleavy administration identified without "any legal explanation or justification" a larger list of accounts, including the Power Cost Equalization Endowment Fund, to be swept into the budget reserve compared to previous administrations. A budget reserve is a fund set aside to meet short-term deficits. The sweep happens automatically, and actions to reverse it and return funds to the accounts require three-quarters of legislators to pass. The legislature did not meet the three-quarter vote requirement in June 2021 amid a budget dispute. The attorney for the plaintiffs said that issue isn't with the failed vote but with the administration's decision to sweep money from the endowment fund into the budget reserve.

[1] Alaska Federation of Natives, First Alaskans Institute, Association of Village Council Presidents, Aleutians East Borough, Organized Village of Kake, City of Saint Paul, City of Adak, City and Borough of Yakutat, City of Sand Point, Alaska Village Electric Cooperative, Inn Electric Cooperative, Inside Passage Electric Cooperative, Kotzebue

Electric Association, Naknek Electric Association, Nushagak Electric & Telephone Cooperative, Unalakleet Valley Electric Cooperative, Cordova Electric Cooperative, and Tanalian Electric Cooperative

[2] https://public.courts.alaska.gov/web/media/MRCF/3AN-21-06737CI/complaint.pdf