Gov. proposes to give Alaskans $100 a month for gas

ANCHORAGE, Alaska (Reuters) - Faced with some of America's highest energy costs, Alaska Gov. Sarah Palin proposed a plan on Thursday to provide state residents with special debit cards good for $100 of fuel every month.

The Republican governor said the money will come from the state's treasury, fattened by record oil prices.

"It's really atrocious the situation that Alaskans are in today, where we, as the owners of the energy resources, are paying outrageous prices for the use of those resources," Palin said at a news conference.

Earlier this week, Alaska became the first U.S. state with average retail gasoline prices exceeding $4 a gallon, according to the American Automobile Association.

Costs are particularly high in rural parts of the state, where many isolated Native villages rely on diesel and pay utility rates that are more than five times the national average.

At the same time, the energy-rich state expects a budget surplus of $2.7 billion, mostly due to oil prices exceeding $120 a barrel.

"It's not right when the state sees money pile up in Juneau (state capital) while the people of the state pay higher and higher costs to use the energy resources that they own," Palin said.

The governor's plan also includes direct state grants to local utilities, aimed at reducing ratepayers' bills by 60 percent, and year-end state contributions to utilities for every 1 percent in reduced kilowatt hour usage posted in 2008.

The plan requires approval from the state legislature, which will be convening next month for a special session on natural gas issues. Palin said she hopes the program will be in effect by fall with cards going to residents by September.

Palin said her program is meant to last only a year until state officials find a more permanent solution to the energy crunch being suffered by residents.

A state task force has already convened to enact conservation measures and find alternative energy sources.

(Editing by Daisuke Wakabayashi, Gary Hill)