(a) The power cost equalization and rural electric capitalization fund is established as a separate fund for the purpose of

1. (1) equalizing power cost per kilowatt-hour statewide at a cost close to or equal to the mean of the cost per kilowatt-hour in Anchorage, Fairbanks, and Juneau by paying money from the fund to eligible electric utilities in the state; and
2. (2) making grants to eligible utilities under AS 42.45.180 to improve the performance of the utility.

(b) The fund shall be administered by the authority as a fund distinct from the other funds of the authority. The fund is composed of

1. (1) money appropriated to provide power cost equalization to eligible electric utilities and to provide grants for utility improvements;
2. (2) money appropriated from the National Petroleum Reserve — Alaska special revenue fund under AS 37.05.530(g);
3. (3) money appropriated from the power cost equalization endowment fund (AS 42.45.070) under AS 42.45.085(a);
4. (4) gifts, bequests, contributions from other sources, and federal money; and
5. (5) interest earned on the fund balance.