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RCA grants certificate for Nuiqsut pipeline
The Regulatory Commission of Alaska has granted a certificate of public convenience and necessity to the North Slope Borough for the natural gas pipeline from the Alpine field to the village of Nuiqsut. Nuiqsut is using natural gas from Alpine to replace the expensive diesel fuel for heating and electricity generation.
In May the commission granted the borough a certificate to operate the gas distribution network within Nuiqsut, but the granting of a certificate for the pipeline that transports gas to the village encountered issues over how the pipeline should be regulated.
In 2001 RCA had granted the North Slope Borough’s request that the pipeline be regulated as a public utility. However, when it subsequently transpired that the state right-of-way lease required the pipeline to operate as a common carrier line RCA had to deny the certificate and initiate the process for regulating the pipeline as a common carrier.
Following a public hearing in June, RCA has now granted the certificate as a common carrier line for the line. And the commission has denied a borough request to exempt the pipeline from economic regulation, saying that Alaska statutes do not allow exemption.
But, because the commission is currently considering simplifying the regulation of tariffs for pipelines such as Nuiqsut, RCA has deferred until Feb. 14, 2008, the requirement for the borough to file a tariff for the pipeline.
“NSB may qualify to file a simplified tariff depending on the regulations we adopt,” RCA said.
ARCO deal The gas project in Nuiqsut stems from surface land use access that ARCO Alaska (now ConocoPhillips Alaska) negotiated for the Alpine oilfield facilities. ARCO struck a deal with Kuukpik Corp., the Nuiqsut village corporation, to supply natural gas from Alpine to Nuiqsut in return for using Kuukpik land.
For its part of the deal, Nuiqsut had to provide the pipeline and facilities for processing the gas and Nuiqsut turned to the borough. The borough analyzed the cost and determined that in spite of high infrastructure costs it would save a considerable amount of money by using natural gas rather than diesel.
The borough funded the transportation system through bonds; the distribution system was funded by National Petroleum Reserve-Alaska impact aid grant funds.
—Alan Bailey
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