|
Bill would direct $2 billion to AIDEA McGuire’s SB 25 would enhance Alaska lending agency’s ability to fund energy projects statewide; bill has utility sector focus Wesley Loy For Petroleum News
Alaska Sen. Lesil McGuire is sponsoring legislation to inject $2 billion into a state lending agency to finance “energy infrastructure projects.”
McGuire, an Anchorage Republican, calls her bill the Alaska Sustainable Strategy for Energy Transmission and Supply Act, or ASSETS.
Senate Bill 25 would direct $2 billion in excess state revenue over the next three years into the Alaska Industrial Development and Export Authority, and would increase the agency’s authority to issue bonds for energy projects to the $2 billion level.
The bill appears oriented mainly toward the electric power utility sector as opposed to the oil and gas industry, and a McGuire aide confirmed that.
SB 25 defines “energy project” as one involving “the transmission, generation, or distribution of electricity or natural gas for use in the state.”
A better investment McGuire introduced SB 25 on Jan. 7. The state Legislature opened its 2011 session on Jan. 18.
“Billions of dollars need to be invested in energy infrastructure over the next ten years in every part of Alaska,” McGuire said in a press release.
The state would be wiser to put $2 billion into AIDEA than to stash the money in state savings accounts such as the Constitutional Budget Reserve.
“By investing in AIDEA instead of continuing to overcapitalize the Constitutional Budget Reserve, we can continue to save surplus money while putting our assets to work in Alaska,” McGuire said. “ASSETS is based on the fact that simply spending surplus money is unsustainable and the current method of investing in stocks and bonds does little to actually benefit Alaskans.”
McGuire’s press release said that under her bill, AIDEA would invest in projects “that can range from interties and generation projects to gas pipelines and transmission systems.”
She noted that AIDEA already invests in energy and other projects, citing the Snettisham hydroelectric power plant near Juneau as an example, and returns an annual dividend to the state.
SB 25 could allow AIDEA to “substantially increase” its dividend and generate recurring revenue to fund renewable energy grants and other programs, the press release said.
Receptive response Asked about SB 25, AIDEA spokesman Karsten Rodvik told Petroleum News: “We cannot be certain what will happen in this session, but AIDEA would be well-prepared to undertake an expanded role in financing energy infrastructure projects for Alaska. Our financing expertise, underwriting abilities and conservative balance sheet management principles are widely known and respected.”
The bill replaces the words “power transmission intertie” in existing law with the broader term “energy project.” The bill also increases AIDEA’s bond authorization from $400 million per year to an overall cap of $2 billion for energy infrastructure projects, a bill description from McGuire’s office said.
AIDEA could participate directly in energy projects, the description said, or private financial institutions could originate loans to utilities with AIDEA then purchasing up to 95 percent of the loan from the financial institution.
“AIDEA can offer a lower interest rate on the portion of the loan it assumes,” the bill description added.
| 