House Resources moves AGDC changes

Alaska Gasline Development Corp. wants authority for confidentiality agreements; ANGDA removed over potential conflicts of interest

Kristen Nelson

Petroleum News

The Alaska Legislature is moving a bill that makes some changes to the Alaska Gasline Development Corp. which it set up last year. AGDC, established as a subsidiary of the Alaska Housing Finance Corp., is charged with reporting to the Legislature July 1 on a proposal to build an in-state natural gas pipeline which would be operational by Dec. 31, 2015.

The House Resources Committee moved out a bill March 21 which changes the membership of the joint in-state gasline development team established under AGDC and allows AGDC to enter into confidentiality agreements so that information acquired by the corporation to develop the report to the Legislature would not be subject to public disclosure.

House Bill 189, introduced March 10 by House Speaker Mike Chenault, R-Nikiski, allows the seat designated for the chair of the board of directors of the Alaska Railroad Corp. to be filled by the chair’s designee, and removes the CEO of the Alaska Natural Gas Development Authority.

House Bill 369 which established AGDC last year named five team members: The executive director of AHFC (named chair of the development team in the bill); the commissioner of the Department of Transportation and Public Facilities or the commissioner’s designee; the chair of the board of directors of the Alaska Railroad Corp.; the CEO of the Alaska Natural Gas Development Authority; and the in-state gasline project coordinator.

Railroad, ANGDA changes

The railroad change accommodates the fact that the board has a new chair, Linda Leary of Carlile Transportation Systems, allowing the former chair, John Binkley of the Alaska Cruise Association, to remain as a team member.

The ANGDA change addresses a point of contention between AGDC and ANGDA.

ANGDA bid in open seasons held last year — after passage of HB 369 — for pipeline capacity on behalf of electric utilities in both the TransCanada and Denali pipeline projects and has indicated it would also bid for capacity on behalf of the utilities in an in-state gas pipeline.

AGDC maintains this creates a potential conflict of interest and while ANGDA has not agreed, ANGDA CEO Harold Heinze recused himself from the team last year.

When AGDC President Dan Fauske and the ANGDA board discussed the issue last fall, then Deputy Commissioner of Revenue Marcia Davis said separation of pipeline and shipper is a legal principle developed by the Federal Energy Regulatory Commission at a time when large conglomerates with both shipping and pipeline interests were giving sweetheart deals to affiliates.

In discussion of the bill the removal of ANGDA was said to be because of potential conflicts of interest.

Confidentiality most controversial

Fauske told the committee that the provision allowing AGDC to sign confidentiality agreements will allow it to get information it needs from other agencies and private companies in order to complete its report to the Legislature.

He said when he first took the AGDC job weeks were spent hammering out details of an agreement with Enstar over use of that company’s data. He said it’s much easier with a confidentiality agreement.

House Resources co-Chair Paul Seaton, R-Homer, said he was concerned that the Legislature not get itself in the box it’s in with the Alaska Gasline Inducement Act. He said he wanted to make sure that confidentiality agreements don’t result in data being withheld from the Legislature.

Fauske said AGDC would be handing a report to the Legislature with a recommendation. He said the bill gives AGDC the ability to gather information. AGDC won’t be able to hand over all of the information covered by the confidentiality agreements, but Fauske said the report will contain background information explaining why the decision was made.

The committee amended the bill to sunset AGDC’s confidentiality agreements on Dec. 31, 2011.