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Vol. 13, No. 29 Week of July 20, 2008
Providing coverage of Alaska and northern Canada's oil and gas industry

House AGIA vote likely week of July 21

Wielechowski asks if bill to OK Trans-Canada application could be made effective at a later date, could MOU be added

Kristen Nelson

Petroleum News

The Alaska House of Representatives looks likely to vote on granting an AGIA license to TransCanada Alaska the week of July 21.

Extensive legislative hearings on the Alaska Gasline Inducement Act license began in June during the first special session of the summer and continued into the second special session, which convened July 9. Joint House-Senate hearings wrapped up July 14.

House Majority Leader Ralph Samuels, R-Anchorage, said at that time that the bill approving the AGIA license, House Bill 3001, would be taken up in House Rules July 21 and would then move to the House floor.

AGIA gives legislators 60 days to approve an AGIA license, once the governor recommends issuance; that window closes Aug. 2.

Senate Rules Chairman Gary Stevens, R-Kodiak, told The Associated Press the Senate will let the House vote first, and said he believes that if the House passes the bill, there are enough votes in the Senate to pass it.

House Speaker John Harris, R-Valdez, told the Anchorage Daily News that while he is likely to vote no, he believes there are 25 to 26 votes in the House in favor of the TransCanada license.

Continuing legal questions

At one of the last joint hearings, July 13, Don Bullock of Legislative Legal Services, and Bonnie Harris, senior assistant Attorney General for oil, gas and mining, responded to questions about changes that could be made to the bill approving the AGIA license.

Sen. Bill Wielechowski, D-Anchorage, asked if the Legislature amended AGIA or changed the effective date, would the state have to go out with a new request for applications.

Bullock said one of the first steps in the AGIA process was for the commissioners to certify that an application was complete. “If the requirements are changed then the application is not complete and we’d have to start over.”

“It would effectively void where we are today” if the commissioners no longer have a complete application because applicants didn’t address requirements that previously didn’t exist, Bullock said. Not only would TransCanada be affected, but so would companies that decided whether to apply based on the original request for applications, he said.

Could effective date change?

Wielechowski asked what would happen if the Legislature changed the effective date, for instance saying the TransCanada license was approved, but the license wasn’t effective until Jan. 1.

Bullock said part of the expectation in the existing requirement of legislative action within 60 days of receipt of the license is that the applicant would know within a certain period of time whether or not they had the license.

Harris said the bill is effective immediately.

If the effective date were changed to Jan. 1, then there would be issues with the TransCanada application, since the company committed that the application would be good for nine months from the due date, Nov. 30. If the effective date were changed to Jan. 1, she said, it would be up to TransCanada whether to continue with the process if issuance of the license was delayed beyond the nine months.

Bullock said there is no effective date required in the statute. “I think the intent was to avoid the issue of an insufficient vote to make the bill effective immediately,” he said.

The legislative action of passing the bill by both houses within 60 days satisfies the 60-day requirement; when the bill becomes law the commissioners are authorized to issue the license.

Letter of intent?

Wielechowski asked if the Legislature could add a letter of intent to the bill.

And could the Legislature add a memorandum of understanding it agreed to with TransCanada to clear up ambiguities?

Bullock said a letter of intent is not law, although it may help interpret the law by expressing a hope, as the Legislature did with an uncodified section of AGIA which says it is the Legislature’s intent that the courts give expedited consideration to anything related to AGIA. “But it’s not binding on the courts; it’s no more than a hope,” Bullock said.

As for ambiguities within AGIA or within the request for applications, he said there is probably room for the administration and TransCanada to clarify any ambiguities that didn’t change the fundamental terms of AGIA.

Because of separation of powers, the MOU would be between the executive branch — which will issue the contract — and TransCanada, should the license be approved, Bullock said.

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