Fairbanks utility to buy North Slope LNG

A Fairbanks electric utility has agreed to buy the natural gas that is expected to be trucked into the city by 2012.

The policy board of the Golden Valley Electric Association on March 29 approved a 15-year contract with the Alaska Gasline Port Authority — a partnership of municipalities taking out $250 million in loans to buy Fairbanks Natural Gas, build gas processing plants and truck natural gas down from the North Slope.

The contract is valued at $12 million to $15 million per year, and the port authority will provide about 10 percent of the utility’s fuel.

Officials who worked on the deal said natural gas customers eventually could see their electric bills cut by 30 percent because of increased supply. Roughly 1,100 homes and businesses in Fairbanks are hooked up to natural gas and the utility is primed to expand into more neighborhoods.

The nonprofit utility hired an independent consultant from Maine to evaluate the port authority’s plan, and its board met privately with officials from a North Pole refinery before approving the gas contract.

“This is going to be good for our members and good for the Interior,” said Bill Nordmark, chairman of Golden Valley’s board.

About 30 people attended the meeting and all who testified asked Golden Valley to OK the contract. One of them was Lisa Gambardella, a restaurateur.

“Maybe we are going to miss an opportunity with a better prom date,” she said, referring to a possible natural gas pipeline. “But maybe we should take a swing on the dance floor with this one.”

The plan still needs approval from the Regulatory Commission of Alaska.

—The Associated Press