FNSB asking for stay in rate case

The Fairbanks North Star Borough wants regulators to stay two interconnected cases involving Fairbanks Natural Gas LLC until a sale of the utility reaches a conclusion.

The borough wants the Regulatory Commission of Alaska to pause both cases while the Alaska Industrial Development and Export Authority works to close on its acquisition of Pentex Alaska Natural Gas Co. LLC and its subsidiaries, which include Fairbanks Natural Gas and its affiliates. Should the deal go through, many of the issues at play in the rate case would become moot, according to Fairbanks North Star Borough counsel.

Two matters at RCA

The first is a complex rate case, through which the utility would be undergoing economic regulation for the first time in more than a decade and is seeking a 6.92 percent increase in its rates. The second is a proposed supply agreement with the Hilcorp Alaska LLC subsidiary Harvest Alaska LLC that would influence supplies for at least a decade.

If the sale proceeds on the timeline proposed in a recent letter of intent, the parties would close before hearings in those cases begin, or during the hearings, “potentially making all parties’ efforts unnecessary,” attorneys for the borough wrote in a Feb. 4 RCA filing.

The sale would impact those cases, in part because AIDEA might be exempt for economic regulation, similar to the way other government-owned utilities are exempt.

Additionally, Harvest is in the process of acquiring a Cook Inlet liquefied natural gas facility from Pentex-subsidiary Titan Alaska LLC. Approval of the gas supply agreement by this summer was one of the pre-conditions of the sale. It remains unclear how the proposed sale of Pentex would impact the proposed sale of the facility to Harvest.

AIDEA has said its purchase would not displace any existing Pentex obligations.

- Eric Lidji