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Interior energy bill passes, but Senate cuts out House projects
The Alaska Legislature has passed and sent to Gov. Bill Walker a bill that would allow the Interior Energy Project to use gas from anywhere in the state. When the project was authorized in 2013 it was to be a North Slope liquefied natural gas project, with natural gas from the Slope turned into LNG there and trucked to Fairbanks.
The Alaska Industrial Development and Export Authority was in charge of the North Slope LNG project, but dropped it late last year because the burner tip cost to Interior consumers would have been too high. AIDEA was unable to proceed with a Cook Inlet based plan because of the statutory limitation of the original authorization.
General AIDEA cleanup House Bill 105, an administration bill, also provides increases in AIDEA bonding authority and removal from statute of some old bond authorizations which AIDEA had not used, but which impacted the agency’s current bonding authority.
The House added AIDEA bonding authority for several projects, authorizations which were removed in the Senate: a Point MacKenzie bulk commodity loading and shipping terminal; a hydroelectric project at Sweetheart Lake; rebuilding of Railbelt transmission facilities; and a hydroelectric project at Waterfall Creek for the City of King Cove.
Reports required The Legislature added a requirement for quarterly written reports by AIDEA on the Interior Energy Project to the Legislature, including: project progress on all components; the status of local infrastructure build out; conversions to natural gas to date and anticipated; and an accounting of funds spent and anticipated to be spent.
If requested, AIDEA is also to present a project briefing to the Legislative Budget and Audit Committee.
That report is required through June 30, 2025.
Limitations Intent language provides that the geographic flexibility provided will be used only to advance the Interior Energy Project previously authorized by the Legislature, and specifies that AIDEA “use an open and competitive solicitation process to select private entities to participate in developing” the LNG capacity and infrastructure for the project.
There are also some limitations on AIDEA’s ability to contract for natural gas without legislative approval unless that natural gas is to serve Interior consumers.
The bill also prohibits AIDEA from purchasing or acquiring gas reserves or a gas lease or becoming a working interest owner in a natural gas lease.
And AIDEA’s ability to engage in a pipeline is limited to distribution lines or a pipeline with a diameter of 12 inches or less transporting natural gas to Interior Alaska.
A project plan, approved by resolution by AIDEA’s board, must identify the source of natural gas; include the estimated cost of the project; and “include the estimated price of natural gas supplied to natural gas utilities in Interior Alaska before distribution to consumers.”
The scope of the project has also been expanded to include propane.
Thanks from Walker Gov. Bill Walker thanked the Legislature for passage of the bill.
“The high cost of heat and electricity is a tremendous burden for many Interior residents,” he said in an April 27 statement. He also noted the poor air quality in the Fairbanks North Star Borough, and said delivering natural gas to the Interior will provide a cleaner source of fuel for home heating and energy.
“The economic future of the Interior depends on low-cost energy being delivered to its residents,” the governor said. “At the end of the day, conditions in Fairbanks have not changed, and relief in the form of clean, affordable energy is needed now. HB 105 provides a clear path to accomplish that.”
- Kristen Nelson
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