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FNG, RAPA, object to FNSB requested stay Fairbanks Natural Gas, Attorney General’s Regulatory Affairs and Public Advocacy section, both oppose Fairbanks North Star Borough Kristen Nelson Petroleum News
The Fairbanks North Star Borough has drawn objections to its Feb. 4 request for a stay in two interrelated cases pending before the Regulatory Commission of Alaska.
After the Alaska Industrial Development and Export Authority said it in late January that it proposed to purchase Pentex Alaska Natural Gas Co. and its subsidiaries, including Fairbanks Natural Gas, the borough asked RCA to stay the cases involving FNG until the state reached a conclusion.
AIDEA signed a non-binding letter of intent Jan. 26 for the purchase of Pentex, which is the holding company for several subsidiaries, including FNG, which supplies natural gas to Fairbanks, and Titan Alaska, which owns an LNG plant at Point MacKenzie which supplies liquefied natural gas for FNG’s Fairbanks customers.
AIDEA told legislators in early February that the purchase is subject to a full due diligence review and will then be submitted to the AIDEA board for consideration.
Two cases RCA is reviewing two cases involving FNG, the first a rate case which would put the utility - which supplies some 1,100 customers in Fairbanks - under economic regulation for the first time in more than a decade, and raise its rates by 6.92 percent, and the second a proposed supply agreement with Harvest Alaska LLC, a subsidiary of Hilcorp Alaska LLC.
In its request for a stay, the borough told RCA that the timeline for the sale means that, if it goes through, it would close before or during hearings in the cases, “potentially making all parties’ efforts unnecessary.”
The impact of the sale could include potential exemption of AIDEA from economic regulation, the basis of the rate case, and an unclear impact on Harvest’s acquisition of the Cook Inlet LNG facility from Titan. Approval of the gas supply agreement, the subject of the other case, is a pre-condition of the sale.
RAPA opposition The Office of the Attorney General, Regulatory Affairs and Public Advocacy section, said in a Feb. 17 filing that it opposed the stay in proceedings because FNG had not agreed to extend the deadlines in the dockets for the two proceedings, which “imperils the viability” of the Sept. 22 deadline in one of the cases.
It also said a stay would be premature because AIDEA’s letter of intent is non-binding and the purchase may not proceed.
“The time to consider a stay is when the parties are informed that the AIDEA purchase is a binding agreement,” RAPA said.
It also said that while RCA could stay the dockets, statutory deadlines would continue to run, leaving “little if any time” to adjudicate the dockets if the AIDEA deal does not proceed, further complicated since a delay would require RCA to find time on its schedule for hearings, currently schedule to begin in late July and end in early August.
FNG opposition FNG also cited the pending nature of the AIDEA purchase in its objection to the borough’s motion for a stay, and said RCA “should deny the motion, but revisit the schedule in this rate case if at a future time AIDEA does file an application to acquire a controlling interest.”
Attorneys for FNG noted the company filed for increased rates and a redesign of its current rate structure June 30, 2014, which would have required a decision from RCA prior to Sept. 23, 2015. FNG said it agreed to an extension until Dec. 14 for the final order.
FNG’s attorneys told the commission the company “has a statutory right to have its rate case decided in a timely manner.” All parties agreed to a schedule and if it is “delayed significantly, there will simply not be time to properly litigate the rate case and reach a decision” by the Dec. 14 date.
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