By Dave Donaldson
The Legislature is looking at ways to improve the energy stability of SouthCentral Alaska. House Speaker Mike Chenault and Finance Co-Chair Mike Hawker have prepared what they call the Cook Inlet Recovery Act for introduction in the session that begins later this month.
The bill provides tax incentives for gas exploration in Cook Inlet and for gas storage facilities to make use of year-round production.
Speaker Chenault, from Kenai, says the bill recognizes the high cost of drilling in the area – despite state estimates of a high volume of gas to be discovered.
We’re looking at ways to incentivize producers to come into Cook Inlet and explore for gas. You know, we don’t have all the parts and pieces, how much, what’s it going to take; that’ll be done through negotiations, but certainly we think we’ve go to be in the forefront and work toward insuring that SouthCentral doesn’t run out of natural gas on that coldest day in January or February when it’s forty below.
Chenault says he has had talks with producers and explorers in the region to determine what they need to go into production.
The bill also addresses what many see as a state roadblock to future exploration – recent rulings by the Regulatory Commission of Alaska. Chenault says the RCA has rejected several negotiated supply contracts between producers and local utilities. The bill directs the Commission to consider the public benefit of having gas available rather than insisting on a specific pricing method. He says he recognizes that price increases might be necessary to cover the costs of exploration and production.
The RCA shouldn’t stand in the way of contracts. Certainly they’re there for one reason and that is to make sure that consumers are protected. But you can be so zealous in one direction that your protection of the consumers ends up in turning the heat off in a consumer’s home in the middle of the winter.
Chenault says the goal of the legislation he’s offering is to make certain that SouthCentral doesn’t go cold in the middle of the winter.
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