Finance Looks At In-State Gas Bill

By Dave Donaldson

A bill that would kick-start work on an in-state gasline from the North Slope to railbelt communities is getting its final review before going to the House floor. 

The bill by Speaker Mike Chenault would combine studies already done by various state agencies,  turn the final development over to a new team of leaders,  and set a deadline for plans in July of next year  and another deadline to see gas flowing in 2015.

In presenting his plan to the House Finance Committee,  Chenault said his bill is not an attempt to impede the large gas line under development to North American markets,   but he says the state needs to be ready for whatever happens to that project.

Alaskans think it’s time, Mr. Chairman.  They think it’s time for in-state gas, They want security in their energy form.  And they want jobs that are associated or could be associated with the project.

Early studies have shown that gas, delivered through a direct line providing service to South Central and Fairbanks,  would be much more expensive than taking gas off the large gasline – or AGIA – project.  Anchorage Democrat Les Gara told Chenault that his biggest concern is that customers could be contractually locked into the higher rates.

Gara:  What do I say to my consumers if I’ve obligated them to gas through this line, and all of a sudden in 2025 gas at half the price starts flowing past them and they’re not able to access it because they’re obligated to the higher price gas on this line:

Chenault:  Rep. Gara, through the chair,  what do you tell your constituents in 2015 or 2018 whenever they run out of gas?   So, I guess the argument can be made either way.  I think we need to be ready Mr. Chairman to have a project that is available and ready to go online.

Bob Swenson,  the governor’s in-state gas line project manager,  said  his office is already doing much of the work called for in the bill and is on a similar schedule as Chenault’s bill would require.  He calls the work already underway “insurance” for whatever happens to the bigger project – and it can be done jointly with those developing the big line.

I think the investment that the state is making currently is a reasonable investment for that insurance.  And that’s why the governor is so focused on us getting this work done – and getting it done in a timely manner.   What we will be producing is the cost of transportation which will feed in to cost of service.  And we will have a much better understanding of what the best options that we have for an in-state gas line are.

The bill will be back before the Finance Committee,  but it hasn’t been rescheduled yet.


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