Kerttula raises concerns about bill on in-state gas pipeline

Lawmaker says measure gives agency too much authority.

Associated PressJanuary 31, 2012 

JUNEAU -- A proposal intended to advance an in-state natural gas pipeline project goes too far in giving too much authority to the Alaska Gasline Development Corp., the leading House Democrat said Tuesday.

Rep. Beth Kerttula, D-Juneau, said she has "terrible concerns" about HB9, which she said isn't the answer to the energy reliability and cost concerns that so many Alaskans face. "To say that this is overboard in the powers that would be given to one entity is putting it way mildly," Kerttula told reporters during her caucus' regular news conference.

The proposal, a work draft of which was unveiled last week, would give the gas line group, also known as AGDC, the ability to issue bonds and exercise eminent domain, among other things. It also would allow for an exemption from certain oversight by the Regulatory Commission of Alaska, as well as from state and local taxes during project construction.

Rep. Mike Hawker, a co-sponsor of the proposal, said the provisions contained in the measure are the kind needed to get a mega-project under way. He said he was terribly concerned to hear that the minority caucus "is challenging the development of Alaska's in-state gas line.

"This is an issue that is critical to the entire Railbelt," Hawker, R-Anchorage, said, referring to Alaska's most populated area. He said the project is being developed using best practices.

Consumers would still be protected by the regulatory commission, he said.

AGDC recommended it receive ratemaking authority over its projects in its pipeline plan, saying it needs "sole right" to determine ratemaking methodology and to settle tariff disputes for intrastate gas shipments.

Joe Dubler, a vice president and chief financial officer for AGDC, said bondholders would get repaid from tariffs. If the regulatory commission were able to reduce the tariff, that could hurt efforts to repay the bond holders, Dubler said. That's why he said an exemption -- like the one included in the draft -- was sought. Twenty years of financing is anticipated, he said.

The Legislature and governor would still have oversight of the project, Dubler said.

Eminent domain would apply only to the project's corridor, and Dubler said AGDC wouldn't do anything the state wouldn't do if it were, say, building a road.

"But for a $7.5 billion project to bring gas to 400,000 Alaskans, there's going to be some costs, and that's going to be some of them," he said, referring to an example of a cabin that may need to be taken.

"That's unfortunate," he said, "but that's just the way it goes."

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