Fauske leaves AHFC to focus on gas line development

Lisa Demer
Dan Fauske, outgoing CEO and Executive Director of Alaska Housing Finance Corporation, testifies on the Home Energy Rebate Program before the House Finance Committee Friday April 29, 2011 at the Legislative Information Office in Anchorage.
Erik Hill

Dan Fauske, longtime head of the Alaska Housing Finance Corp. and since 2010 in a dual role as the point man on an in-state natural gas pipeline, on Wednesday was tapped to focus solely on the pipeline.

His task: Develop a pipeline from the North Slope through the Interior to Southcentral Alaska to bring natural gas to Alaskans.

Bryan Butcher, state revenue commissioner for the past 21/2 years and a frequent target of legislators over the Parnell administration's push to slash oil taxes, will replace Fauske as AHFC chief executive officer. He sent in his resignation Tuesday evening.

Fauske, 62, said his salary in his new job as president of the Alaska Gasline Development Corp. hasn't changed. He currently makes about $350,000 a year. His salary could go up to $375,000 under pipeline legislation approved by the Legislature this year.

Butcher, 49, is getting a huge pay raise, from his current commissioner's salary of $135,000 to $250,000.

The decisions were announced Wednesday by a board that currently serves both the Alaska Housing Finance Corp. and the Alaska Gasline Development Corp. Fauske has been chief executive of both.

The Legislature this year approved a measure to push a small-diameter gas pipeline project forward, in part by moving the Alaska Gasline Development Corp. out from under the housing corporation.

Both are state-chartered corporations overseen by the Legislature, and they operate under different rules than regular state departments. For instance, the gas line agency is exempt from the state procurement code. Staff members technically are not state employees, though they participate in the state retirement system. Salaries at the Alaska Housing Finance Corp. and the gas pipeline agency have been under scrutiny by lawmakers.

Gov. Sean Parnell was pleased with the transitions, his spokeswoman, Sharon Leighow, said in an email.

In a written statement, the governor referred to Fauske's "extraordinary management abilities." He said Butcher's "outstanding leadership" led to passage of Senate Bill 21, the oil tax cuts now being called the More Alaska Production Act.

In his 18 years at the housing agency, Fauske built a stellar reputation among lawmakers from both parties -- he's sometimes called the "czar of competence" -- but Butcher often butted heads with legislators.

"I'm a fan of Dan Fauske. I think he's done a phenomenal job," said Sen. Bill Wielechowski, an Anchorage Democrat who has criticized the small gas pipeline project and who often challenged Parnell and Butcher over the oil tax cuts. "If there's anyone in state government that can make that gas line project happen, it's Dan Fauske. He's tremendously competent."

Butcher has come in for bipartisan criticism in the Legislature. During a 2012 special session on oil taxes that fell apart, Sen. Lesil McGuire, an Anchorage Republican now running for lieutenant governor, advised Butcher to work harder.

"It's frustrating because you're in a position where you're trying to sell a bill that I just don't feel like you understand the ins and the outs of," McGuire said to Butcher during a Senate Resources Committee hearing.

Wielechowski said Butcher failed to answer legislators' questions about the implications of the tax cut and as the senator sees it, botched the legislation, which the state has estimated could cost the state $1 billion a year if more oil isn't produced.

"They never made the case and in the end they still never made the case. They got a different legislature," said Wielechowski, who frequently is mentioned as a possible candidate for governor next year. He said he hasn't decided whether to challenge Parnell.

Butcher previously worked eight years under Fauske at AHFC and did a good job there, Wielechowski said. It makes sense for him to move back, but he doesn't deserve a near doubling of his salary, the senator said. AHFC salaries are generous compared to those at standard state agencies, he said, pointing to an analysis earlier this year in the Alaska Budget Report. Last legislative session Wielechowski proposed forcing AHFC to cut its payroll by $300,000. The budget amendment didn't pass.

But he said he wasn't targeting Fauske, who he said could earn a lot in the private sector.

"When you mention salary, also mention the $1.9 billion we've delivered to the state coffers," Fauske said. "So the state has gotten its money's worth." The housing agency sends its profits to the treasury.

The new gas pipeline agency is operating in the old Exxon offices on C Street. Fauske said he will be concentrating on securing commitments to ship gas through the pipeline, a process known as an open season that will take place in the first half of 2014.

"It's going to be a major day out there when suppliers, producers and others come together and we have enough success to declare a project," Fauske said.

The state separately is still working with TransCanada and the major oil producers on a big, 48-inch diameter pipeline that would export liquefied natural gas. But that project hasn't been able to secure shipping commitments. And shipping costs would be higher for a smaller pipeline, now envisioned as a 36-inch line, bigger than what was first proposed.

Fauske said that if his project doesn't secure commitments, his team will analyze what can be done to make that happen. The two projects could align, he said. If a big pipeline is built, his project could become a spur line.

If the project never goes? "I'll become a greeter at Walmart," he said.

The project will be overseen by a new Alaska Gasline Development Corp. board. Parnell is evaluating applications from 57 individuals interested in serving on it, Leighow said. The board will be composed of five public members and two state commissioners. Under the new law, the public members should have expertise in pipeline construction, finance, large projects and other relevant areas. Parnell will make the appointments within the next couple of weeks, Leighow said.

Asked why the old board, with expertise in housing, picked the boss for the new gas pipeline agency just weeks before its own board is seated, the board's answer comes back to Fauske.

Marty Shuravloff, an AHFC board member and executive director of the Kodiak Island Housing Authority, said the hiring of a separate gas line corporation president was necessary -- the new law established the position -- and board members had been talking about making it official with Fauske for a while.

"I've been doing double duty for a long time," Fauske said.

Fauske will fill dual roles at both agencies through the end of August. Butcher starts in his new post immediately.

Angela Rodell, state treasurer and a deputy commissioner, will serve as acting revenue commissioner until Butcher's replacement is named.

Reach Lisa Demer at ldemer@adn.com or 257-4390.


By LISA DEMER
ldemer@adn.com
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