FAIRBANKS -- Existing customers of Fairbanks Natural Gas can expect a rate decline of about 13 percent this fall following a unanimous decision Thursday by the Alaska Industrial Development and Export Authority to buy the utility and its parent company, Pentex Alaska Natural Gas, for $52.5 million.
"We expect the Pentex acquisition to be a short-term strategic investment that can play a significant role in helping achieve long-term success for the Interior Energy Project," AIDEA executive director John Springsteen said in a press release. "This acquisition will promote an integrated gas distribution system that can be built and operated in a more efficient manner for the benefit of Interior Alaska residents and businesses."
AIDEA said it expects the deal to close by Oct. 15 and that it would hold the company on an interim basis while a municipal utility takes shape with the intention of using a variety of state financing tools to acquire the company. The AIDEA board approved an investment of $54 million, which includes $1.5 million in working capital.
"The ultimate goal of this transition will be a single, locally controlled utility serving the Interior," Springsteen stated.
The expected price decline to the 1,100 customers now served by the private firm will be a result of the lower cost of capital, the agency said. The purchase price would be reduced by the proposed sale of a Point MacKenzie liquefaction plant and other assets to Hilcorp for $15 million.
The board considered the proposed contract in executive sessions during two meetings in May and put off action until Thursday pending resolution of some final details.