The state and a Fairbanks-based utility sealed a $61.3 million sale Wednesday in a step toward reducing wood smoke and energy costs in Fairbanks with imports of natural gas, an official said.
In the deal, Interior Gas Utility bought Pentex Alaska Natural Gas Co. from the Alaska Industrial Development & Export Authority, said Jomo Stewart, utility general manager, on Thursday.
IGU is owned by the Fairbanks North Star Borough. Pentex is the parent company of Fairbanks Natural Gas, serving about 1,100 customers in the Fairbanks area.
The Interior utility aims to grow that customer base and diversify Fairbanks' energy supply, reducing the Interior city's reliance on oil and wood for heat. The borough has fallen short of federal pollution rules for fine particulate matter.
The purchase was made with funding provided by the Legislature as part of the $332.5 million Interior Energy Project.
The utility has begun working with Pentex officials to merge the two entities, Stewart said Thursday.
AIDEA, in a statement on Thursday announcing the finalized sale, said the utility "will use the remaining financial tools to establish an investment grade utility for the Interior that will deliver natural gas at competitive prices, and help improve air quality in the region."