Alaska Gov. Sean Parnell on Wednesday filed legislation intended to provide cheaper energy to Interior Alaskans by giving the Alaska Industrial Development and Export Authority (AIDEA) the ability to provide up to $275 million in financing for a natural gas liquefaction plant and for a liquefied natural gas (LNG) distribution system within the Fairbanks North Star Borough.
A North Slope LNG plant has the potential to deliver gas via truck to Fairbanks and beyond and could provide access to gas for Alaska’s road and river communities, including Southcentral Alaska, the governor’s office said.
“It’s time to put Alaska’s gas to work for Interior Alaskans,” Parnell said. “Natural gas is a crucial component of Alaskans’ energy future. We must put in place the financing for natural gas liquefaction and distribution. Building an Interior gas distribution system will benefit Alaskans now and position those communities to take gas from an Alaska gasline.”
The bill, if passed, would authorize AIDEA to provide financing for gas facilities through the Sustainable Energy Transmission and Supply (SETS) Fund. The bill permits AIDEA to issue up to $150 million in bonds for the project and authorizes AIDEA to provide another $125 million in direct financing from the SETS Fund. This financing could be in the form of low-interest loans, guarantees or any other financing mechanism permitted under the SETS program.
Last month Parnell proposed a $355 million financial package to jump-start construction of a gas liquefaction plant on Alaska’s North Slope and a Fairbanks-area gas distribution system (see Daily GPI, Dec. 11, 2012). The package included low-interest loans that would be authorized by the new legislation, gas storage tax credits, state general funds and private investment.
“The bill is part of a comprehensive financial package relating to the Interior Energy Plan, a strategy that includes low-interest loans, gas storage tax credits and general fund dollars for a moveable liquefaction plant and distribution system,” the governor said in his cover letter to the bill. “This legislation implements the low-interest loans part of the strategy. The second prong of the strategy, gas storage tax credits, has already been enacted into law, while the general fund dollars requested will be considered during budget deliberations.”
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