Fairbanks’ Interior Gas Utility is moving closer to inking a memorandum of understanding with the Alaska Industrial Development and Export Authority to acquire and merge operations with Fairbanks Natural Gas. The North Star Borough-formed IGU is gathering public feedback on the deal, which would also expand the local distribution network.
Interior Gas Utility’ chairman Mike Meeks said the utility and the Alaska Industrial Development and Export Authority are so close to finalizing an agreement it’s like a football sitting a foot from the end zone. The only sticking point, he said, is how long Interior Gas Utility has to repay a loan. Meeks said the difference would be a modest annual bump to natural gas users’ payments down the road.
“We are now, after working for months on a $330 million project, talking about $30 increase per resident, 15 years from now,” Meeks said.
Meeks outlined other financial points Tuesday night at a public meeting in Fairbanks City Hall. The deal has IGU purchasing Pentax, a company that includes Fairbanks Natural Gas. It would expand infrastructure, especially around North Pole so more residents could tap into natural gas. But to make it a go, half of the targeted borough households would have to convert to gas. Also, Meeks said negotiations for a natural gas vendor are on-going.
Meeks’ sense of urgency to finalize the deal were echoed by former borough mayor Luke Hopkins who testified Tuesday.
“Starting something like this, this far north, with some parts of it that have not been tied up in a nice little package… I hope this accelerates it faster than it has been,” Hopkins said. “It has been frustrating.”
Another public meeting on the memorandum of understanding is scheduled Thursday in borough chambers. And the Interior Gas Utility will vote on ratifying the agreement next week.