By Matt Buxton,

FAIRBANKS—More than a dozen elected officials, state legislators and local business people joined Gov. Bill Walker on Tuesday to sign House Bill 105, a bill that breaths new life into the Interior Energy Project.

The governor’s signature at the Carlson Center on Tuesday was the end of a hard-fought battle for the energy bill, one that many people locally helped see through to the end.

The bill is a pivot for the Interior Energy Project, which was created in 2013 to encourage the delivery of low cost energy to the Fairbanks area. That original legislation limited the scope of the project to North Slope. That idea proved to be more expensive than hoped.
House Bill 105 removes that restriction.

“This gives us freedom. We looked at trucking from the North Slope south and that didn’t work,” Walker said. “What we couldn’t do is have a single item every year and try it, see it doesn’t work and go back to the Legislature.”

The project’s main focus has turned to getting gas from the Cook Inlet, but the state has opened up bids to any company interested in providing and delivering gas to the Interior, whether it be by truck, rail or small-diameter pipeline.

“There is no single bullet to solve the cost of energy,” Walker said. “It’s going to be natural gas out of the Cook Inlet, perhaps, or propane out of Canada or off the North Slope.”

The meeting was the first time in years that propane got a serious mention as part of the Interior Energy Project. It was discussed at the inception of the project as a way to serve households outside of the natural gas distribution systems but has largely been ignored since then.

In a meeting with the Daily News-Miner editorial board after the bill signing, Walker offered additional information on how propane will fit into the Interior Energy Project.

“(Natural gas) works well if you’re in a subdivision of some sort, but a whole lot of Fairbanks is not part of one and I’ve long felt that (propane) is part of the mix,” he said. “Some might get natural gas and some might get propane.”

House Bill 105 faced, at times, a difficult trip through the Legislature, thanks to a combination of political resistance to the new governor and skepticism of the overall project.

Rep. Steve Thompson, R-Fairbanks, co-chairs the House Finance Committee and said during the Tuesday event that changes made by other legislators turned it into “an unacceptable piece of legislation” that required far too much oversight by the Legislature for any new directions of the project.
Thompson thanked both Walker and his staff for reworking the project into an acceptable format.

However, as far as what’s next is unclear.

The state is moving forward with buying the private gas distribution utility Fairbanks Natural Gas in an effort to unify gas distribution in the Interior. The purchase will lower bills for the 1,000 or so customers on the system by about 13.3 percent, the state said.

The purchase, however, does not solve the problem of supply.

Both the private Fairbanks Natural Gas and the municipal Interior Gas Utility are moving forward with building out their distribution systems.

Interior Energy Project team leader Bob Shefchik, a former Interior Gas Utility board member, offered a short update on the search for new gas.

“By the late fall, early winter we should have another project up and rolling,” he said.

Contact staff writer Matt Buxton at 459-7544. Follow him on Twitter: @FDNMpolitics.