By Mayor Luke Hopkins, Mayor John Eberhart and Mayor Bryce Ward
Perhaps Colonel Hannibal Smith, of A-Team fame, said it best: “I love it when a plan comes together.” For decades, Interior Alaskans have waited patiently (and not so patiently) for the arrival of lower-cost natural gas to our region. Today, thanks to the efforts of Gov. Bill Walker and the Interior delegation of the Legislature — and the tireless advocacy of thousands of our residents — we are closer to realizing that goal than ever before. We’re pleased to report that through a combination of state grants, low-interest loans and sound investments proposals, borough residents are on track to begin our transformation from the fuel oil economy of yesteryear to a natural gas-fired economy of tomorrow.
This story is a good one, and it reflects the growing recognition across Alaska that Fairbanks and North Pole have been literally left out in the cold for far too long. The plan — known as the Interior Energy Project, or IEP — gives Interior Alaskans the opportunity and flexibility to find the low-cost source of natural gas, transport it to the Interior and deliver it to our homes and businesses through a distribution system. Additionally, existing Fairbanks Natural Gas customers should see a substantial reduction in their rates — perhaps as high as 20 percent. When all is said and done, most of our Fairbanks North Star Borough residents will be able to purchase clean-burning gas.
Make no mistake; the IEP is not a charity project. Rather, it is a financial investment by the state of Alaska in our communities — an investment that will result in a decent rate of return to the state’s investment branch, the Alaska Industrial Development and Export Authority. As our natural gas economy grows, rate payers will pay back the low-interest loans secured by the hundreds of millions of dollars in AIDEA’s revolving energy loan fund. It is anticipated that the benefits of the IEP’s investment in our community will allow AIDEA to pursue other projects to deliver lower-cost energy to other towns and villages across Alaska. That’s right — by bringing lower-cost energy to your home and mine, we can help lower energy costs to our surrounding region and beyond. That’s something every Interior Alaskan can feel good about.
The IEP is led by the A-Team of Alaska energy. Local resident Bob Shefchik was tapped to lead the effort recently, and his experience with local government and the Interior Gas Utility have prepared him well for this critical role. Former Interior legislator Gene Therriault did a yeoman’s work securing the passage of legislation granting the IEP needed flexibility. Recognizing the need and potential for this project, AIDEA and their consultants have developed a financial and engineering model for the IEP. In the next few months, the state can finalize the authority to purchase of Fairbanks Natural Gas and its assets.
The AIDEA purchase of Fairbanks Natural Gas and its parent company Pentex has raised some eyebrows locally and in Juneau. We should remain strong supporters of this proposed action, knowing the acquisition will benefit gas customers immediately and move toward a natural gas utility for residents that will result in lower construction costs, better market penetration, lower taxes on the utility and — most importantly — cheaper natural gas for us that takes aim at improving our air quality. Preliminary estimates from AIDEA show that this plan could save almost $2 million in operational costs annually. Those savings will be passed on to our families and businesses.
So what happens next? We’re holding a local town hall meeting at 6 p.m. Tuesday at Pioneer Park Civic Center to hear from AIDEA about their proposed purchase of Pentex and the schedule for bringing natural gas to our community. We encourage everyone to attend who is ready to learn more of this lower-cost energy plan that will change our community and economy for the better. This plan is a good one, and deserving of our community’s support. After years of hard work, the mayors are pleased to report that it’s indeed — finally — coming together. We love it when a plan comes together!
Luke Hopkins, John Eberhart and Bryce Ward are the mayors of the Fairbanks North Star Borough, the City of Fairbanks and the City of North Pole, respectively.