FAIRBANKS — Utilities, state agencies and local leaders are gearing up for what they say will be a great deluge of affordable, clean-burning natural gas into the Fairbanks area.
Crews are busily installing service lines, utilities are boasting of grand plans for expansion, there are town halls on the subject and local politicians are patting themselves on the back.
You might think natural gas has come to Fairbanks and solved, once and for all, the Interior’s cripplingly high energy costs and woeful wintertime air quality.
But think again: Even though construction crews might be putting service lines a few tantalizing yards from your house, there are still many steps — both in your home and on the state level — between you and natural gas.
The work that’s going on in communities like Hamilton Acres and the meetings that are being held are all in preparation for an ongoing state-funded project to bring more gas to Fairbanks known as the Interior Energy Project. That plan isn’t finalized, but if everything goes to plan natural gas will get to Fairbanks sometime in 2016.
Still, at public meetings and town halls there’s a palpable excitement about natural gas and curiosity about just what exactly it’ll mean for Fairbanks-area residents.
Who will get gas and when?
Currently, about 1,100 households and businesses enjoy natural gas service from Fairbanks Natural Gas. That gas is trucked up from the Cook Inlet, which has had its own array of supply problems in recent years.
The bulk of additional gas to serve Fairbanks-area customers will come from the North Slope, the site of a proposed plant that’s a product of a public-private partnership. The processing plant will liquify natural gas by supercooling down to about 260 degrees below zero, which will be loaded on trucks destined for Fairbanks.
Fairbanks Natural Gas is already preparing for the influx of natural gas and, in conjunction with state funding, has already been laying lines this summer. FNG President and CEO Dan Britton said the plan is to put in about 30 miles of pipe during 2014 and 2015.
“We have a pretty extensive buildout to date with over 70 miles of pipe installed,” he said. “The work we’re doing right now puts us on front of 2,500 additional residential customers and about 100 to 200 commercial customers. On the system we have to date there are about 700 to 800 who don’t get service because of supply constraints.”
Britton said the additional work will bring service lines Shannon Park, University West, Westgate, Aurora and work towards the College Road.
If you live outside the city of Fairbanks, you’ll be looking to the municipal Interior Gas Utility.
IGU, which was formed by the three local governments in 2012, has an ambitious buildout plan that’s split into six phases, with service to the first one planned for some time in 2016.
Its service area will begin with a build out in North Pole, then sweep north and east around the city of Fairbanks North Star Borough, along parts of Chena Hot Springs Road, Farmer’s Loop, parts of Goldstream Valley and Chena Ridge. Chena Ridge will be the last area to receive gas under IGU’s plan sometime after 2020.
Cost of conversion
All the work that needs to be done to get your house up and running on natural gas can be daunting. There’s the work to bring the line from the street to your house, the cost to bring it into the house and then the cost to either upgrade or convert your appliances.
Fairbanks Natural Gas subsidizes hook up fees heavily, explained FNG head Dan Britton. While it can cost the company up to about $1,000 to run a service line to the house, FNG charges only $50 for the service up to 100 feet.
The average natural gas conversion can cost anywhere between $4,000 and $15,000 said Justin Cowles, co-owner of Cowles Heating Service. The wide price range depends on whether a customer needs to replace the full furnace or upgrade an existing oil boiler. Cowles explained that replacing a furnace with a natural gas-fired heating device will also attain a 10 to 15 percent increased fuel efficiency, but said most people don’t need to start thinking about converting until gas is available.
With the high cost of conversion in mind, the Interior Gas Utility’s members are pushing for some sort of state program to help alleviate the cost to convert.
That, explained IGU board head Bob Shefchik to the assembly recently, could come as a loan that would be repaid through a small service fee on the monthly bill.
Savings
The Interior Energy Project has a goal of delivering natural gas to the customers at the rate of $15 per thousand cubic feet, which is roughly equivalent to $2 per gallon of heating oil.
What your household’s savings will be depends on a number of factors, including the cost of conversion and current source of heating, but the state estimates that the average household will save between 40 to 50 percent when heating with natural gas. or about $3,000.
The Interior Gas Utility has put together a calculator to help estimate how much it will save you, including the amount of time it will take to pay for the conversion. That is available atwww.interiorgas.com/calculator.
Other benefits
While the plans being put forward by Fairbanks Natural Gas and the Interior Gas Utility aim to reach most of the high- and medium-density areas of the borough, not all customers will get the chance to hook into a system. Those customers, however, won’t get zero benefits from natural gas.
Golden Valley Electric Association plans to transfer some of its power generation away from high-cost oil and diesel to natural gas, which should lower electric rates some.
Natural gas is also widely recognized as the one true solution to Fairbanks’ poor wintertime air pollution. Natural gas burns cleaner than wood and oil.
For more information on natural gas and its progress, visit www.interiorenergyproject.com.
Contact staff writer Matt Buxton at 459-7544. Follow him on Twitter:
@FDNMPolitics.