Kachemak City considers next step toward natural gas

Planning for pipe

The veto by Gov. Sean Parnell of $10 million to fund a natural gas pipeline from Anchor Point to Homer and Kachemak City isn’t the end of hope for the pipeline. Certainly not if Phil Morris, mayor of Kachemak City, has anything to say about it.


Morris has introduced an ordinance that, if passed by that seven-member city council, would authorize placing before voters in the Oct. 4 municipal election an increase in Kachemak City’s real property tax of one mill ($100 per $100,000 of assessed value). The increase would help pay for bonds that would be issued to finance a natural gas distribution system along Kachemak City streets to which residents could choose to connect.

No tax would be payable until the distribution line was completed.

A public hearing on the ordinance will be held at the Kachemak City Center, 59906 Bear Creek Drive, at 7 p.m. Wednesday.

The Legislature’s 2010 capital budget contained $4.8 million to bring a pipeline from Anchor Point to the southern peninsula. Parnell vetoed all but $525,000, which was used to construct a pressure regulation station near Anchor Point and lay pipe south as far as Chapman School. In March, natural gas began flowing from wells approximately 8 miles east of Anchor Point through a high-pressure distribution line Enstar built north to Ninilchik, connecting to gas lines up to Anchorage.

The $10 million in the Legislature’s version of the 2011 capital budget would have allowed for pipe to be laid south from Anchor Point along the Old Sterling Highway to the Sterling Highway and then on to the city of Homer and Kachemak City.

On June 29, Parnell announced he had reduced the Legislature’s $3.2 billion capital budget to $2.8 billion. The pipeline was among $39 million left unfunded for the Kenai Peninsula.

Morris sees approval of the tax increase as a timesaving step for when funding for the pipeline is finally approved.

“We actually don’t need permission to add another mill because we have authority to increase up to 2 mills, but we wanted to have permission from the voters to go ahead and fund the distribution part of the gas line,” said Morris. “We will probably go on the ballot, even though (the pipeline) is not funded, just to get it out of the way.  It would cut down the process later on.”

Voter approval of the tax increase also would indicate the area’s support for the pipeline.

“Rep. (Paul) Seaton advised that it would be to our benefit potentially to get the ballot issue over with so it could be easily demonstrated that we’re serious about doing this thing,” said Morris of advice from the Homer legislator.

The governor’s veto was a surprise too many.

“There was strong regional support for it. It was consistent with the state’s energy plans and climate action plan. For all those reasons, we thought it fit nicely with what we thought the governor’s priorities were. It leaves us scratching our heads. We were disappointed, more than a little disappointed,” said Homer City Manager Walt Wrede.

Support for bringing natural gas to the southern peninsula remains strong.

“There is no question that that pipeline is needed to save costs to all users, including the borough, but also to provide necessary service that the gas line would offer to commercial, as well as personal interests,” said David R. Carey, Kenai Peninsula Borough mayor.