Local officials expressed disappointment and confusion after Gov. Sean Parnell released his Fiscal Year 2013 budget last week. One item was glaringly missing: a transmission line to bring natural gas from wells east of Anchor Point south to Homer and Kachemak City.
In the face of that omission, they’re preparing to try again.
“Maybe we should have read the signs a little better,” said Homer Mayor James Hornaday. “When we were down there last February meeting with the (governor’s) chief of staff, right in the middle of our presentation the chief of staff got up and walked out without any explanation.”
City Manager Walt Wrede outlined the coordinated effort to get Parnell’s blessing on the gas line.
“We had the city lobbyist working on it, talked to the chief of staff, I had some discussions with some of the governor’s staff members and commissioners. We’ve been going around talking to the general public and organizations whenever invited, and I think there was quite a letter-writing campaign that was organized by the (Homer) Chamber of Commerce,” said Wrede, adding he was heartened by the consistent legislative support for the project.
Funding to bring natural gas from wells east of Anchor Point to Homer was in the 2010 legislative version of the state capital budget, however, Parnell reduced that $4.8 million to $525,000. That amount was used to build a pressure reducing station and lay transmission line as far as Chapman School. This year, the Legislature included $10 million to bring the line on to Homer, but Parnell vetoed the entire amount.
Last week, Parnell said he had nothing against the pipeline, but was concerned about “fairness and equity among Alaska projects.”
Parnell said he had continually told Homer’s representative that when the Homer community was willing to pay its part, “that’s when I will consider it in conjunction with all the other capital projects.”
Rep. Paul Seaton, R-Homer, said it was unclear “how much participation by local consumers will be acceptable by the governor.” Seaton said after consulting with the city councils of Homer and Kachemak City, he had proposed to the governor that residents of the southern peninsula were willing to pay 100 percent of the local distribution system. In addition, the Regulatory Commission of Alaska has an active tariff of $1 MCF (1,000 cubic feet) that could be applied.
“That means that the average person was going to save about 50 percent on their heating bill if the state funded the entire transmission line or 38 percent with the $1 MCF tariff,” said Seaton.
The state’s energy policy, signed into law by Parnell in July 2010, commits to “promoting the development, transport, and efficient use of nonrenewable and alternative energy resources, including natural gas, coal, oil, gas hydrates, heavy oil and nuclear energy for use by Alaskans and for export.”
“It seems to me that the statewide policy says we should look and aid in the building of the most cost-effective solutions and it definitely includes natural gas,” said Seaton. “Nobody is asking the state to pay any of the distribution system that would be done in the local community. They were asking that the state help out in getting the transmission line to get the gas to the local community.”
Seaton expressed concern the governor’s expectation for community contribution would push the local burden to a point natural gas would no longer be economical.
A natural gas pipeline extension has been on priority lists of the city of Homer, the Kenai Peninsula Borough School District and the Kenai Peninsula Borough. Earlier this year, Kachemak City residents approved a 1-mill increase to their real property tax that would help pay for the issuance of bonds to finance a natural gas distribution system along city streets.
“Rep. 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,” Kachemak City Mayor Phil Morris said at the time.
Morris was not surprised the gas line was not in Parnell’s budget, but, like Seaton, said it came down to “how much of a local contribution (Parnell) needs.”
Bill Smith, who represents the city of Homer on the borough assembly, said he believes efforts to get the gas line on the budget have not been in vain.
“It has certainly been elevated in (Parnell’s) consciousness,” said Smith. “I hope we can get the Legislature to help out so when it comes back before the governor, he’ll see fit to allow it to go forward.”
Mako Haggerty, assembly member representing the southern Kenai Peninsula, remained positively focused on the gas line’s future. “We just need to go back to the Legislature and that’s exactly where we will go. Nothing’s changed as far as we’re concerned,” he said.
Sharpening his focus on the upcoming budget process after the Legislature convenes in January, borough mayor Mike Navarre said, “I think that (Seaton) is hopeful and confident and I certainly am that we’ll be able to get the gas line included when the capital budget is considered by the Legislature and then work on adequate justification to protect it from the governor’s veto. That’s certainly something we’re going to focus some attention on and get accomplished.”