AIGC looking into bringing natural gas to Southeast communities

Posted: Wednesday, June 12, 2002

PETERSBURG (AP) -- A plan to bring natural gas to over a dozen Southeast Alaska communities faces several hurdles, including finding about $80 million to fund the project.

If the Alaska Intrastate Gas Company can find the funding, the project would begin by serving Ketchikan with utility gas, not natural gas.

Natural gas is methane and utility gas is a mixture of propane and dry air. The utility gas would be shipped in rail tanks on barges from British Columbia. Each community would have a storage facility and underground distribution lines.

Ketchikan would require $20 million in infrastructure. Sitka and Juneau would follow with another $50 million to get those systems up and going.

The company said it can provide residents with a less expensive alternative to fuel oil, electricity or propane for heating homes, water tanks, dryers and stoves.

A recent feasibility study paid for by the company suggests it can cut customers costs by at least 20 percent once a home or business has the appropriate appliances or is retrofitted.

''We have a superior product and a cheaper product that will result in economic benefits to all consumers and the industrial folks in particular,'' AIGC Senior Vice President Paul Rusanowski told CoastAlaska radio network.

One of AIGC's assumptions is that all of the seafood processors in Ketchikan, Sitka and Juneau would convert to gas. But as of yet, the company does not have any firm commitments.

Bob Poe, executive director of the Alaska Industrial Development and Export Authority, said there are several possibilities for funding the project.

That includes funding by AIDEA that would help with the initial phase, providing service to Ketchikan, and afterward assess whether the additional phases are realistic.

Poe said another option is conduit bonds, which require other investors. A couple of bond companies have eyed the project but Poe said the feasibility study needs additional information.

The possibility that AIDEA may offer financial assistance to AIGC, is bothersome to officials with the 4-Dam Pool electric utility. The group recently purchased four hydroelectric facilities from the state, including Ketchikan's Swan Lake plant and the Tyee plant which supplies power to Wrangell and Petersburg.

Acting director Dave Carlson said it doesn't make sense to lend the 4-Dam Pool money to buy the hydro plants only to also offer financing for a company in direct competition.

''I understand that part of their plan is to try and hook up the canneries to use this. That would cause a decrease in kilowatt hour sales,'' Carlson said.

But Rusanowski said offering utility gas should improve development opportunities and ultimately increase demand for electrical companies.

''We're not going after the major electrical loads. We're primarily going after the home and hot water loads.''

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