This editorial first appeared in the Fairbanks Daily News-Miner:
There’s no just-add-water way to bring down energy costs in Interior Alaska, but the Legislature is working on a few measures that could help.
One of those bills passed out of the House Resources Committee on Monday. It would provide a tax credit to any company that builds a large natural gas storage tank.
The tax credit could substantially improve the economics of any plan to get natural gas to the Interior.
Golden Valley Electric Association, the local power cooperative, and Flint Hills Resources, which runs a local refinery, want to truck gas from the North Slope to North Pole. They’d burn it in an existing GVEA power plant, use it to run the refinery and potentially sell it to other users.
That would allow GVEA to stop burning so much expensive oil to generate electricity, saving consumers money on their power bills. Gas also could replace the oil Flint Hills burns to obtain the heat that drives the refining process.
In addition, Fairbanks Natural Gas, the local distribution company that gets its product from Cook Inlet, has proposed to truck gas to Fairbanks from the North Slope. With that source, it potentially could expand its local operation.
These projects all would need a place to put their gas. That’s where the Legislature’s effort can help. The bill would grant a tax credit to a storage tank’s builder equal to 50 percent of construction costs, with a cap of $15 million. Similar tax credits are available for gas storage in the Cook Inlet area.
In addition to improving the economics of any gas trucking plan, the credit would help lower the cost to the consumer.
The legislation requires that any gas storage facility receiving the tax credit be regulated as a utility under state law.
This would ensure that “any savings are passed along to the rate payer, thereby lowering costs and keeping more dollars in the local community,” according to the legislation’s sponsor, Rep. Steve Thompson, R-Fairbanks.
Sen. Joe Thomas, D-Fairbanks, has proposed identical legislation in the Senate. It’s important other senators also become aware of the bill’s merits.
One way or another, the Legislature should get this bill to the governor’s desk.