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Board to give municipalities voice in state LNG project

Posted: March 26, 2014 - 12:34pm

JUNEAU — Gov. Sean Parnell signed an administrative order Tuesday creating a municipal advisory board to weigh in on issues related to the major liquefied natural gas project the state is pursuing.

Several mayors have sought assurances that they would have a voice on terms that will affect local communities and be negotiated by the state in pursuit of the project. Areas of concern have included payments in lieu of taxes and ensuring that existing oil and gas properties, such as the trans-Alaska pipeline system, from which some communities derive taxes, are not affected.

The Municipal Advisory Gas Project Review Board, established by the order, would include the commissioners of Revenue, Natural Resources and Commerce or their designees and one representative each from the North Slope, Fairbanks North Star, Denali, Matanuska-Susitna and Kenai Peninsula boroughs, and the municipality of Anchorage. It also would include two public members who do not live in those communities and one member of an organization representing the interest of municipalities. The governor would make the appointments.

The board would review available information, hold public meetings and provide annual reports by Dec. 15 each year. The board is to meet at a date and time set by the Revenue commissioner or the commissioner’s designee, at least once in a calendar year.

Michael Pawlowski, a deputy Revenue commissioner, said he believed that language surrounding meeting at least once a year was standard and could not imagine just one meeting.

“We would never get the consensus recommendations for action that we would need to build for success going forward,” he said. He said the state will be guided by the group.

The state has signed an agreement with officials from the Alaska Gasline Development Corp., TransCanada Corp., and BP, ConocoPhillips and ExxonMobil Corp., spelling out broad terms for advancing the project. The agreement includes a provision stating that subject to consultation by the state and local governments, payments in lieu of property tax would be paid by the companies on each component of the project. Impact payments paid by the companies to help offset increased service and other costs borne by the state and local governments during construction also would be subject to consultation.

If enabling legislation, deemed acceptable to all the parties, passes the Legislature — a bill passed the Senate last week and is being considered by the House — project-enabling contracts would be negotiated and brought back to lawmakers for consideration.

The board’s duties and responsibilities would include recommendations surrounding property taxes and ways to mitigate the financial impacts to communities affected by the project.

Denali Borough Mayor Clay Walker said he supported the effort. He said he would have liked to have seen one more item under duties and responsibilities: an opportunity to weigh in on location of off-take points for gas for in-state use.

Kenai Peninsula Borough Mayor Mike Navarre called establishment of the board a positive step but said a lot of details still had to be resolved.

“It gives us some opportunity but certainly it’s not as much maybe as we had hoped,” he said. “But recognizing that the governor and the administration was not going to invite us to participate in those negotiations, this at least gives us a chance to have some input if they discuss with us things that are being considered. We’ll see.”

 

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