Homer Alaska - News

Story last updated at 3:54 PM on Wednesday, May 30, 2012

Gas workshop set for Monday will kick-start some decisions

By McKibben Jackinsky
Staff Writer

Now that $8.15 million in state funding to bring natural gas from Anchor Point to Homer and Kachemak City has successfully run the gauntlet of the Legislature and Gov. Sean Parnell's veto pen, what happens next?

That's the topic to be discussed at a Homer City Council work session to be held in the council chambers at 5 p.m. Monday.

On the city's invitation list are representatives of Enstar Natural Gas Company, the Kenai Peninsula Borough and Kachemak City.

"There are a couple of things happening," Homer City Manager Walt Wrede said. "One is to get information out to the public and the other is to facilitate council decisions."

Questions topping the list are when will Enstar construct the feeder main line and when will natural gas begin making its way through the line to the southern peninsula.

Then there's the issue of whether the city should facilitate financing through an LID, local improvement district, in the build-out of a distribution system to get natural gas from the feeder line to residents and businesses, and what the boundaries of an LID should be.

"It would be like creating a water and sewer district where the city provides the funding to build it and property owners pay it back over time," Wrede said.

Answering one question leads to others. For instance, if the city does get involved, would the build-out be done in stages? Would it start with a downtown core or would the entire city be done at once? Would financing come through the sale of bonds? Borrowing from the state?

"There's a lot to figure out," Wrede said.

Within city code, there are several required steps before an LID can be approved. Those include public hearings, a community meeting, an objection period when property owners can express their opinions on the project, resolutions that would have to be approved and an assessment role to certify property owners.

If the city council and residents choose to begin work on the build-out this coming winter or the following winter, Wrede said, decisions would have to be made in time for Enstar let contracts out and know how much materials to order.

If the city decides not to participate in the build-out, the process would probably move more slowly.

"Some of the big consumers — the hospital, school district and city — would probably go ahead and make their own deals with Enstar to hook up. Then properties along those lines could hook up, but they'd have to pay Enstar and the organization that paid for those lines," said Wrede.

Providing information to the public is an important part of the decision-making process, calling into play the city's website, having information available at kiosks, discussions held on the radio and articles in the newspaper. The goal of Monday's meeting is to initiate the discussion.

Homer is not the only community faced with delivering natural gas to its residents.

"Our attorney, Tom Klinkner, was the attorney for the Matanuska-Susitna Borough when they did theirs and some of their subdivisions were financed by them," said Wrede. He also noted the Kenai Peninsula Borough's use of USADs, utility special assessment districts, an avenue taken by Anchor Point residents . "This would be the same kind of thing, only on a city level."

With funding for the natural gas line to Homer vetoed twice by the governor, Wrede was not surprised it survived this year's legislative budget process.

"All the signs were pointing toward the governor approving it this time. I'd have been disappointed, very disappointed if he'd vetoed it this time," said Wrede. "Now, it's real. It's not hypothetical anymore."

McKibben Jackinsky can be reached at mckibben.jackinsky@homernews.com