Homer Alaska - News

Story last updated at 6:11 PM on Wednesday, July 13, 2011

Kachemak City ballot question to test voters' support of natural gas pipeline

By McKibben Jackinsky and Michael Armstrong
Staff writers

Asking Kachemak City voters to approve a one-mill increase of their real property tax — $100 per $100,000 of assessed value — was brought before Kachemak City's council at its July 13 meeting.

Introduced by Mayor Phil Morris, the ordinance asked council approval to place the increase before voters in the Oct. 4 election. The additional mill would help pay for the future issuance of bonds to finance a natural gas distribution system along city streets to which residents could choose to connect.

Voter approval would indicate continued support to bring natural gas from wells east of Anchor Point to Homer and Kachemak City, Morris told the Homer News. The $10 million project was cut from the state's capital budget by Gov. Sean Parnell.

"Rep. (Paul) 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," said Morris of advice from the Homer legislator.

Morris isn't the only one continuing to push for a natural gas pipeline on the southern peninsula.

John Sims, corporate communications and customer service manager for Enstar Natural Gas Company, said, "We are going to meet with the city of Homer ... and Rep. Seaton and hopefully try to work on some possibilities and some other means for getting a gas line down there. The project hasn't stopped just because the money hasn't gone through."

The Legislature's 2010 capital budget contained $4.8 million to bring a pipeline from Anchor Point to the southern peninsula. Parnell vetoed all but $525,000, which was used to construct a pressure regulation station near Anchor Point and lay pipe south as far as Chapman School. In March, natural gas began flowing from wells approximately 8 miles east of Anchor Point through a high-pressure distribution line Enstar built north to Ninilchik, connecting to gas lines up to Anchorage.

The $10 million in the Legislature's version of the 2011 capital budget would have allowed for pipe to be laid south from Anchor Point along the Old Sterling Highway to the Sterling Highway and then on to the city of Homer and Kachemak City.

On June 29, Parnell announced he had reduced the Legislature's $3.2 billion capital budget to $2.8 billion. The pipeline was among $39 million left unfunded for the Kenai Peninsula.

Morris sees approval of the tax increase as a timesaving step for when funding for the pipeline is finally approved. No tax would be payable until the distribution line was completed.

"We actually don't need permission to add another mill because we have authority to increase up to 2 mills, but we wanted to have permission from the voters to go ahead and fund the distribution part of the gas line," said Morris. "We will probably go on the ballot, even though (the pipeline) is not funded, just to get it out of the way. ... It would cut down the process later on."

The governor's veto was a surprise to many.

"There was strong regional support for it. It was consistent with the state's energy plans and climate action plan. For all those reasons, we thought it fit nicely with what we thought the governor's priorities were. It leaves us scratching our heads. We were disappointed, more than a little disappointed," said Homer City Manager Walt Wrede.

Support for bringing natural gas to the southern peninsula remains strong.

"There is no question that that pipeline is needed to save costs to all users, including the borough, but also to provide necessary service that the gas line would offer to commercial, as well as personal interests," said David R. Carey, Kenai Peninsula Borough mayor.

McKibben Jackinsky can be reached at mckibben.jackinsky@homernews.com. Michael Armstrong can be reached at michael.armstrong@homernews.com.