Alaska Senate votes to clarify state authority for imported natural gas prices

The downtown Anchorage skyline is seen from the Tony Knowles Coastal Trail on June 3, 2022. Although Anchorage is Alaska’s largest city, it and the surrounding Southcentral region are considered small and isolated natural-gas markets. (Yereth Rosen/Alaska Beacon)

By Sean Maguire

Alaska Beacon

The Alaska Senate on Tuesday unanimously advanced a bill that would clarify state regulators’ authority to oversee pricing for imported natural gas. 

The Federal Energy Regulatory Commission oversees the construction and location of gas import facilities. Senate Bill 180 clarifies that authority to regulate pricing for imported gas rests with the Regulatory Committee of Alaska, which is tasked with ensuring utilities pay “just and reasonable rates” for energy.

A looming shortfall of Cook Inlet gas has sparked calls for imports and to build a pipeline for Southcentral Alaska’s energy needs. At least two separate gas import terminal proposals have been advancing, which has caused anxiety among regulators and the public about the potential for higher utility bills. 

The Anchorage Daily News reported in February that one facility could import roughly a third of Southcentral Alaska’s annual gas needs; the other could import around 155% of the region’s needs, allowing for the potential growth of demand.

The import facilities are slated to deliver gas in 2027 and 2029, the ADN reported.

Anchorage Republican Sen. Cathy Giessel, chair of the Senate Resources Committee and lead sponsor of SB 180, said the bill would help guarantee the lowest power and heating bills for ratepayers. She said a recent legislative change had caused “significant confusion.”

In 2024, the Legislature approved House Bill 50, an omnibus energy bill that combined provisions to regulate carbon storage, an expansion of the state’s geothermal energy program, among other changes.One sentence on page 39 of the bill has been problematic for state regulators, Giessel said. The provision states a LNG import facility under the jurisdiction of federal regulators is exempt from state regulatory oversight.

Giessel cited several cases where state regulators have been uncertain about their power to oversee rates for imported gas.

“It needs to be clarified that the RCA has the authority over the cost of the product purchased by one of our utilities,” she said in support of SB 180 before Tuesday’s vote.

The bill now advances to the Alaska House of Representatives for its consideration.

• Sean Maguire is a long-time reporter of Alaska politics and general assignments. He previously reported for the Anchorage Daily News and Alaska’s News Source. Alaska Beacon is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.