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Municipal gas utility outlines wish list in letter to Gov. Parnell

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Posted: Tuesday, November 27, 2012 11:41 pm | Updated: 12:06 pm, Mon Jan 21, 2013.

FAIRBANKS — The new Fairbanks-based municipal utility wants state help for every part of a proposed natural gas delivery system, from the processing plant on the North Slope to the furnaces in homes, according to a letter sent Tuesday to Gov. Sean Parnell.

Parnell recently has been closely involved in determining the best way for the state to use its funding and resources to help develop a natural gas distribution system for the Interior as well as rural Alaska.

Like other proposals put forward by some groups, the utility is requesting the state provide $200 million for the construction of a liquefied natural gas facility on the North Slope. The utility clarifies that the funding should go to an entity that would use a “transparent, cost-based commodity pricing model” to ensure Alaskans see the maximum benefit of state investment.

The letter notes that little discussion has occurred about the actual trucking of natural gas. It asked the state to act as a “financing partner to allow qualified private operators to enter into LNG transport operations.”

The utility also wants about $100 million in grants and $100 million in low-cost loans to build a distribution system.

Finally, the utility noted that homeowners will need help, perhaps in the form of loans, to switch from existing home heating devices to natural gas. At a meeting Tuesday, the utility recommended putting that discussion on hold until next year.

The board also discussed various issues related to establishment of the utility.

Contact staff writer Matt Buxton at 459-7544 or follow him on Twitter: @FDNMpolitics.

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