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Natural gas plan needs analysis of private benefits, public gain

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Posted: Friday, September 21, 2012 11:21 pm

The Lowell Group plan for “Natural Gas in Two Years” that is being promoted by a group of longtime Fairbanks residents as a solution to the natural gas supply picture is helping advance the discussion of the issue in Fairbanks. I commend them for their work.

What is lacking at this point, however, is a detailed analysis that shows potential private benefit and potential public gain from the plan. 

We can’t assume that all of the unknowns will fall into place and lead to a dramatic cut in energy costs. Despite the assertion that a 50 percent drop from heating oil prices is guaranteed, nothing is guaranteed.

The assertion from the Lowell Group that the Regulatory Commission of Alaska can be counted on to make sure that the price to the consumer drops is not warranted, based on the RCA track record and the complexities of utility law.

Rate regulation by the RCA should be extended to cover the natural gas utility, but we need safeguards to assure that consumers get the maximum benefit.

The Lowell Group, which is named after the late Don Lowell, is not in a position to answer all the difficult questions that have come up and local government doesn’t have a structure to sort through all this either.

That’s why I think that the utility proposed by Borough Mayor Luke Hopkins and some assembly members, or some similar government initiative, is essential.

The Lowell plan, submitted by a group that includes Hank Bartos, Dick Brickley, Don Callahan, John Phillips, Mike Young and others, needs more review.

To its credit, the Lowell Group members are updating their website with details from the ongoing community discussion.

I have been told on many occasions that it doesn’t matter how much the Minnesota hedge fund that owns Fairbanks Natural Gas would gain from a state subsidy because energy prices will be so much lower that whatever the gain is to the hedge fund, it would be a small price to pay and people in Fairbanks won’t care.

I have also been told that it is inconsistent on my part to raise that question without asking what the value would be to GVEA or Flint Hills.

In the case of GVEA, since it is owned by its members, I think the benefits go entirely to our region, which is the best-case scenario. In the case of Flint Hills, that is a good question, as I expect that even though the company doesn’t like government involvement, it wouldn’t mind buying natural gas at a lower price.

I am concerned that the Lowell Group plan is similar to the plan that Fairbanks Natural Gas was promoting a few years ago, also headlined “Natural Gas in Two Years.”

This plan, or something similar, is never going to get approval by the Legislature and governor unless the specifics are nailed down by local government and we get closer to a community consensus.

•••

ALASKA’S HOUSE: Carol Murkowski Sturgulewski has always had the knack of selecting the telling detail when writing a newspaper story, a magazine article or a book.

Those skills are much on display in the pages of “White House of the North: Stories from the Alaska Governor’s Mansion.”

I worked with her at the News-Miner back in the late 1970s, where she arrived after finishing her journalism studies at the University of Oregon, brimming with energy and optimism. She quickly developed into an outstanding newspaper reporter.

In the intervening years she has lived and worked in various parts of Alaska, balancing a writing career with that of raising three boys with her husband, Roe.

She was an adult with three kids when her mother and father, Frank and Nancy Murkowski, lived in the governor’s mansion, but her knowledge of Alaska politics, history and journalism make her the ideal person to tell the story of the big white house in Juneau, one of the most photographed parts of Alaska that is not a mountain or a river.

“From the outside, the Governor’s House is simple white and green, with a crisp, no-nonsense, New England look,” she writes. “But open the door, and you step into a jewel box of polished wood, mellowed antiques, vibrant artwork and crystal chandeliers glittering against a backdrop of evergreens and ocean.”

“White House of the North” features some great anecdotes about the governors and families who have lived in the mansion, which was built just as Alaska was getting its first territorial government.

This is not just the history of a building, its construction, maintenance and occasional renovation, but a lively account of the people who dwelt in those rooms, from Gov. Walter Clark in 1913 to Gov. Sean Parnell in 2012.

She said the house is in excellent condition today, upon the completion of major exterior renovations in 2011.

Carol will sign copies of her book from 3 p.m. to 5 p.m. today at Gulliver’s Books on College Road.

Dermot Cole can be reached at cole@newsminer.com or 459-7530.

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