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New municipal natural gas utility to focus first on North Pole

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Posted: Tuesday, November 27, 2012 11:39 pm | Updated: 12:08 pm, Mon Jan 21, 2013.

FAIRBANKS — The new municipal natural gas utility plans to focus on initially bringing natural gas distribution to the North Pole area, leaving Fairbanks to private enterprise.

That’s the message in a letter the newly formed board approved to send to Gov. Sean Parnell during its second meeting, which was held Tuesday afternoon.

The letter outlines the utility’s legislative priorities and funding requests.

The Interior Alaska Natural Gas Utility was formed in mid-October to facilitate the delivery and distribution of natural gas to the Interior or, if necessary, to provide that service.

Board member Bob Shefchik said the utility first will focus on building up the North Pole-area distribution system.

“We’re focusing on North Pole because it’s the next most dense area outside the Fairbanks area, it’s got the most air quality problems and it’s the other end of town from the certificated area served by FNG,” he said. “It makes logical sense to start out there and work your way toward town.”

Much discussion had occurred about what the exact role the utility would take once formed. Fairbanks already has a private natural gas provider in the form of Fairbanks Natural Gas, which has just more than 1,000 customers.

FNG has plans to expand into most of Fairbanks once it can get more gas, which is behind an effort to truck gas from the North Slope.

For its work on a North Pole-area distribution system, the new municipal utility requested $100 million in grants and $100 million in low-cost loans to address the rapid buildout of the distribution system.

Shefchik noted that the funding is intended to be pass-through funding for another entity to construct and operate, fulfilling the utility’s primary goal of facilitating distribution.

That was a point that was often brought up during the roughly hour and a half-long meeting, and the letter was reworked to make it clear that the utility doesn’t, at this point, intend to be responsible for operating the system.

“If we have guys out there checking gauges, I would be very surprised,” Shefchik said. “Our intention is to be transitionary.”

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

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