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Costs, solutions: Much is happening on the energy front

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Posted: Tuesday, November 20, 2012 11:49 pm | Updated: 4:15 pm, Fri Jan 25, 2013.

Fairbanks Daily News-Miner

Top headlines on page one during the previous two days described the biggest economic problem in our community and a couple potential solutions.

On Monday, we reported that utility costs in Fairbanks are 143 percent above the national average. For those who have trouble translating percentages into reality, let’s put that in cash terms: Annual utilities that might cost a household elsewhere in the nation $2,000 will cost a household in Fairbanks $4,860.

That’s an enormous burden on the community’s vitality. In addition to draining personal bank accounts, the utility costs harm businesses and discourage investment. The costs also inspire government accountants to propose trimming agency operations here, with Eielson Air Force Base being the prime example.

So what are the solutions?

Tuesday, the top story reported that Flint Hills Resources Alaska has withdrawn from a preliminary partnership with Golden Valley Electric Association to build a system to truck natural gas to Fairbanks. Flint Hills, owner of the larger of two oil refineries in North Pole, said the system has great potential but that the company couldn’t justify building it “for our needs and the needs of other industrial users alone.”

We haven’t heard enough to sort out whether the Flint Hills-GVEA breakup is a setback for the timely creation of such a system.

However, the Flint Hills statement looks like a strong hint that any gas trucking system needs to have a customer base beyond the refinery and the electric utility. The most obvious source of customers would be all the local homes and businesses looking for cheaper heat. Toward that end, the Borough Assembly in October created a public gas utility whose board held its first meeting Tuesday. The existing private gas utility has pledged to expand if it can.

Given all these moving parts, perhaps the most optimistic thing to say in the short term is that obviously the various ideas are getting a good shake out.

The other news at the top of Tuesday’s front page was much more clearly beneficial to Fairbanks. U.S. District Court Judge Ralph Beistline on Monday approved an agreement between GVEA, the state and the U.S. Environmental Protection Agency that will allow the Healy Clean Coal Plant to restart and begin producing cheaper electricity.

That should put some downward pressure on those high utility costs in short order and thus is welcome news.

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