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Natural Gas Distribution System for the Unserved Portions of the FNSB A Community Plan

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Natural Gas Distribution System for the Unserved Portions of the FNSB A Community Plan. Fairbanks City Council 6/10/13. IGU - Vision.

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Natural Gas Distribution System for the Unserved Portions of the FNSB

A Community Plan

  • Fairbanks City Council 6/10/13
igu vision
IGU - Vision
  • Deliver Low Cost Gas: Anon-profit business delivering gas Borough-wide at $15/mmBTU, a cost competitive with wood to improve area-wide PM 2.5 air quality levels.
  • As Soon As Possible: Complete the gas distribution system within the next 5 to10 years
  • To As Many As Possible: Gas service to the high and medium density areas surrounding Fairbanks (to 12,000+ homes and businesses)
city of fairbanks ordinance no 5895
City of Fairbanks Ordinance No. 5895
  • Page 2: “b. Direct competition in an area covered by a Certificate of Public Convenience & Necessity by the Regulatory Commission of Alaska will not be initiated without approval of the Fairbanks North Star Borough, the City of Fairbanks and the City of North Pole by separate resolutions. In the event such authority is given, IANGU is only authorized to operate via a contract with a private entity unless this option is not available.”
fng s comments on igu application
FNG’s Comments on IGU Application
  • IGU does not have a natural gas supply contract
  • IGU’s financing based on 50 year loans at 1% interest is not possible (AIDEA requires 30 year loans at higher interest (3% tax-free to 4.5% taxable bonds)
  • IGU’s residential gas demand is too high (IGU @ 245 mcf/year compared to FNG @ 125 mcf/year)
  • lGU’s retail natural gas delivery price will be higher than FNG’s due to higher cost AIDEA financing and lower residential customer gas demand
igu s comments on fng application
IGU’s Comments on FNG Application
  • Thousands of residents in FNG’s existing service area have been waiting over a decade for gas service
  • FNG’s 3 Bcf/year gas sales to a North Pole industrial customer -no commitment provided for this gas demand or quantity
  • FNG investing a fraction of what is needed for LNG storage and distribution system expansion necessary to serve new area
  • FNG is diverting financial resources needed to provide adequate service within its existing service area in an attempt to foreclose IGU from serving the surrounding FNSB community
igu plans for this year
IGU – Plans for this Year
  • Reconcile AIDEA and IGU Cost Estimates
  • Work with AIDEA/AEA - Secure gas distribution system financing (Grant & Loan)
  • Establish RCA Service Territory for the Unserved Area
  • Create Public/Private Partnership – Operator Agreement
  • Work with AIDEA – Secure LNG Supply
  • Work with GVEA - LNG Trucking & Storage
  • Determine Engineering, Permitting and Right-of-Ways for Construction of Phase I (North Pole area)
igu issues matrix
IGU Issues Matrix

Conversions Market Sales LNG Storage

Cost Estimate

Operator Interest Rate Trucking

Delivered Cost

Mgmt

outstanding issues summary
Outstanding Issues/Summary
  • Mission
  • Cost
  • Efficiency
  • Experience
  • Timing
  • Impact on Financing
  • “Competing”
  • Expectations for any gas utility
  • COF Focus
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