Good morning everyone, I call the legislative budget and audit committee to order.
Today is Tuesday, January 20th, and the time is 10.
02 AM, please silence all cell phones.
We have the following members present.
Representative Fields, Representative Josephson,
Representative Cop, Senator Stedman, senator Hochman Senator Giesel,
Senator Wielikowski, And myself Senator Great Jackson.
So we have a quorum to conduct business.
I'd first like to thank Sophie from,
Sophie Tenney from the House Workers and David Munro
from LIO for supporting our committee today.
We've also been joined, I see in the audience,
by Representative Colombe.
Today, the Legislative Budget and Audit Committee is meeting for the sole purpose of considering
a contract with Pegasus Global Holdings, Inc. to provide independent consulting to the
legislature related to mega projects with a focus on the Alaska LNG project.
This request comes at the direction of Senator Essell, Chair of the Senate Resources Committee,
who has asked that the legislature secure specialized expertise to assist members as the project advances on an accelerated timeline,
and potentially approaches key investment and governance decisions.
We've also been joined by Speaker Edgman.
We anticipate a brief meeting, so let's approve the agenda, and then we'll consider the approval of this request.
Vice Chair Fields, may I please have a motion for the approve of agenda?
I move and ask unanimous consent to the legislative budget and audit committee approve the agenda as presented.
Thank you. Is there any objection?
Seeing no objection, the Agenda is approved.
Now, item number three, consideration of contract award for Pegasus Global Holdings.
Mr. Vice Chair, may I please have a motion?
I moved and asked unanimous, consent of the Legislative Budget and
Authorize the chair to enter into a contract with Pegasus Glivel Holdings Incorporated to provide independent expert analysis related to planning and execution of mega projects, such as the Alaska LNG project, for an amount not to exceed $250,000.
Thank you. I will object for the purpose of discussion, and we'll note that the not to
exceed amount in the motion is based on the amount of funding that's currently available
in a budget without completely depleting funding for additional contractual services.
So at this point, I'm going to ask my staff, Jeff Step, to summarize this request.
Chris Curtis, legislative author, she's with us, and she is available to answer any questions.
And also Emily Nalman, Director, Legislative Legal Services is
available telephonically.
Thank you, Jeff, And welcome.
Thank You.
Good morning, my name is Jeff Stepp.
I'm staff to the chair, Senator Gray-Jackson.
Madam Chair, members of the committee for the public record, I'll briefly summarize the memo from Senator Giesel.
That requests Pegasus services.
the proposal that was submitted by Pegasus to the committee in the written justification for an exemption to
the legislative procurement procedures.
Each of these documents was distributed to members and posted to basis last week.
First Senator Giesel's request, which is in your packet.
As you mentioned, Madam Chair, this request originates from Senator Giesel and her capacity as Chair of the Center Resources Committee.
Senator Geisel formally requested that the committee retain Pegasus to provide independent expert advice.
As the Alaska LNG project advances towards potential final investment decision.
Senator geisel's requested consultation subjects include assistance in understanding
the implications of project ownership and governance structure.
as laid out in the current project cost controls and supervision of costs and
finance agreements engineering procurement and construction contracts
off-take agreements for instinct to gas financial decisions related to tax
structure royalty and production tax schedule risk and the need for
ongoing independent monitoring as the project evolves.
As noted in the memo, the timing is critical.
Senator Giesel emphasized that having Pegasus available
by the start of the session would allow the Senate
Resources Committee to engage with Pegasus as soon
as this week, and indeed they have been scheduled
to present to her committee on Friday.
Second, a quick summary of The Pegasus proposal.
After receiving the request, Senator Grey Jackson facilitated a team's meeting with leadership from Pegasus to determine their interest and availability.
After confirming that they were available and interested,
Senator Gray Jackson requested a formal proposal from the company, the proposal which is in your packet offers an overview of the
company and summarizes their key capabilities, representative of experience and core team members.
Notably, Pegasus has prior experience with the Alaska LNG project, having previously
worked under contract to this committee in 2018 and 19, under the leadership of Senator
Steadman when he was chair of this Committee.
And they have also briefed the Senate and House resources committees on the risks associated
with mega projects, generally, and specific risks applicable to the LASCA LNG project
as recently as April of last year, 2025.
Their current proposal emphasizes a comprehensive scope of services that focuses on the risks
and challenges associated with mega projects such as the Alaska LNG project and recommendations
to the legislature, excuse me, on how it may address these risks and challenge.
The proposal explicitly acknowledges the current project structure, including Glenfern's role
Finally, a real quick summary of the written justification for a section 040A1 procurement
exemption.
This section of The Alaska Legislative Procurement Procedures says that a contract is exempt from
the solicitation requirements if the procurement officer determines in writing that it is not
practicable to award a contact by competitive sealed bidding, competitive-sealed proposals
And if the award of the contract under this paragraph is in the agencies or committees best interest the written justification in your packet notes that the Alaska LNG project is advancing on an accelerated timeline with public statements indicating
an FID in early 2026 immediate access to specialized expertise is necessary to protect the state's fiscal and governance interests.
A standard competitive process would take a minimum of several months and would materially
impair the legislature's ability to receive timely actionable advice during a critical
window.
It notes PEGAS' prior work, subject matter expertise and familiarity with Alaska's institutional
framework and that that allows the firm to provide immediate value without onboarding
delay.
For these reasons, the chair who also serves as the procurement officer for the committee
has determined that the exemption is found to be both warranted in the best interest of the LBNA committee and the state of Alaska.
Thank you. I will do my best to answer any questions.
Thank You. Before we move on, I'd like to note that Representative Foster joined the meeting at 205 and an audience.
Representative Stuitz joined meeting 205.
And also, thank you, Representative Bynum joined in meeting. He's in this audience, but with that said, are there any comments or questions?
for Senator Stadman.
Thank you, Madam Chairman.
I think the community should support this.
When we take a look at the history,
and we go back a decade and a half or so dealing with gas
line and oil issues, we've had a substantial turnover
within the legislature.
There's a very small group of us that were around from that,
from back then.
And that leads a lot of gaposis in the.
in the knowledge base of what we have to deal with and the decisions we
have make and in that issues that we
have grapple with. And I think Pegasus will be helpful in
that. I also think this is just a first step of
many because what concerns me is when we
have presentations that dumb me down this project,
use outdated financial information and tell us we don't have any
maybe lowering some property taxes is
absurd and
We need to start coming up to up-to-speed rather than wait for
the project to move along and then we get way behind the eight ball and and
put ourselves in a
Financial disadvantage dealing with the issue so that Madam Chairman I think the
Committee should support this
Also, I think bagguses did a good job in their previous work that the legislature had him do. Thank you any other comments or questions
Over senator Hoffman, thank you madam chair
We've been waiting for this project for some time
so you
mentioned in your
comments near the end that we will be getting
Fid earlier early in 2026. Who do you anticipate making that?
announcement
Senator Hoffman through the chair
Well, I don't have any insider information senator Hoffman thank you. Thank you
We'll wait I'll Wait with the bed breath
And any other comments or questions?
Okay, we move my objection or there any others actions
Great seeing none the motion to enter into contract with Pegasus global holdings for an amount not to exceed
$250,000 is approved
Do any members have any comments before we adjourn?
Okay, well in consultation with Chris it looks like we'll need to have our next meeting during the first week of February
Hopefully on February 3rd, but my staff will be reaching out to each of you
to confirm the date, the time, and the agenda topics.
And before we end the meeting, I just want to thank all of you
for always making it to me.
These meetings are priority,
and I want thank my LB&A staff, Chantal,
and particularly Jeff, who, honestly, without him,
I would not be able to do the job that I do.
So, Jeff thank you very much.
With that said, nothing else before the committee,
we are adjourned at 10.13 AM.