I call the Senate committee meeting to order.
Today is Wednesday, February 4th, 2026, and it's 3.30 PM.
Welcome to the committee.
Please turn off your cell phones.
Committee members present today.
Senator Rauscher, Senator Dunbar,
Senator Myers,
Senator Kawasaki,
Senator Clayman,
I expect Senator Wilkowski along shortly,
and I am the Chair,
Senator Geese,
and we have a quorum to conduct business.
Heather and Susan are helping us out
by keeping the minutes and running the audio for us.
So our presentation today
is from the regulatory commission of Alaska.
I asked them to come and explain to us their authority under Alaska Statute Chapter 11 SLA-13.
This pertains to the RCA's authority to regulate an in-state pipeline contract carriers.
She is the hearing officer, hearing examiner two, administrative law in the administrative
law for the RCA, Commissioner John Espindola.
He is a commissioner with the RCA and Commissioner, John Springsteen.
So folks, if you would come forward from the far end of the room, welcome.
And they have a very detailed power presentation, PowerPoint to give us.
So, as we go through the slides, could we pause at the end of each to see if members have a question?
And as you speak, if you would identify yourself for the record, that's just for record keeping, plus the public is the same, and then they know who's speaking.
Welcome. Yes.
For the record, my name is John Espindola, Chair of the Regulatory Commission of Alaska.
Today I am joined by my colleague, Commissioner John Springsteen, who is also available to answer any questions the committee may have.
The majority of presentation will be presented by the Commission's Chief Administrative Law Judge Laura Barson.
And with that, I will turn it over to Chief ALJ Laura Barson.
Great. Welcome.
Good afternoon. Thank you.
For the record, my name is Laura Barsen, I'm the hearing examiner for the regulatory commission of Alaska.
And I will begin discussion today with a portion of the legislative findings and intent behind HB 4.
And these reveal that the real impetus behind the HB4, as reflected in these legislative
findings in intent, it really focused on the development of a natural gas pipeline by AGDC.
Alaska Gas Line Development Corporation, and this legislative intent is reflected in the discussion that we will be having today regarding the RCA's role in
the regulation, in regulations and in authority that has been defined by this particular bill.
So we'll continue.
of HB4, the Directly Impact of the Commission.
Thank you.
And two sections speak to the RCA's substantive role.
These sections added a new chapter to Title 42,
and that is Chapter 8,
which I will refer to today as both Chapter eight
as well as AS4208.
And this particular section of HB4 really defined the commission's authority over an in-state pipeline contract carrier.
The second substantive section that really impacted the RCA was an amendment to Chapter 5 to add a new section.
In addition to these two sections,
we also had three sections that I would classify
as conforming amendments.
And these sections include limited modifications
to Title 42, Chapter 4, to title 42 Chapter 5,
which is the Alaska Public Regulatory Act.
and Title 42, Chapter 6, which is the Pipeline Act,
which are act that governs Common Carrier Pipelines.
Good.
Next slide, please.
Yep, we're on Slide 4 now.
Yes, thank you.
So starting with the most significant impact to the RCA
that was contained in HB 4,
we look at the Chapter 42.08.
And this particular chapter of statutes is really the foundation of RCA or authority that was contained in HB4.
Next slide.
Yes, a question. Senator Wilkowski.
Can you go back one slide?
So this 4208 deals with contract carriers and I think they're
My understanding of HB4 was that there is a distinction between contract carriers and common carriers.
Is that accurate?
And well, I guess that's the first question I'm curious to your response.
Through the chair, Senator, that is correct.
A common carrier is typically one that provides service pursuant to the terms of its tariff.
And that is a tariff that the RCA approves.
And, that tariff includes the rates for transportation.
And a contract carrier is typically under a legal obligation
to provide carriage to, within certain parameters,
any individual shipper who wishes to use the pipeline.
that the process that we'll discuss regarding the certification and the of a
contract carrier is a little bit different and
the obligations imposed on a contract
carrier are not as significant as I would argue those that are imposed
on the common carrier. Follow-up, Senator Wilkowski.
And is it fair to assume that
Is Glenn Farniz acting as a contract carrier?
And if so, I'm curious how you came to that conclusion.
Through the chair, Senator Wilkowski, to the extent we would receive a filing under 4205 or 4208.
Depending on the nature of the filing, we may have a review authority.
However,
we don't want to speculate on a filing until it actually comes in front of us.
So I know you referenced a project, but there are potentially a couple variations of
the projects. And so without having a file in in
front us,
we really can't comment on what authority we would have to review that filing under.
Follow-up. Senator Wilkowski. So just so just to work clear so this presentation you're saying well
It could be 42 I contract care, but it could also be a common career care. You just don't know at this point
Through the chair senator Wilkowski, I would say that's a fair assessment
And just one last one. Yes, senator will koske. Have you heard anything from eight star?
Has there been has the RC had any communication on with a eight-star Glenfarne AGDC about what type of care they anticipate?
So through the chair, Senator Wilkowski, today we issued an informational docket that is calling N-Star and
Chew Natural Electric Association into provide us information on the two potential projects you just referred to.
And that literally was issued today, so we can, I'm sorry, go ahead.
Senator Wielikowski.
Those are,
I believe the import LNG projects, that's not the gas line project from the North Slope, correct.
We through the chair, Senator Wilakowski in house energy last week and stars president did speak to a potential filing that would come to the commission that
would potentially encompass both the projects that we'll be speaking to today.
Further questions?
All right, seeing none, we will go ahead for slide five.
Again, for the record, Laura Barson.
So we see that RCA authority is really evidenced
through its ability to make decisions.
And the decisions that the R CA has been authorized
to makes specifically under HB4
include both mandatory and permissive decisions,
and overall, the RCAs decision-making delegated
in this bill includes everything that you see
on this particular slide.
which is the ability to suspend, approve, deny, and or reject an initial recourse tariff,
the Ability to Conduct Investigations of Certain Types of Disputes and Issues.
The Ability To Establish Notice Requirements, putting general members of the public on notice of certain types of filings.
The ability To Review, Approve and Potentially Disapprove Contracts.
The ability to issue, transfer, modify, and potentially revoke a certificate of public convenience and necessity.
The the ability issue permits for construction, enlargement, extension,
connection and interconnection, operation or abandonment of a pipeline,
specifically an in-state contract carrier pipeline.
The ability to review required reporting that is imposed on an in-state contract carrier,
the ability extend timelines in certain limited situations,
and then the RCA also received certain general administrative functions.
including the ability to adopt regulations,
administer the regulatory cost charge,
things of this nature.
And as we move forward in the presentation,
we'll provide a bit more detail
regarding each of these authorities.
Great, I don't see any questions.
I begin discussion today specifically of
Alaska Statute 4208 with a review of the recourse tariff.
Now, we start with general permissive authority.
The RCA may review and approve a recourse tariff.
The RCAA may also reject all or part of a recourse tariff that is found to be inconsistent
with Chapter 8 and any recourse tariffs, whether it's the entire tariff or a portion
of the tariff, that in fact is rejected, becomes null and void.
the context of this authority that's been delegated
and these two particular statutes
or in these particular instances,
it's important to really understand the role
and the purpose of what the recourse tariff is.
And we have defined a recourse tariffs,
or I have to find a recourse tariff on this particular slide
by the requirements that have been found in statute.
And these are requirements
that all come out of Alaska statute 4208.
So, a recourse tariff is required to contain the procedures for conducting open seasons,
for uncommitted firm transportation, and for potential expansion of a pipeline.
A recourse tariffs is require to obtain rates that are specifically determined on a cost
The recourse tariff is required to contain all rates, rules, regulations, terms, and conditions pertaining to the service being provided, which in this case would be the transportation of natural gas.
To summarize, in essence, this recourse tariff really establishes the framework for the operation of an in-state natural gas pipeline.
Senator Dunbar, question?
Thank you, Madam Chair.
So, recourse tariffs is not a term I'm familiar with.
I think we know what a tariff is, but can you explain what the recourse
tariff versus a traditional tariff?
And again, this is Laura Barson for the record.
The recourse tariff is essentially establishing the procedure
behind offering a particular service.
However, the recourse tariffs is, I would say it's a baseline.
This might not be the best analogy.
I could consider it maybe similar.
to a manufacturer standard price on a vehicle to an MSRP where there's a
contracting process that we will discuss a little bit further and so the
recourse tariff is essentially an offer to provide service however there is an
ability for those shippers who wish to receive that service to negotiate more
favorable terms that differ from the terms and conditions including the
Follow-up senator Jenbar. So thank you madam chair and thank for the explanation and so
To simplify it even further. We're talking about the price to come through the pipeline is that correct?
So when you say recourse tariff or a standard price for shippers you mean in this case or in most cases the
Price for someone to get their
Gas through The pipeline and the terms to Get the gas through. The Pipeline are you talking About something else?
For the record, this is John Springsteen.
So generally, a recourse tariff is a cost of service-based rate.
The natural gas pipelines must keep on file.
It effectively acts as a ceiling rate, the maximum rate
ensures shippers have access to service at reasonable rates.
If they don't negotiate a custom contract,
the rates allow pipelines to recover costs and profit
while providing a baseline for regulation.
And then for natural gas, a recourse tariff would likely include
receding delivery points, operating pressures,
quality specifications, and other relevant conditions.
So I hope that's helpful.
I think to summarize your answer is yes.
And there's a lot more detail after the yes, is that correct?
Yeah.
For the record, John Springsteen, yes?
Okay, thank you.
Thank you, Madam Chair.
Senator Kawasaki. Thank you. And I don't know if it's further in the slides, but I had a question just on the tariff itself
Because it we're talking about a one that goes from a to Z like a pipeline from point A to point Z
We're in The Middle and Fairbanks. There's an off-take point allegedly going to be toward Fair Banks
How would the how would you develop a recourse tariff for the
pipeline from from the entire section, and then how would you how
would it deviate to the one that's going to go between say the
mainline to Fairbanks?
Through the chair and for the record.
This is Laura Barson again.
I don't believe that is a question that the three of us can
answer for you today.
That would be a function of how the filer and the proposed owner
particular pipeline chose to structure its tariff and what the filing the commission received looked like.
To my knowledge and upon information and belief, there are no specific directives that are included in 4208 that would require the
commission to necessarily implement different rates based on the mileage of transportation.
Follow-up senator Kawasaki. Thank you. The first slide in discussions
This is way back when when we were talking about some of the legislative findings
A lot of discussion was around the cost of
The cost of heating and the cost
of electricity and cost utilities
specifically in the interior.
So they were actually at 1.4
off-take points, one at the
Yukon River Bridge, Fairbanks, and
then one in Matsu Valley.
So I guess my
concern right now is that we're
talking about a pipeline that
serves south central
is not directly in Fair Banks, but
I guess I'm just trying to figure out
if it's going to pass through Fairbanks,
we'd at least get some benefit from that.
And I just wondering if the recourse tariffs already set
for the main line, will Fairbank's be on the hook
for paying for, the entire line or just portions
between there and then Anchorage, essentially, South Central?
John Espindola for the record.
So toward the end of the presentation,
ALJ Barson will get to the FERC approved project.
And we can probably dive into this question
a little bit further when we start talking about
what has been approved by FERC,
if that's amenable to you.
That's fine.
All right, Senator Klayman.
I wanna just go back a
little to that topic of a resource.
I'm not a resource, a recourse tariff versus an ordinary tariff.
If I am N star in front of you with a tariff for which that says what rate I can sell
gas to customers, you look at to some extent consumer interest in different features, whereas
on a recourse tariff like this, this is literally a pipeline that's only to provide, at least
At some point to the consumer that uses it for heating.
Does that mean for the recourse to air, we're only looking at the cost of transporting the
gas and the consume rate impacts on that or really don't become part of your evaluation?
Through the chair for
the record, this is Laura Barson.
The commission's review, specifically under 4208 or the in-state contract carrier, is
designed and is instructed to be based on a cost of service.
And so the cost-of-service, I don't know a better way to say this, the Cost-Of-Service
For the validity of all the individual elements that make up that entire cost of service
But that's not necessarily to say that an impact on
A rate that would it sounds like what would ultimately be paid by a public utility
Customer would be part of the analysis
Follow-up senator Klayman
So focusing on the recourse tariff
Again, although it's hypothetical in some sense, we're talking about the natural proposed natural gas line,
the elements of the recourse tariff would essentially be the cost of
getting it in the pipeline from the North Slope down to South Central, and that would come up with a price.
That would be a recourse Tariff,
and it would have different pieces of that stretch, but that wouldn't take once it got to south central.
There would a different tariff to get it to the consumer.
And the consumer, for the customer, they would be presented with this was the cost to get the gas to where we get it into the end-star pipes.
Through the chair, again, this is Laura Barson for
the record, I don't believe that that is a question I can answer based on the fact that as we sit here today, to my knowledge,
there is not a clearly defined project that will be moving forward.
Some of these hypothetical questions become difficult to answer because of that.
Okay, thank you.
Okay.
Through the Chair, Senator Klayman, there's nothing set in a recourse tariff that prevents
an entity from negotiating for a better rate through a contract process.
Senator Wilkowski.
Thank you, if you can give some general thoughts on.
The concern that I've heard that many of us have is cost overruns and who bears the cost of that.
We're hearing the project could cost $10.8 billion just for phase one, which is the Alaska portion.
Let's say it costs $20 billion.
Is it generally be accepted or are there general rules that the costs are just passed on to the consumers at that point,
Maybe you just talk a little bit about how the commission would look at that.
And if there's anything we can do to protect the lasting consumers from undue cost overruns.
Through the chair, Senator Wilakowski, John Espindola for the record.
So our authority to review gas supply agreements is delineated in AS 4205-141D.
And I'm just going to read a couple components of that statute so you have an idea of the lens that we would look through if something was filed that would impact customers.
So, with regard to 141D, when considering the approval of a rate or a gas supply contract proposed by a utility to provide a reliable supply of gas for reasonable prices in the public interest, the commission shall.
Recognize the public benefits of allowing utility to negotiate different pricing mechanisms
with different gas suppliers and to maintain a diversified portfolio of gas supply contracts
to protect customers from the risks of inadequate supply or excessive cost that may arise from
a single pricing mechanism.
and consider whether a utility could meet its responsibility to the public in a timely
manner without undue risk to public if the commission fails to approve a rate or a gas
supply contract. So when the filing would be impacting ratepayers, that's where our authority
would fall into place. Follow-up, Senator Wolkowski.
And I guess just in practice, our cost overruns typically part of a contract between
the utility and the pipeline builder, is it just standard practice that, well, it was
$10 billion over costs.
We're just going to pass the costs on, or is that I'm just sort of curious to how that
analysis works.
Through the chair of Senator Wilakowski, John Espindola for the record, when we do review
And so we do use that as one of the mechanisms when we're evaluating.
Ella?
Maybe for historical impact, for a historical perspective, I know taps was originally,
I think, projected to be $800 million, and then it ended up being 10 times that,
9 billion, more than 10, times.
Did the producers just simply get the tariff on the full 9 million or
did they get a tariff upon 800 million?
Do you know?
Through the chair, Laura Barson for the record.
With regard to TAPs, that was a project that continues to be regulated under our pipeline act,
which provides a different framework for rate regulation.
And the regulation as proposed in 4208 for a contract carrier would argue as much more a function of the commercial market.
With regard to TAPs, the Commission has authority to review the prudency of
particular elements that are included at an overall transportation rate and
as hopefully addresses some of your questions on one or more of our next slides,
there are specific directives that the commission has given in 42.08 to
review individual
components.
of the recourse terrifying and some of
the information that's contained within that filing.
And, yeah, to be clear, one of
the reviews that the commission is required to perform is review of
the cost study that is contained and that
is part of
the recourse terrifying.
And the costs study really is the basis of a transportation rate.
that ultimately is contained within the recourse tariff,
but it has been discussed before.
The recourse tariffs sets your baseline,
but the process can involve more negotiation
with the individual shippers
and the ultimate pipeline carrier,
as opposed to a common carrier
where there is one tariff
and most customers are subject
to that particular rate or set of rates
that was contained in the tariff.
Senator Klayman just very quickly you read a citation. Can you repeat the statutory site that you've read?
through the chair
Senator klaymen it is
as
subsection D and that is in the statute that speaks to the general powers of the Commission
But that subsection is specific to gas supply contracts and follow yes follow claim in D Delta or V Bravo
He isn't Delta. Thank you
I'm not seeing further questions, I'll let you go forward.
Okay.
Through the chair for the record, it's Laura Barson.
Next slide, please.
And so here we start a little bit more of a substantive discussion of our recourse tariff filings that the commission may see under 4208.
And the first recourse tariff filing would be the quote initial recourse
tariff. And we start here because it appears as though this was the
first anticipated filing by an entity who may be regulated as an in-state
contract carrier as set forth in the framework that was established in 4208.
And there are specific directives to the commission.
Here, the commission shall review the initial recourse tariff and verify that the proposed
terms and conditions of service are not unduly discriminatory.
That would be a fact specific determination for the Commission to make based upon the
filing.
Here we see a directive that that commission should approve an initial recourse tariff
that tariff includes a proposed term or condition of service that is unduly discriminatory,
or it includes the proposed rate element that does not comply with the rate elements and with
the directives of 4208. I would say on this particular slide the most significant statement
is that second bullet. The commission is required and shall review the supporting cost study that
and the commission is directed to focus
on the proposed rate of return on equity
and consistency with the
proposed rates of returns on
equity with general guidelines
and decisional decisions set forth by FERC
or the Federal Energy Regulatory Commission.
And the Commission is also to look and see
that the cost study incorporates
a reasonable depreciation methodology,
depreciation life.
And that there's a reasonable capital structure used in the recourse tariff
Senator Wilakowski, what is the
What is that proposed what does a typical rate of return for a project like this gas project? I'm talking from North Slope gas down to
South Central let's say
Through the chair Laura barson for the record. I don't believe that's
A question that I personally can answer at this time again based on the fact that
A project like this appears to be a matter of first impression, both for the state and for others.
And at this time, I'm not aware of a defined project that is definitively moving forward,
where we can really look to specific facts.
Follow-up, Senator Wilakowski.
What are some other typical rates of return you see for gas lines in Alaska?
the rate of return for N star natural gas, which is a investor owned utility as opposed
to a co-op is approximately 11.875, but the number varies throughout the different industries
that we regulate.
Follow-up, Senator Wilkowski.
So if Alaska were to take an interest in the pipeline, let's say we took a 25% interest,
what Alaska would be getting would
be 25% of whatever the rate of return might be.
So if it's 12%, then Alaska, that's
what our return would
be off of our 25 percent share.
Is that fair to say?
Through the chair, Senator Wilkowski,
that is a very speculative question that
would being negotiated between the project developer,
which we have no knowledge or visibility of.
Senator.
Rousher.
Thank you, thank you.
Thank, sorry.
Thank.
Thank You, Madam Chair.
Yes.
So I just want to do good.
This is for on this recourse tariff sheet here.
I want you to get a better understanding of maybe a purpose.
So, it protects the consumer by ensuring that a default is available if a contract cannot be negotiated.
Is that the deal there?
Through the chair, Laura Barson, for the record.
I don't know if I would say it's necessarily a
default if something can't be negotiated.
If a shipper elects not to have a specific contract
that it has negotiated with an in-state contract carrier,
that shiver can use the recourse tariff
and those just become the baseline.
So in essence, yes, but I would say there's more,
there is a greater ability in terms of decision-making
on that particular shiper, whether it's worth
or whether that Shipper desires to pursue a
specific contact.
What could think I'm good. Thank you
It could I just ask a question it says permissible rates of returns as determined by the FERC so
What do you know what the fERC sets for permissible rate of return?
Through the chair Laura Barson for the record as I sit here today. I do not know these specific rates have returned
For these types of projects generally
But to the degree that there is some baseline, I don't know
the relationship or I guess the
the similarities between what might happen here in Alaska and the other pipelines that are regulated under FERC
jurisdiction
But it says you should verify the proposed rate of return is
Somewhere, it must be written down by the FERC.
Here's what the permissible degrees are of right to return.
Through the chair, Senator Geesele, that's a great question, but we don't have that information in front of us at this time.
We're happy to get that, information to the committee.
Yes, I would request that then.
Please, thank you.
Senator Wollicowski.
Thank you,
I really appreciate your testifying.
You're helping me understand this a lot better.
I want to try to simplify the process as I see it and maybe correct me if I'm wrong.
So assuming there's a gas line from the North Slope, a large gasline, Glenfarn, from
the north slope down to South Central, and a utility and star two guy at the MEA, whoever
decides they want enter into a contract with, I guess, eight star or GlenFarn.
We don't know exactly what the structure might be.
And maybe this is where you can help me out in that contract. They might have they might
have provisions that would say
We will if there's a cost overrun it will be borne by the ratepayers or if
there is a Cost overrun, it'll be born by
The Glenfarn is that in my eyes that's what you might expect in a contract or what
You could could see in our contract
Through the chair Laura Barson for the record as as we sit here today
I don't think we can forecast what may or may not be in these contracts. It's going to be a result of
the commercial negotiations that occur
I understand that and okay, let me ask you maybe get out it a little different way
Let's assume then that a utility negotiates a
Contract that says cost overruns shall be borne by the
by the rate payers, the consumers.
Glen Farm doesn't really care, because they're just
going to pass the cost on.
The utility, I know, certainly reports to their, you know
and is elected by their ratepayers.
But in a sense, they are just passing the costs on,
I'm just curious, who represents the
consumers of this aspect?
Is there someone, is that your job?
Is that the attorney general's job,
is someone there saying, You know what?
We don't like that contract provision,
It could end up costing the consumers a very expensive rate
Through the chair senator Giesle and senator Wieckowski, so
Last week at our public meeting
Mr. Sims did present in front of the Commission and I asked him about the particular contract
I haven't seen the contract and so this is a speculative answer, but assuming they file a gas supply contract
It's generally a 45 day timeline for us to determine whether or
not we want to investigate the filing more.
We do allow public comments throughout the entire review process, but if we did
suspend that contract, then the regulatory affairs and public advocacy
section of the Department of Law is generally invited to participate in some of these dockets.
but that review would fall on the commission initially to determine whether or not next steps
are needed to vet the filing further or approve the file. But again, because we haven't seen
anything in front of us, it's very hard to speculate on anything that will be coming in
front us. And if you want to add to that through the chair for the record,
The framework established in 4208 is specifically for transportation.
It does not necessarily speak to sale of a commodity.
And that becomes important because the commission does have different authority in different sections.
Whether we're dealing with public utilities or whether we are just merely regulating the specific pipeline carrier.
And so I don't think that necessarily adds any additional context to your question,
but as I'm discussing the framework that was established in HB4
and I am specifically discussing 4208, I I talking about the commission's regulation only
of the transportation provided by the particular pipeline carrier.
Follow-up, Senator Wilkowski?
Yeah, and that's probably the transportation that is across the pipeline.
That's the biggest aspect, so that is probably the
biggest component in the sale of gas.
I'm just curious, timing-wise, again,
north slope gas line coming down from the north
slope to south central, only because I represent south
central.
Parties would come in for a contract and they say,
OK, cost overruns shall be paid for by the repairs.
How do you know the absolute cost at that time?
what the pipeline would be, or could we find out maybe a year later or two years
later after there's no objection by the public because public's like oh okay
that's reasonable, but then they get the bill and they're like wait a second
this is supposed to cost ten billion dollars and all of a sudden it's twenty
five or thirty billion and instead of gas being twelve thirteen dollars it
's 20 about twenty dollars. I'm curious about the timing of that, I mean
Through the chair, Senator, again, for the record, this is Laura Barson.
There are various reviews that the RCA is allowed to perform under 4208.
And there is a review of the initial recourse tariff, and we'll get to in a couple slides.
There is review that commission performs of a revised recourse tariffs.
And a revised recourse tariff comes into play after there is actual construction of a pipeline.
And so the estimates that are contained for things like construction in the initial recourse
tariff get revised.
And there's a process for the commission's review of that.
4208 also sets forth a
process by which the Commission is to review the specific contracts between pipeline carrier.
between the pipeline carrier, excuse me,
and individual shippers.
And when we get to that, there's a little bit more detail
in terms of what the commission or what
the RCA can look at, and what
the RCAA cannot essentially look
at.
So I believe we may be providing a bit
more clarity as we move through the presentation for you.
Senator Dunbar, did you have a question?
I do, ma'am, Chair.
I think I'll hold off a few more slides.
All right, Senator Klayman
And I roll back to there were one of the one other three made comments about that the
recourse tariff essentially becomes the
the maximum price but one can negotiate a lower price and
And in the context of it
It sounds like the initial recourse Tariff here that tariff is based on
calculations that say this is how much is reasonable to charge to transport the
gas in that pipeline based on the information about how
much for us to build the pipeline in a time frame with which it's reasonable
to get paid back the cost of building through what we want transports but
what I'm hearing is that's based upon a presumption of you all would make some
analysis of how many gas was coming through to determine the reasonableness
customer were to come to that pipeline and say, well, I actually have this quantity of gas.
It was substantially more than what might have been the basis upon which the tariff was
that that supplier might be saying,
I want you to give me a better price because I'm giving you more gas than you were expecting,
so discount the price.
They have a maximum price they know they're going to be under, but if they can provide
more cash, they might able to negotiate a
It wouldn't require coming back to the RCA to get a new tariff because the person the company with the gas could actually
Get under the rate, but they couldn't go above the right
Or the tariff not the raid
Through the chair senator claiming this is John Springsteen for the record
Yes, so the the Tariff rate acts as an effective ceiling when it comes to a
contracted rate
by an entity that's negotiated that
with this in-state contract carrier.
We would have review authority, but it would,
and there's some discussion further on
about what happens when the in state pipeline contract
carrier wants to revise their recourse rate.
So that a separate item that will address further
in the discussion.
Sounds like a lot of these questions mean more apparent or answers. Do we get more prepared?
Yes, thank you senator Klayman, so I'll let you go ahead and proceed. Let's see you moving to slide eight
Through the chair Laura Larson for the record, yes, I believe we are now at slide 8. Thank you
So as we just have briefly discussed the second type of
Terrificively look at is the revised recourse tariff
And this is a subsequent filing by an entity as it navigates further down the path of the
projected development of an in-state contract carrier pipeline.
And in this instance, we also see additional directives that are specifically mandated
by statute as contained in 42.08.
And that is the review of a revised recourse tariff is essentially consistent with the
There is one exception and that is the depreciable life of the pipeline and essentially what
that statute indicates is that we look at the timeframe between the filing of
the initial recourse tariff and the revised recourse Tariff and we
look the change in depreciable life just through the passage of time between
the dates of those filings.
The Commission is also required to verify that the revised recourse tariff does include the same cost elements that were found in that first initial tariff and
Then the Commission
Is required
To deny the revised recourse Tariff
Into circumstances the first is when there is a new or revised term
that is unduly discriminatory, which is again a fact specific analysis that would be based
on the filing and the commission is also required to deny a revised tariff rate that does not
use a previously approved rate element.
And so when that initial recourse tariff is reviewed and we have, there is a subsequent
There is a comparison of each rate element that ultimately goes
into the rate that is being charged,
and there needs to be similarity between those elements.
I should clarify, unless it is specifically proven
by the in-state contract carrier that the new value
that it's contained in that revised recourse tariff is just
and reasonable.
Senator Kawasaki.
Thanks.
I'm going to re-ask my question because I think it applies now
Of course, Fairbanks is in the middle of that plan.
It goes from North Slope all the way down to South Central.
If we were to not, if the pipeline were
to have made that plant until a later time,
would it be considered discriminatory?
And would they need a would-it-be?
I guess at what time does a Fairbanks need to jump in and really say it's going to go to Fairbank's
This design is is Fairbanks driven
So that we're not
Sort of left holding the bag for a tariff that is between
The middle of nowhere in Fair Bank's Alaska because it goes right in our neighborhood, but it is not currently designed that way
through the Chair, Senator Kawasaki.
I guess the answer that I would have is you have entities
that provide natural gas in Fairbanks.
I always suspect, and this is speculative,
that they would be the ones that would
be negotiating for this type of service
to make a connection with existing natural
gas distribution and residential lines
throughout the Fairbank's area,
the Fairfax More Star borough.
There's nothing that we can do to control when an entity enters into a negotiation for contract carriage.
So that's kind of incumbent on the entity providing natural gas distribution services and fare banks.
Follow up, Senator Koseki.
House bill 4 House Bill 9 138 right now there were those four off takes if the off-take recipients weren't to have
With the wherewithal gotten
Established during this tariff discussion
would it come at a later time and
Then would the would we I guess my question is it sounds like we'd be added at it a different time
And that's not
the best position for us to be in as a City of Fairbanks, we want to
be at the very beginning of the discussions when the line is being
designed not just to anchorage but through to fairbanks. Would that be
correct statement? And that goes for the other four off-take points that were
Yeah, through the chair, Senator Kawasaki, John Springston, for the record.
I think I'll return to the statement that we don't have control over when a party enters
in to negotiate their position in contract carriage.
That's a commercial process that exists outside of the commission.
But for any party interested in engaging, I
think we all acknowledge it at times of essence and it's, a good idea to be engaged.
And aside from that, there's just a lot of speculation around
You know the the question you've asked and the answer I've provided
Thank you
Send your claim
So there're references on the last couple of slides about unduly discriminatory discriminatory to whom
Through the chair Laura Barson for the record
Typically I believe discriminatory is something that is assessed through the lens of the shippers perspective
Or the Shippers in aggregate
All right, I see no further questions we can go on to the next slide
Through the chair for the record slower of our son. We're going to skip to slide 10
Which is actually what's up?
This slide addresses notice requirements and there are both notices that are required to the commission as an in-state contract carrier moves through
Its process. There are also notices
That the Commission issues so that there's general awareness of filings and such before the permission to The public
And so we see that
AS4208 does mandate that before any recourse tariff,
either initial or revised may go into effect.
There does need to be a notice that plainly indicates
when that recourse tariffs will go
into affect and that notice also has
to contain the full cost study
that accompanies the recourse Tariff filing
so that the public is aware
of the supporting cost information.
Additionally, there is an open-season process that we'll get to in a slide or two, and
the open season must be noticed to the commission.
And while statute does not specifically provide for further parameters, the Open Season is
noticed as to certain members of the public as it is a process designed to assess both
carrier provisions.
Senator Raucher, question?
Yeah, thank you through the chair.
I was just wondering, at what point in the process,
it says 90 days before it goes into effect,
but at one point, in process does the revised recourse
tariff or the recourse tariff have
to be put into the equation?
Laura Barstin for the record.
Senator, I don't believe there is a particular process
that is manded by 4208.
There is some leeway that the process that an in-state
contract carrier takes in terms of its filings
and the commission review of those filings
will reflect the commercial interest
in a particularly project.
What is clear through review of 42.08 is that that initial recourse tariff is probably the first filing that is going to be seen by the Commission
Because approval of that particular document must occur
before
Next certain next steps can to continue
The revised recourse Tariff is a little bit more difficult to pin down at a minimum
A revised recourse tariff will come in following the conclusion of construction.
But what will later be discussed is the commission's ability to require a subsequent filing after
that first revised recourse tariff is very limited.
Thank you, ma'am Chair.
Senator Wilakowski.
Thank You.
It says must notice the commission saying gases for sale and companies that or producers have the right to
bid for gas I guess to go into the pipeline
This says there's a requirement that there must be noticed to the Commission of that and we're here
We've heard that. There's already been
Maybe some contracts for guests. How can that be done without an open season or was an Open Season Commission noticed?
Through the chair Laura bars for the record
The initial recourse tariff is our first filing
The open season typically occurs next and
Until that initial recourse tariff has approved. We're not going to be seeing any contracts
Because the review and evaluation of many of the contracts that will come into the commission
make reference to the recourse tariff.
And so we use the recourse tariff,
and we're instructed to use
the recursive tariff as a baseline.
So the recourse tariff is step number one.
The open season presumably could be step
number two, which would be the in-state contract carrier,
noticing the proposed pipeline to
the public in terms of the route,
the points of delivery.
the estimated cost, the general terms and conditions of how service will be offered.
And it's the open season process that's really designed to assess what the commercial interest is in a project.
Through the Chair and Senator Wielikowski.
And then when we're talking about open seasons, we are talking open Season 4 available capacity on the pipeline.
So that is the scope of this statute.
A follow-up, Senator Wieckowski.
Yeah, and I'm just trying to understand how, for example, Glenfar,
and they should have press release saying they had a non-binding letter
of intent with NSTAR for a 30-year supply of gas.
I just, I am trying understand
how that could be possible without an open season having occurred.
Through the chair of Senator Wilkowski, we have only seen what you've seen in the public
advertisements and the Public Notices we haven't formally seen anything in front of us
So I don't want to speculate on responding to that question because we hadn't formerly seen a filing in
front us
Follow-up senator Wilakowski just to be clear
Open season is the time when the pipeline owner
Or the pipeline builder, I guess, goes out and gets the contracts for the gas, right?
Or puts out to bid or says, hey, we're open to take gas bids.
Is that how 4208 is contemplated?
Through the chair, Laura Barson for The Record, Senator, the open season is merely designed
and so it's it is distinguishable from the actual commodity
and the open season
let me take a step back
can you repeat your question I apologize I'm just wondering how
Glenfarn has a non-binding contract for gas
without having an open season, which seems to be a prerequisite under 4208.
But maybe I'm wrong, and correct me if I am wrong.
Yeah, through the Chair, Senator Lewalkowski, we haven't seen anything,
and so it's really difficult for us to respond to something that we have not seen in front of us.
Senator Myers.
Thank you, Madam Chair.
In order to move from a non-binding contract to a binding contract would we then have to have the open season and the
recourse tariff in between now and then?
Through the chair Laura Barson for the record I
Don't think that the contract that has been discussed necessarily falls within this particular framework
And without having more information as to the nature of that particular contract,
this framework applies to construction of a pipeline.
It doesn't necessarily speak to gas that may be imported or maybe delivered to
the state by other means. And this statutory framework also does not address
the purchase of gas from North Slope producers. It really just is the structure
of the pipeline that could move that gas within the State.
Does that answer your question in any way?
I'll think about it.
I think of it, thank you.
All right.
I will let you continue.
Through the chair, Laura Varson for the record.
And so as we conclude our discussion
of notice requirements, we look at notices
that ultimately come from the commission
to members of the public.
And those notices would include an application for a certificate,
an Application to Discontinue or Permanently Abandoned Service if a pipeline and when a
pipeline is established.
And then the commission also has permissive authority to prescribe requirements for both
the form of the notice and the method of communicating a notice in these instances.
Barsan, before you go on, we're talking about a contract carrier.
How would it be different if this were a common carrier? Am I understanding that a
common carrier is building a pipeline and they'll take gas from wherever it comes from.
Anybody can ship on it. Whereas a contact carrier is
to transport. I'm not sure what the difference is. Would this sequence of events be different
if it were common carrier? Through the chair, Laura Barst for the
record. Yes, it definitively would be. We do see a different process when we have common
carriers that have come before the commission looking to obtain certificates, which would
of a pipeline and transportation on that pipeline.
But that certificate is requested before construction.
To the chair, Laura Barson, that is correct.
Thank you.
So we're now turning our attention to those contracts
that the commission does have the authority to review
And 4208 really speaks to two types of contracts.
One is called a precedent agreement, and one is a pre-subscription agreement.
So there is definition that is contained within the act,
and that a precedent agreement means a contractual commitment.
It specifically includes a Pre-Subscription Agreement to acquire firm transportation capacity.
And is executed between an in-state natural gas pipeline carrier and another person.
And this contract establishes the rates, terms, and conditions for service.
And as we discussed earlier, this information is also found in the initial recourse tariff.
However, private individuals can then contract for slightly different terms through this process.
And when we look to the difference between a precedent agreement and a pre-subscription agreement,
it comes down to timing as to when that agreement is entered into.
Pre-subscription agreements are typically entered into prior to the conduct of an open season.
They do fall after the approval that will both the filing and the
approval of the initial recourse tariff because as we discussed earlier that
particular document gets looked at heavily when these contracts come in for
review and that is required in this set of in the statute. So the pre- subscription
agreement comes in prior
to an Open Season.
But during and after an open season is when precedent agreements are filed
Senator Dunbar, thank you madam chair, and this goes back to senator Wilakowski's
Earlier point and my colleagues can correct me if I'm misremembering something
But I believe on Monday. We had the three major natural gas producers in our slope here and two of the threes said
They had precedented agreements with Glenfarn
But you're saying that that doesn't usually happen until after the approval of the recourse tariff is the distinction there because they are selling
Versus buying that is they're selling the gas top of a pipeline and we are potentially buying the bottom
The end of it rather
So is that why they were able to do these precedent agreements before the open season and do you have any role?
and you oversight role in those precedent agreements that they were speaking about on Monday.
Through the chair, Laura Barson for the record. Senator, those president agreements would fall
outside of our authority specifically under this set of statutes. These statutes address
merely transportation, so movement of that commodity.
But this set of statutes does not govern in any way or provide the Commission with authority
Necessary well over that particular commodity and when I say these statutes, I'm looking specifically to forty two oh eight
Which is what we're discussing right now. This is merely the transportation
And so those agreements would be outside the context of the framework that we are discussing. Okay, thank you madam chair
Senator Myers. Thank you, so
just trying to clarify a little bit in my own head what's going on here it sounds like we've got
kind of two different models that are being talked about amongst us at the table one is
well i'm going to change the terms a bit because i drive a truck
okay so one one model is i drove my truck and somebody constructs with me and pays me a certain
of that agreement is between the shipper and the end customer and I'm only being paid for a service.
The other piece that I am hearing that may be going around here is if I as the truck driver or
trucking company owner would actually buy the freight from the initial shiver and then I
am turning around and selling it to the End customer. And it sounds like amongst the table
aspects of both of those models and maybe we could just kind of bring it back to which
of these two models are we talking about here.
It sounds more like the I am just the driver.
I'm simply being paid for a service model and I m not necessarily certain given the given
what has been announced in the public if that is the model actually being followed.
Through the chair, Senator Myers, I would say that's a fair assessment of
4208 and the transportation of the commodity, which is separate okay. Thank you
so
Are there statutes that give you authority over the the agreements before you get on the truck?
It's beautiful.
understood. It's a great analogy. Yeah, to the chair. I think we're venturing into an area
that's outside of the scope of this 4208 discussion when we were talking about the general powers
of The Authority. When we have a public utility, say a natural gas provider, where we are able to
review contracts in terms of pricing, and then we can get some more clarity on what those inputs
like an N star.
So if N-star really couldn't make a commitment
to purchase X amount of gas at a certain price
at this point, because they don't know what the price is
at the input.
Yeah, to the chair, this is John Springsteen for the record.
We have not seen anything produced by N-Star regarding,
so any answer would be speculative.
But these parties are will to negotiate these types
of contracts, but we don't know what is going to be
within the contracts that we understand
Have in front of us at some point in time. So we just don't know yet. Gotcha. Okay. Thank you
Senator Wilakowski, yeah, and I'm madam chair. Just maybe I could for the committee's
Reference it's there's a section in 40 208. It's 42 away 300 open seasons and it
It is a fairly lengthy section which talks about how open season are to be handled. That's as an in-state
Natural gas pipeline carrier shall include in its approved recourse tariff the procedure for conducting open seasons for
Uncommitted firm transportation service and for expansion at a minimum the in-state natural gas
pipeline carriers shall publish reasonable public notice in advance of an open season
contain the approved recourse rate, the proposed form of the precedent agreement,
the propose form for the firm transportation service agreement and other information sufficient to show the
proposed route, capacity operating pressures in service state quality specifications and
other operating conditions that the pipeline carrier determines are relevant to an
evaluation of proposed service. And it goes on and on, and
on.
That is, I don't believe any of that has occurred.
That would that be correct that none of that has occurred?
Through the chair, Laura Barson for the record that is correct because this particular statute is addressing
Transportation on a pipeline that does not yet exist and so I believe the contracts that are being discussed right now
Are for The purchase of the commodity itself and
So there are different elements to this process one would be purchasing the Commodity to move
and then there's the act of actually moving that particular commodity and the scope of
4208 really is very limited to just potential movement of a commodity.
Follow-up, Senator Wilkowski. I don't know, N star is agreeing to buy the gas according to
Yeah, we really have to offer. It's the transportation like so anyway, it seems like an odd distinction
All right, I will let you proceed
Decide 12
Through the chair Laura Larson for the record yes we are on slide 12
This slide addresses both the commission or the RCAs permissive authority
And also the required action that the commission is to take when it receives the contract for review.
And that would be a precedent agreement, but also be pre-subscription agreement.
And so we have a provision that indicates that
the Commission may review and approve contracts filed by an in-state natural gas pipeline carrier.
We also have other provisions that require commission action.
to determine whether a particular contract is just and reasonable, and
the commission shall approve a contract as presented if it is
just unreasonable.
Alternatively, the Commission is required to disapprove the contract if
it's not just a reasonable.
that's pretty iffy, so you're not required to,
they aren't required
to provide you with those contracts necessarily.
Is that how this could be interpreted?
To the chair, this speaks only to the commission's review
of a contract, but it does not necessarily speak
to a requirement that an in-state contract
to carry your file, that contract with the Commission.
Okay, so this could be fixed by saying you shall reveal.
To the Chair, Laura Barson, for the record.
The later provisions that are discussed on this particular slide indicating that the commission shall review and may conduct an investigation and hearing to determine whether a contract is just and reasonable is also contained within the statutory framework.
And so there is a specific directive to the Commission in that particular provision.
Yes, Senator Rocha through the chair. So these two words may review and approve could be may
review in disapprove. Is that what that's saying? That's why the word may is in there because you
go either way. Through the Chair, senator Rousher, I would interpret it as such. Okay, thank you.
I see no further questions. Slide 13.
We've used the term Justin Reasonable on this previous slide to discuss what the commission's review of a contract is.
And Justin Reasonable is assessed via review in arm's length analysis.
And so we have a provision found in 4208 that indicates and directs the Commission to find that a precedent agreement or
related contract that is negotiated at arm length is Justin reasonable.
certain findings are made, one of those findings would be that unlawful market activity affected
the rate or unfair dealing such as fraud or duress affected the actual formation of the
contract.
And so this particular requirement applies to both precedent agreements as well as those
In terms of the analysis of what is an arm's length transaction,
this is also an analysis that is dictated in 4208.
And the statute directs us to look at whether a particular contract filed incorporates the approved recourse tariff.
And if it does, that contract is negotiated at arm length.
And this is why the filing of the recourse tariff relative to these contracts is key is we're using the approved language and the
approved terms and conditions, et cetera, in that recourse tariffs to evaluate these later filings in these
contracts.
Next, a contract that does not incorporate the approve recourse
tariff is negotiated at arm's length if certain parameters are met.
One is that the contract is between two state-owned parties.
The second is that the contracting parties are not affiliated.
And then the third is if the contracting parties
are affiliated and the contracts is substantially similar
to those contracts negotiated between unaffiliated parties
and that formation was not impacted by any unlawful activity
or unfair dealing, then we can also find in that instance
that an arm's length transaction has occurred.
And so one limitation that is specifically directed in 4208 is that a contract whether it be a precedent agreement or a pre-subscription agreement is not arm's length and is therefore not just unreasonable.
If that contract is between an in-state pipeline contract carrier and a public utility and that the rate paid for transportation is greater than the recourse tariff that has been approved.
Senator Dunbar.
Thank you Madam Chair I have a question that I was going to ask on the
investigation slide but we skip that one and it's fine I think it fits here too
but it goes back to Senator Wilakowski's question about who is protecting the
consumer and so it really about what the RCAs role is or if they have
a role. So imagine that this pipeline gets built but there's significant cost
overruns and the price comes in at $20 or for the for
There is a lot of economically recoverable gas in the inlet at $20 per
There isn't as much at nine dollars or twelve dollars. There's a lotta twenty dollars in fact even import
LNG import becomes a little more competitive at that price point, right?
But what if the sellers on the North Slope are also the folks that control the Inlet gas?
and perhaps the people building the pipeline are also major players in the potential import
facility and so who is protecting the consumer if we build this giant pipeline but the price is
so high that it really doesn't make sense for us to buy this gas for a decade or more
we it makes much more sense to the consumers to get the gas from the inletor from import
Does they have any role in protecting the consumer in that set of circumstances, especially if the players that own the various
Projects are the same entities
Through the chair senator diesel there was a lot there in the question senator Dunbar
So first off we don't regulate the producers
However, as I mentioned in my opening comments, we did open up an investigation. I'm sorry an informational docket today
to understand the nuances between the two competing LNG
projects that would impact some utilities in South Central
Alaska. So I can't speak to all the costs at this point,
because we don't know what those are. But through this
informational docket process, we intend on vetting out these
concepts within the commission.
As a follow-up, Mr. Chair.
Senator Dunbar, thank you.
So I believe you have a role in regulating end-star is that correct or are they and the rates that they can charge the consumer
Is that right through the chair?
Senator Dunbar. Yes, we do regulate and star natural gas company. Is there a world in which a
very expensive pipeline causes the potential for very high rates to be passed on to the
the Consumer
But there are other forms of gas that could be conceivably used for a decade or more such that you would deny and star the ability to pass on those costs for the pipeline to the consumer.
Through the chair, Senator Dunbar, I don't want to make a pre-determination on any
Cost of gas at this point due to nothing being in front of us
But there's a lot of possibilities out there that could come before the Commission for us to review
Followed madam chair. Yes, senator Dunvar. Let me just reframe it a little bit
What we're looking for is a way to protect the consumer not stop the pipeline
I
Think we are all looking For some assurance that there is A backstop
and that perhaps you were part of that backstop.
Again, very hypothetical but a very high cost of gas coming down the pipeline.
Any pipeline, is there a world in which the RCA says no you cannot pay that
to that for that gas or you can pay it if you want but you
Through the chair senator Dunbar John Espindola for the record as I mentioned to senator Klayman earlier
We would look at that through the lens of forty two oh five one forty one D
And that is the statute where we review gas supply contracts with public utilities
So to answer your question
Yes, there would be an RCA nexus if there was a contract filed in front of us
That had different levels of cost in in the contract itself. Thank you. Thanks. You madam chair
Further questions on this page moving on to slide 14
Through the chair Laura Barson for the record
This slide further addresses the review of a contract and the Justin reasonable standard and there are some limited circumstances
Where a contact that is not negotiated at arm's length?
may still be found to be just and reasonable.
And to review a contract that is not negotiated
at arm's length, these statutes in 42.08 direct the RCA
to employ standards that are, quote, normally applied
under Alaska statute 4206.140, end quote.
And 42-06-140 is part of our pipeline act.
and the regulation of common carrier pipelines.
To review a contract that is not negotiated at arm's length,
the RCA is also required to consider the consequences of failing
to approve a particular contract.
The commission may also consider
the in-state natural gas pipeline carriers approved
recourse tariff and cost data that underlie that tariff.
if the contract is not incorporating that
incorporating the recourse tariff.
And so the RCA, excuse me, does have some ability
to find a contract that's not negotiated
at arm's length, just unreasonable,
but those limitations are quite limited.
Thank you, I see no questions.
Through the chair Laura Barson for the record up through this point. We have discussed the recourse tariff
The open season which is designed to it, you know, assess market interest, etc
We've also discussed contracts that can be filed both after the recourse tariff and then also after
The Open season and this brings us to the commission's analysis
For a certificate of public convenience and necessity
And while an in-state contract carrier or an entity that seeks to become an
in state contract carry or could file contracts at different stages of the
process that we're generally going over today, the next significant step that
we are going to see is this application for a certificate. And so a
for the construction and operation of an in-state natural gas pipeline facility,
and it also provides the operating authority to actually transport natural
gas.
And when we discuss certificates in this section,
I'm speaking both to the initial certificate
that would be the first filing for a certificate
by a proposed in-state contract carrier,
but I am also talking about later activity
that could occur in terms of transferring
that certificate, expanding the scope
of the authorization that that's certificate provides,
also potentially if there is a desire to abandon
a pipeline after it is no longer serving.
This framework applies to most of those instances.
And so a certificate is required to describe both the nature
and extent of the authority that is being granted.
And that has to include a description
of authorized service area and then the scope of operation
for the pipeline facility.
And the commission is directed to issue a
certificate to an applicant upon findings
to do the acts to perform the proposed service
and to conform to all of the provisions
that are established in 42.08,
as well as the requirements of a commission.
The commission's also required to issue that certificate
if it finds, in addition to this fit willing and able
evaluation, that the Proposed Service Operation
Construction, or if we're dealing with an extension.
Is or will be required for the public convenience and necessity and this is where I think we see a little bit of an
Analysis come in where we're looking to what the Public Needs and what would benefit them
So the certificate would have to be obtained before pipe was laid in the ground is that true?
To the chair Laura Barson for their record that is correct. Okay for your question, Senator Willakowski
How long is the process to get a certificate?
Through the chair of Senator Wilkowski, the maximum amount of time allowed under 42-8 is 180-day timeline once it's filed with the commissioner.
And we do have a slide on timelines later on in the presentation as well.
We have six minutes left.
Let's begin with timelines.
Please receive
Through the chair Laura varsen for the record so
We've discussed and I'll pick up speed if you'd like me to at this point that there are required findings that are subject to Commission discretion
We discussed this fit willing and able
Language that is included and so the Commission is directed to determine if an applicant is technically fit-willing and Abel
To take the actions perform the service and conform to the requirements of AS 42 8
The Commission is
In other instances where we're not dealing with the initial issuance of the certificate
But if we are dealing a transfer or something like that the Commission
Is required to find that a perspective transfer of a certificate in the future does not impair safe and efficient?
operation of that particular pipeline so in
The event that at some point we were dealing the transfer the certificates. That's the analysis
The commission is required to approve a transfer of a certificate if the assessment is that there is not a substantial change in ownership for the particular pipeline.
And before a Certificate holder, which is going to be a pipeline owner, is allowed to discontinue service or abandon.
or permanently discontinued service, there is a required finding that the commission must
make and that is that this service is no longer required for the public convenience and necessity.
Very good, I'll let you proceed.
So there are some additional findings that are subject to commission discretion specifically
as with regard to certificates, and that is that the commission may attach, quote,
reasonable terms and conditions to a certificate. Those terms
and condition must be consistent with 4208,
and they must also mutually benefit the pipeline facility and the public.
The commission is also authorized to amend a
To modify suspend or revoke a certificate and there's a good cause finding that's required before the commission is authorized to take an action like that
Next slide
This slide
To the chair
This side brings us to where we see some evidence of the legislative intent and purpose with regard to AGDC
and a pipeline extending from the North Slope.
There are certain findings that are contained in AS4208
that actually binding on the commission.
And these findings include that the Alaska Gas Line
Development Corporation is financially fit, willing, and able
to take the actions, perform the service,
and to conform to the requirements of 4208,
that The Alaska gas line development corporation
through its board of directors and officers
And that any proposed pipeline that the Alaska Gas Line Development Corporation specifically proposes that that proposed service,
the construction of that pipeline and the operation of the pipeline are required for the present and future public convenience and necessity.
is technical fitness, willingness, and ability
to perform the transportation of natural gas.
As defined in the recourse tariff,
as defined on the open notice,
as define in a certificate application,
and as well as any contracts that commission
has approved, both precedent and pre-subscription.
So at this point, we have a pipeline, a Thor, well,
we,
AGDC gave 75% ownership of this pipeline project to Glenfarn,
retaining 25% option for the state represented by AG DC.
So how do you effectuate this if they're not the one that's
actually building the pipeline?
to the chair, Laura Larson, for the record.
I don't believe that is a question
that the commission can answer at this time.
It would be, it's definitely,
definitely a matter of first impression.
And so we have the required findings
if Alaska Gas Line Development Corporation
is our applicant.
I do not know the scope of that.
That is not something that has been defined.
And we also know that required
findings if we're dealing with any other applicant,
so as we sit here today,
we know what would fall into one of those buckets.
It's unclear which one.
Gotcha, further questions on this slide?
Lots of questions, but nothing too articulate.
OK, very good.
Madam Chair, I'll just before we go on,
when you said it's not even AGDC anymore.
It's 8 star.
25% is 8-star.
And AGTC has a seat on 8 stars,
but isn't it 8 Star that has the whole thing?
8star is not AG DC.
Can we agree on that?
Through the chair, Senator Dunbar, we understand that the certificate was transferred from AGDC to 8-star in May of 2025.
So it's not?
For your purposes, going back to the previous slide, is it your legal interpretation that 8 star is AGD or is 8 Star 8
Statute in this statute does not apply yeah through the chair senator Dunbar
That's a deliberative question that I would prefer to not answer
independently outside of the rest of The Commission speaking to their interpretation as well
Thank you. It is 5 p.m. So we will need to stop here at slide 19
Thank You very much for this obviously this is a hot topic
This committee cares deeply about the consumer of the gas that potentially could be coming down this pipeline
And and we do hope that we can count on you to help us protect that consumer
I would like to have you back to finish this slide deck at some future time
Perhaps even through zoom you could do it, but we really appreciate your presentation and going through this with us
So, at this time, this concludes our agenda for today.
Our next meeting will be on Friday at 3.30 on February 6th.
The topic at that time will send a bill 2.27.
This is the governor's tax compact bill, sales tax, oil and gas tax.
So at the time of the meeting, we'll stand adjourned.
Let the record reflect.