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

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

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

  2. 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)

  3. Governor’s Finance Package SB 23

  4. 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.”

  5. IGU & FNG CPCN Timeline

  6. RCA Applications

  7. RCA Applications

  8. RCA Applications

  9. RCA Applications

  10. RCA Applications

  11. 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

  12. 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

  13. AIDEA Report vs. IGU & FNG Plans

  14. 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)

  15. IGU Issues Matrix Conversions Market Sales LNG Storage Cost Estimate Operator Interest Rate Trucking Delivered Cost Mgmt

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

  17. www.InteriorGas.com

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