{"id":24678,"date":"2015-11-01T09:02:48","date_gmt":"2015-11-01T17:02:48","guid":{"rendered":"http:\/\/spijue.wpengine.com\/news\/legislators-advisers-also-call-for-transcanada-buyout\/"},"modified":"2015-11-01T09:02:48","modified_gmt":"2015-11-01T17:02:48","slug":"legislators-advisers-also-call-for-transcanada-buyout","status":"publish","type":"post","link":"https:\/\/www.juneauempire.com\/news\/legislators-advisers-also-call-for-transcanada-buyout\/","title":{"rendered":"Legislator’s advisers also call for TransCanada buyout"},"content":{"rendered":"

The advisers hired by the Alaska Legislature to provide an independent view of the AKLNG natural gas project say they agree with the state in its call for a buyout of Canadian firm TransCanada.<\/p>\n

Janak Mayer and Nikos Tsafos, speaking Saturday to the Senate Finance Committee, said they\u2019re less bullish than the consultants hired by the state of Alaska, but the buyout still makes financial sense.<\/p>\n

\u201cIn large part, we agree with the substantive case the administration has made,\u201d said Tsafos, president of Analytica.<\/p>\n

\u201cFor the most part, we think what they\u2019ve presented is accurate,\u201d he said. \u201cWe would also agree with the state\u2019s financial advisers.\u201d<\/p>\n

The Legislature has convened in special session as it weighs whether to allocate $157.6 million to pay for the state\u2019s share of the first phase of AKLNG, a megaproject that would take gas from the North Slope to Cook Inlet at a cost of between $45 billion and $65 billion.<\/p>\n

To avoid paying up front for its one-quarter share in the project, the state entered into a contract with TransCanada. Under the terms of the agreement, TransCanada pays all of the state\u2019s direct costs until construction begins, then half of the state\u2019s share of construction costs. In return, the state gives TransCanada a cut of its revenue once gas starts flowing.<\/p>\n

If the pipeline deal falls apart for any reason, or if TransCanada wants to walk away from it, the state must repay TransCanada every dollar plus 7.1 percent interest.<\/p>\n

That\u2019s a high interest rate compared to the open market, which is why the state is considering a buyout and has earmarked $68 million of the legislative request to take an \u201cofframp\u201d built into the TransCanada contract. If the state doesn\u2019t act by Dec. 31, its next offramp is years (and hundreds of millions of dollars) later. <\/p>\n

The state and its advisers have claimed that a buyout could generate up to $400 million per year more for Alaska once the pipeline begins operating, but Mayer and Tsafos said that\u2019s a best-case scenario and isn\u2019t likely.<\/p>\n

In their presentation, they suggested that a more realistic figure is between $30 million and $130 million extra per year. \u201cYes, there is financial upside here, though it may be less compelling,\u201d Mayer said.<\/p>\n

Sen. Pete Kelly, R-Fairbanks, characterized that difference as \u201cfairly small\u201d but was rebutted by Sen. Anna MacKinnon, R-Anchorage and chairwoman of the Senate Finance Committee.<\/p>\n

\u201c$30 million or $130 million is a heck of a lot of money,\u201d she said. \u201cIf you\u2019re the Department of Education looking for savings, that could fund you for years to come.\u201d<\/p>\n

As the hearing came to a close, the committee took up a revised version of the TransCanada bill that calls for the state to complete the buyout by Dec. 1. That would give the Alaska Gasline Development Corporation \u2014 which will take over from TransCanada \u2014 time to prepare for an important vote scheduled for Dec. 4.<\/p>\n

In addition, the revised bill calls for the state to keep better track of AKLNG spending by state divisions, including the departments of Law, Natural Resources and Revenue. Those departments have requested a combined $13.6 million in special funding from the Legislature.<\/p>\n","protected":false},"excerpt":{"rendered":"

The advisers hired by the Alaska Legislature to provide an independent view of the AKLNG natural gas project say they agree with the state in its call for a buyout of Canadian firm TransCanada. Janak Mayer and Nikos Tsafos, speaking Saturday to the Senate Finance Committee, said they\u2019re less bullish than the consultants hired by […]<\/p>\n","protected":false},"author":426,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_stopmodifiedupdate":false,"_modified_date":"","wds_primary_category":4,"footnotes":""},"categories":[4],"tags":[34,230],"yst_prominent_words":[],"class_list":["post-24678","post","type-post","status-publish","format-standard","hentry","category-news","tag-alaska-legislature","tag-state-news"],"_links":{"self":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/24678","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/users\/426"}],"replies":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/comments?post=24678"}],"version-history":[{"count":0,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/24678\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media?parent=24678"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/categories?post=24678"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/tags?post=24678"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/yst_prominent_words?post=24678"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}