JUNEAU – The Alaska House of Representatives passed House Bill 394, a critical measure aimed at enhancing the energy security of Southcentral Alaska by bringing online additional gas storage capability in Cook Inlet amidst a looming natural gas shortage. This initiative underscores the Alaska House Majority’s commitment to ensuring the well-being of consumers all along the Railbelt communities of Alaska.
HB 394 addresses the urgent need for a clear regulatory framework for third-party natural gas storage, providing stability and predictability to the sector while making it more attractive to operators and investors. By granting oversight authority to the Regulatory Commission of Alaska (RCA), the bill establishes principles for determining just and reasonable rates, fostering fair pricing practices that benefit both consumers and businesses.
House Resources Chair, Representative Tom McKay (R-Anchorage), stressed the importance of the bill, asserting, “HB 394, as it is currently written, guarantees that additional gas storage via depleted reservoirs in Cook Inlet will be made available. This is a critical first step to enhancing energy security and reliability for the Railbelt as we face a looming gas production shortage in Cook Inlet. Whether the additional storage will be used for excess Cook Inlet gas produced in the summer months or imported LNG remains to be seen, but bringing the storage online as soon as possible is an absolute necessity.” McKay continued, “We currently only have one gas storage facility in southcentral, CINGSA, which should be worrisome for Alaskan’s considering the issues we experienced with that facility in February. We worked hard to enact legislation to greatly increase gas storage capacity in Cook Inlet which would work to avoid the gas supply ‘red alert’ we barely avoided last winter during that cold snap.”
HB 394 also introduces measures to protect sensitive financial information, striking a balance between commercial sensitivities and regulatory transparency. Additionally, the bill recognizes the complexities of state and federal regulations by exempting LNG import facilities already regulated by the federal government from state oversight. Finally, allowing our gas supply in Cook Inlet to fall short could be catastrophic if the distribution lines have to be shut-in and then later purged, operations such as that can take weeks and even months to complete.
With natural gas being a vital energy source for heating and power generation across the state, the approval of HB 394 is critical for securing the energy stability of all our communities.