Ramras Wants MOU, Clarification on AGIA Treble Damages

(Fairbanks) - House Judiciary Chair Jay Ramras, R-Fairbanks, is pre-filing a resolution requesting the governor and commissioners of the departments of natural resource and revenue, and the Alaska Gasline Inducement Act, or AGIA, licensees to develop an agreement on exactly what triggers the act's treble damages clause and sign a memorandum of understanding to ensure the act doesn't hinder the pursuit of a small-diameter in-state gas pipeline to service southcentral and interior Alaska.

The administration states again and again that the path forward is through the AGIA model, but there are significant unanswered questions and Alaskans deserve concrete answers.
~ Rep. Jay Ramras

"There are three components that we want the MOU to address: one is the discussion on if a state-subsidized or sanctioned small diameter line carrying more than 500,000,000 cubic feet of gas a day would trigger the damages," Ramras said. "Secondly, can we have a discussion on fiscal certainty if all the shippers stay outside of AGIA without incurring the treble damages? And lastly, as per the statutes that Roger Marks asserts in his peer-juried paper concerning the definitions on damages being in conflict; are they based on either the gross or the net - $1.8 billion or $300 million?"

The resolution states that "the public has a right to know, and the administration has a fiduciary duty to report periodically to the public and the legislature on, the risk to the state incurring treble damages if the state provides inducements to a competing intrastate gas pipeline ... and uncertainty regarding the extent of the risk and liability for damages to TransCanada Alaska Company, LLC, and Foothills Pipe Lines Ltd., ... under AS 43.90 (Alaska Gasline Inducement Act), is an impediment to planning and going forward with the development of an intrastate natural gas pipeline to meet the energy needs of the people of the state."

"The administration states again and again that the path forward is through the AGIA model, but there are significant unanswered questions and Alaskans deserve concrete answers," Ramras said. "I believe that we must be diligent when dealing with multi-national corporations when it comes to spending money chasing the elusive large diameter pipeline, and that it is in the state's best interests to keep us in the loop with the facts moving forward. The decision's moving forward could potentially have a billion-dollar impact to the state treasury and our ability to provide natural gas to our own residents."

Passage of the resolution would also trigger a 60-day window for the administration to report to the legislature on progress toward meeting the agreement on the state's liability, after which subsequent reports would be required every 30 days until an MOU is signed by the licensees.