Thoughts on the “TransCanada Buyout”
Over the last week, the Legislature has heard from numerous experts and state officials about what’s informally being called the “TransCanada Buyout.”
The purpose of this special session has been to hear Senate Bill 3001, the Governor’s bill requesting the Legislature for funds to continue the AK LNG project. As part of the bill, the Legislature is being asked to approve roughly $68 million to reimburse one of our AK LNG partners, TransCanada, for their expenses up to this point. In taking this action, the Legislature would be supporting the Administration’s plan to terminate TransCanada’s participation in the AK LNG project.
The State’s current partnership with TransCanada is defined by a Precedent Agreement (PA), signed by the past Administration in June of 2014, without Legislative review. Ultimately, it was a bad deal.
While we can’t change the past, I believe it’s critical to get out of this deal now. Here are a the main reasons why I think the TransCanada “buyout” is a smart economic move for the State:
1) TransCanada is charging the State of Alaska an interest rate of 7.1% on all project costs paid on our behalf. The State of Alaska is confident we can find much cheaper financing.
2) If we don’t terminate the PA by Dec. 31, 2015, we won’t have another opportunity until 2018. In the meantime, the State will continue to pay a high interest rate of 7.1% on an additional $441 million dollars expected to be financed by TransCanada during the next project phase.
3) By terminating the PA with TransCanada now, it is estimated we could save up to $400 million more each year once the project is up and running (a total savings of $12 billion over 30 years).
4) Right now, the State is obligated to reimburse TransCanada’s costs (plus interest) even if the AK LNG project fails, TransCanada exits or the State chooses to stop the project.
5) Buying out TransCanada will increase the State’s voting rights to 25%, giving us more direct influence and allowing the State to ensure key technical decisions are being made in Alaska’s best interest.
6) The TransCanada buyout “will have no incremental impact on the State’s long-term credit rating” (DOR)
Last year, I voted against the current gas line process (Senate Bill 138) because this deal with TransCanada was one of many problems that we foresaw. I’m glad to see we have an opportunity to correct this now.
Speaking on the Senate Floor, questioning the constitutionality of a resolution introduced on a topic not included in the Governor’s call for the third special session. Listen HERE.
Muldoon Town Square Park –
Survey & Open House #2
Planning for the Muldoon Town Square Park continues! Over the years, the Legislature has appropriated $1.5 million to develop a park in Muldoon. Join friends and neighbors for the second public meeting on the master plan and help shape the future of the park.
Please also take this short SURVEY to let Anchorage Parks & Recreation know what you think is important for the park.
What: Muldoon Town Square Park Public Planning Workshop
When: Monday, November 4th, 5:30-7:30pm
Where: Begich Middle School (7440 Creekside Center Drive)
For more information on the Muldoon Town Square Park Master Plan, click HERE.
Coffee Time This Wednesday
Although I will still be in Juneau for the special session, my staff will be at this month’s coffee to meet with you on my behalf.
I’d like to hear your thoughts on the issues, what’s important to you and any ideas you might have to share, and I trust my staff to pass along what you have to say while I’m in Juneau. And of course, as always, the coffee’s on me!
• WHEN: This Wednesday, Nov. 4th at 7:00am – 8:00am
• WHERE: Denny’s, 3850 Debarr Road
Anchorage Health Fair
Health Fair season is coming to a close, but Anchorage residents have one more opportunity to attend a Health Fair in 2015. Mark your calendars!
What: Health Fair
When: Saturday, November 21st, 9:00am – 1:00pm
Where: University Center (3901 Old Seward Highway)
Health fairs are open to the public, offering free health education and affordable screening and tests. Learn more HERE.
When not in committee or on the Senate Floor, I’ve spent my time in Juneau calling constituents. If you haven’t heard from me yet, feel free to call and share your thoughts on the gas line, budget issues and more.
You are always welcome to contact me directly with thoughts, ideas and concerns. I am here to represent you!
Alaska State Senator
District H - Anchorage