House Passes Cook Inlet Recover Act - Hawker's HB 280
Hawker’s HB 280 provides incentives for Cook Inlet gas storage
Wednesday, March 24, 2010, Juneau, Alaska – The Alaska State House today unanimously passed House Bill 280, entitled the Cook Inlet Recovery Act, or CIRA. House Finance Committee Co-Chair Mike Hawker, R-Anchorage and House Speaker Mike Chenault, R-Nikiski, sponsored the bill.
“In a few years, the Cook Inlet gas reserves we depend on today will not be enough to meet the demand of Southcentral homes and businesses,” Hawker said“Acting now, before there is a crisis, is critical to securing a stable and affordable energy source for our community.
“The Cook Inlet Recovery Act will provide incentives to develop and authority to regulate new gas storage facilities, which are essential to the utility provider’s ability to meet peak deliverability on the coldest days,” Hawker said. “CIRA also enhances existing tax credits for exploring for new gas in the Cook Inlet.”
CIRA provides a tax credit, based on storage capacity, and a 10-year exemption from state land lease charges to owners of new gas storage facilities that meet specific deliverability requirements and are established by 2015. The financial incentives are available only to facilities that provide storage to regulated utilities and the benefit of the tax credits are required to be passed on to the consumer. The bill also makes existing Cook Inlet gas exploration tax credits more attractive and easier to use by giving companies full value for the credits during the first year, allowing companies to receive the highest percentage available under current law, and removing barriers to using credits earned in the Cook Inlet against taxes accrued on activities in other areas of the state.
House Speaker Mike Chenault, who is the prime co-sponsor of the bill, says HB 280 will reduce the risk of gas delivery disruptions and “brown outs.”
“The CIRA is a way to ensure that adequate natural gas supplies are available year-round. It will help utilities store gas in the summer months for the big draws during winter,” Chenault said. “Until a gas pipeline from the North Slope to Southcentral Alaska is constructed, we have to adjust our thinking and strategy in the Inlet to assure everyone’s energy needs are met. I applaud Co-Chair Hawker’s work, which to me is a good first step to meeting this challenge.”
HB 280 now heads to the Alaska State Senate for consideration.
Posted: March 25, 2010