Senate Bill 25 creates the Alaska Sustainable Strategy for Energy Transmission and Supply

JUNEAU-The Alaska State Legislature has passed Senate Bill 25, theAlaska Sustainable Strategy for Energy Transmission and Supply(ASSETS). Senate Bill 25, sponsored by Senator Lesil McGuire (Anchorage) and Representative Lance Pruitt (Anchorage), establishes a new fund within the Alaska Industrial Development and Export Authority (AIDEA) for the purpose of financing or facilitating the financing of energy projects in Alaska.

“At the Arctic Imperative Conference in Girdwood last year I presented alongside individuals who represented large, multi-national investors like Guggenheim and Citigroup,” said Senator McGuire. “I was inspired by the discussion of how private sector investment can be attracted through co-investment by the State and other financing mechanisms.” Senate Bill 25 empowers AIDEA to work with the private sector to finance, or facilitate the financing of energy projects in Alaska. The bill creates a new fund within AIDEA, the Sustainable Energy Transmission Supply Development fund (SETS), which was capitalized with $125,000,000 in the fiscal year 2013 operating budget passed by the Legislature.

Unlike other revolving loan funds, AIDEA pays a dividend from its earnings to the State. “With billions in savings invested in the capital markets, Alaska is promoting economic activity outside while our companies, electric cooperatives and communities look elsewhere for financing,” said Senator McGuire. “Our goal in sponsoring Senate Bill 25 was to put a small portion of those savings to work in Alaska to create jobs, industry and new revenues for the state.”

The House version of Senate Bill 25 (HB 357) was sponsored by Representative Lance Pruitt (R-Anchorage) who chairs the House Energy Committee. “Energy is the foundation of our state and access to affordable, reliable energy is the key to unlocking our resources and diversifying our economy,” said Representative Pruitt. “In the House Energy Committee, we have worked with communities, businesses and Alaskans and I have heard again and again that access to capital is a serious obstacle to developing new energy projects in Alaska.”

Senate Bill 25 provides access to capital by allowing AIDEA to enter into public-private partnerships, guarantee loans and bonds and defer principal payments. The bill also allows AIDEA to offer long-term financing of up to 50 years for hydroelectric and transmission projects. “With declining throughput in the Trans-Alaska Pipeline,” said Senator McGuire, “Now is the time to responsibly diversify our economy by providing access to capital instead of simply grants so that the next generation has the resources to build on the foundation we build today.”

Senate Bill 25 now heads to Governor Parnell for his signature.

For more information, please contact Michael Pawlowski in Senator McGuire’s office at 907-465-2995.