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HB 142: "An Act relating to the creation of a rebuttable presumption that the project licensed under the Alaska Gasline Inducement Act is uneconomic because of insufficient firm transportation commitments during the first open season."

00                             HOUSE BILL NO. 142                                                                          
01 "An Act relating to the creation of a rebuttable presumption that the project licensed                                  
02 under the Alaska Gasline Inducement Act is uneconomic because of insufficient firm                                      
03 transportation commitments during the first open season."                                                               
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1. The uncodified law of the State of Alaska is amended by adding a new section                          
06 to read:                                                                                                                
07       PRESUMPTION THAT PROJECT IS UNECONOMIC. (a) If TransCanada Alaska                                                 
08 Company, LLC, and Foothills Pipe Lines Ltd., jointly as licensee, fail to disclose, before                              
09 July 15, 2011, that the project licensed under AS 43.90 (Alaska Gasline Inducement Act)                                 
10 received firm transportation commitments during the open season sufficient to support the                               
11 construction of the project, it is rebuttably presumed that the project is uneconomic for the                           
12 purposes of AS 43.90.240. The commissioners shall notify the legislature before August 1,                               
13 2011, whether firm transportation commitments are disclosed to the commissioners before                                 
14 July 15, 2011, and report whether the firm commitments that are disclosed are sufficient to                             
01 support development of the project.                                                                                     
02       (b)  If the presumption is raised under (a) of this section, the commissioners shall,                             
03            (1)  before August 15, 2011, submit a report to the legislature that rebuts the                              
04 presumption in (a) of this section by a preponderance of evidence or state that there is                                
05 insufficient evidence to rebut the presumption; and                                                                     
06            (2)  in conjunction with the request for an appropriation for the reimbursement                              
07 of qualified expenditures authorized by AS 43.90.110(a)(1) for fiscal year 2013, provide                                
08 testimony and evidence that the                                                                                         
09                 (A)  project has credit support sufficient to finance construction of the                               
10       project through firm transportation commitments, government assistance, or other                                  
11       external sources of financing; and                                                                                
12                 (B)  predicted costs of transportation at a 100 percent load factor, when                               
13       deducted from predicted gas sales revenue using publicly available predictions of                                 
14       future gas prices, would result in a producer rate of return that is not below the rate                           
15       typically accepted by a prudent oil and gas exploration and production company for                                
16       incremental upstream investment that is required to produce and deliver gas to the                                
17       project.                                                                                                          
18       (c)  Nothing in this section precludes an agreement between the commissioners and                                 
19 the licensee that the project is uneconomic or a determination by the commissioners or the                              
20 licensee that the project is uneconomic for the purposes of AS 43.90.240.                                               
21       (d)  In this section, "commissioners," "licensee," "open season," and "project" have the                          
22 meanings given in AS 43.90.900.