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Committee hears bill to repeal LNG import exemption and clarify RCA rate authority
Summary
Senate Bill 180 would repeal a statutory exemption and return explicit authority to the Regulatory Commission of Alaska to review rate and contract issues related to LNG import facilities. Supporters say repeal would remove jurisdictional uncertainty created by prior legislation; RCA officials said repeal would clarify their authority.
The Senate Resources Committee on Monday took up Senate Bill 180, a proposal to repeal subsection (v) of AS 42.05.711 and return to the Regulatory Commission of Alaska (RCA) explicit authority to regulate rate and contract aspects of liquefied natural gas (LNG) import facilities. Committee staff characterized the measure as a repealer that restores the RCA’s role in reviewing gas supply and terminal-use agreements for public utilities using imported LNG.
Sponsor remarks and staff summaries said the provision in question was adopted in a prior legislative session and has caused confusion about the commission’s authority over rate treatment for imported gas. Chair Senator Giesel said recent RCA proceedings, including a recent NSTAR filing, exposed that uncertainty: arguments were made in that proceeding asserting the legislature intended to limit the RCA’s rate-review jurisdiction, while the RCA itself said it retains authority to review gas supply and terminal-use agreements.
RCA Chair John Espindola said the commission “does have jurisdiction over the rates” and that repeal of AS 42.05.711(v) would “eliminate any uncertainty regarding our jurisdiction over the review of gas supply agreements or terminal use agreements for public utilities using the services of a liquefied natural gas import facility.” Espindola also noted the commission’s April 22 order in a recent NSTAR matter is currently within its reconsideration period and he could not elaborate on that specific order.
Committee members asked whether the federal regulator (FERC) already controls LNG terminal siting, construction, operation and expansion. Senator Hughes and others referenced prior House bills (HB 50, HB 394 as discussed in committee testimony) and testimony given in 2024–2025 legislative hearings. Staff and witnesses clarified that FERC’s exclusive authority over siting and construction does not extend to state-level rate review; FERC cannot set the retail rates charged to utility customers once gas is in the distribution system. The repeal seeks to remove statutory language that opponents in prior proceedings cited as creating a bar to RCA rate-review jurisdiction.
Administrative law judge Rich Gazzaway and Chair Espindola warned the committee that leaving the disputed language in statute invites legal argument and that removing it would reduce the likelihood of repeated jurisdictional challenges that could delay or complicate rate proceedings. Senator Hughes said she would like to hear from industry stakeholders such as the Resource Development Council before advancing the measure.
No public testimony was offered in committee on SB 180 during the hearing. The committee took no final vote and set the bill aside for additional consideration.
