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Senators flag conflicting LNG pipeline revenue math and potential rate impacts as bill moves forward
Summary
Senators said they are re‑checking large, differing pipeline revenue and profit estimates after consultants presented corporate income tax and profit projections; lawmakers warned of potential ratepayer impacts and cited an expert who called federal takeover via the Defense Production Act unlikely.
Reporters pressed senators about the status of an LNG pipeline bill and the economic assumptions behind it after committee briefings.
Senator Giesel said stakeholders have testified and consultants from Gaffney Klein presented modeling that included corporate income tax projections. "One of the slides ... had to do with the corporate income tax ... he opined that that corporate income tax by year 50 would be bringing in $80,000,000," Giesel said, and she added that committee staff are checking those figures.
Senator Volokowski said his own extrapolation produced a much larger figure for developer profit in one scenario and warned of a very high rate of return on equity, saying the committee must "get this right" to protect ratepayers and property taxpayers. "When you extrapolate that, it came out to, an $8,000,000,000 profit per year ... that equates to a rate of return on equity of, of over 50%." He also raised a potential consumer impact: "rate payers in South Central could potentially be paying $30 in MCF depending on the scenario. Right now, they're paying about 10. So we gotta get this right, protect Alaska rate payers."
Giesel noted that some models used an assumption of $1 per MCF while the North Slope prevailing sale value for gas "is about $2.99 or $3" per MCF before pipeline transport, creating material differences in revenue estimates.
On federal intervention, Giesel said the committee consulted Phil Rossetti (R Street Institute) about the Defense Production Act; Rossetti characterized the law as "pretty ill defined" and said it has not been tested in court. Rossetti told the committee it is unlikely the federal government would nationalize the pipeline under current circumstances because the relevant fund size does not suggest such an outcome.
Senators said they are meeting daily, expect to continue stakeholder talks and modeling revisions, and have not set a firm date to advance the bill to Senate Finance.
