Morning Headlamp – A big win from Trump for Alaska

A dream come true.  President Donald Trump is preparing an executive order to reverse President Obama’s actions to withdraw U.S. Arctic and Atlantic Ocean waters from lease sales for the purpose of oil and gas development. While the reversal of the anti-development policy could take years, Headlamp is encouraged to see President Trump take aggressive action in helping to develop Alaska’s vast resources. The U.S. Arctic is estimated to hold 27 billion barrels of oil and 132 trillion cubic feet of natural gas.

A failure to communicate. One of two key state financial reports, the spring revenue forecast, is behind schedule this year. The state released an early version of the spring revenue forecast last year on March 21, saying that its content — growth of the Alaska deficit by $300 million — would help guide legislative debate as Gov. Walker pressed the Legislature for budget reforms. The forecasts are typically released in the first week of April. But this year’s document isn’t expected until April 14, according to Ken Alper, the state tax director. House Republican, Anchorage Rep. Lance Pruitt, accused Walker’s administration of hiding information about higher oil revenues that could undermine its push for new state revenue through taxes. “Something tells me that the revenue outlook is not as dire-painted as it was last year,” said Pruitt, a member of the GOP minority. “Meaning some of the things that they’re pushing — the scare tactics that are being used to try to force Alaskans into bad policy, whether it’s on oil taxes or on an income tax — are not maybe as necessary as they need to be.”

Two become one. Consolidation is the next natural step for Anchorage’s electric utilities to take in their ongoing efforts to reduce costs, according to NERA Economic Consulting Director Kurt Strunk. City-owned Municipal Light and Power services Downtown and Midtown Anchorage, as well as Joint-Base Elmendorf Richardson. Chugach Electric Association, a cooperative utility, covers the remaining majority of the city and small portions of the northern Kenai Peninsula Borough. Strunk, who has testified before the Regulatory Commission of Alaska on utility matters in the past, said full consolidation of Chugach and ML&P is the single biggest thing the utilities could do to capture operational savings. Similar utility consolidation has already occurred across the Lower 48, he said; it’s common as markets mature. “If the two Anchorage utilities combine they would be the size of a very small utility in the Lower 48,” Strunk described. “The scale of diseconomies when you’re operating very small utilities is huge.” Current Anchorage electric rates are on par with Lower 48 averages, but a request to the RCA by ML&P to increase its rates to offset the cost of its new $300 million East Anchorage 2A power plant would push rates above national averages.

 

First Reads

Trump Preparing Order to Expand Offshore Oil Drilling
Bloomberg.com, Jennifer Dlouhy, April 6, 2017

Tax rules, not politics, delay state revenue forecast, Alaska official says

Alaska Dispatch News, Nathaniel Herz, April 7, 2017

Wasilla state Sen. Dunleavy risks exile from caucus as Alaska Senate approves budget

Alaska Dispatch News, Nathaniel Herz, April 7, 2017

Anchorage utility consolidation pondered

Alaska Journal of Commerce, Elwood Brehmer, April 6, 2017

Congressional Democrats remount effort to block drilling in ANWR
Alaska Dispatch News, Erica Martinson, April 6, 2017