Homer makes progress on gasline

By Naomi Klouda
Homer Tribune

HOMER TRIBUNE/Naomi Klouda - City Manager Walt Wrede shows the distribution line for gas.

HOMER TRIBUNE/Naomi Klouda - City Manager Walt Wrede shows the distribution line for gas.

Planning for the Homer area gasline distribution system to be built in the new year has moved through many stages, now toward a decision to be made by the Homer City Council and a Jan. 25 deadline for public comments.
City Manager Walt Wrede and community and economic development Coordinator Katie Koester have kept a busy schedule making presentations to the public. Last week they spoke at the Rotary Club and made a presentation to a real estate association, and recently addressed questions from Homer seniors. The idea is to get the information to the public on how the distribution system is to be phased in and the scope of planning steps ahead.
“We have made quite a few presentations to help people see what is ahead,” Wrede said. If property owners object to being part of the HSAD, as the district composed of 3,850 properties is called, they need to do it before closing hours on Jan. 25 at the clerk’s office.
Another important meeting ahead is ENSTAR’s presentation 5:30-7:30 p.m. Jan. 10 at Homer High School.
So far, fewer than 200 property owners have filed written objections. It would take about 1,950 objections, or 51 percent of all property owners, to kill the HSAD. Those who do object need to place their objections in writing on a form available at the Homer City Clerk’s office.
The trunk line from Anchor Point is to be constructed by next fall in its first phase, leading to Kachemak City. In the mean time, the Homer City Council has some decisions. Should they seek a loan from the Kenai Peninsula Borough to help fund the $12 million distribution system?
Or should residents take on funding themselves?
“If the council does nothing, they could let it take its natural course,” Wrede said to a group at the Homer Senior Center. “People could still get gas but you would use what the regulatory commission already approved.”
In that case, each home owner would be on his or her own and the hook ups would likely be spotty and more expensive. The larger the assessment area, the less it will cost individuals.
“This is a bold plan,” Wrede said. “But it has the potential to be beneficial for many people for many years ahead.”
What is certain is that public or government buildings will be hooked up first. The city produced a map showing the HSAD in two-year construction phases. The core of Homer downtown would be hooked up first, then outlying areas on the bluff and out East End Road would receive the line a year later. Neighborhoods around South Peninsula Hospital and schools will benefit from the first hookups. The City of Homer also will hook in, making the distribution line for nearby property owners immediately accessible. These buildings include city hall, the library, the public works buildings, the animal shelter and the airport. The anticipation is that natural gas will save $1.5-2 million per year in energy costs for all government buildings combined.
“You can imagine a line going quickly down Heath Street,” Wrede said.
Wrede foresees preventing a problem in the way the natural gas is made available to Homer residents after the City of Homer learned a hard lesson in its expensive water-sewer service.
Some in Homer do not have water-sewer services, will never have it and the consequence of that is a higher use fee for all people on the system. More users on a system make it less costly.
“The idea on the table now is that council would agree to obtain financing to fund it all up front. Then everyone gets natural gas and everyone goes in at the same price,” Wrede said.
With the HSAD set up, property owners would pay about $405 or at 4 percent interest per year over 10 years as their share in paying for constructing the distribution line.
So far, the objections from residents came mostly from people who own multiple properties. They would be assessed $400 per property per year.
“The downside is that people will be paying an assessment for each lot. That’s the way it is set up. Everyone pays the same, but each lot pays,” Wrede said.
The city has also heard concerns about low income property owners. As a consequence of this concern, the Homer City Council is considering creating a deferral that would not charge property owners until they sell property or transfer it to heirs. Then the $3,200 would become due.
But the money to fund deferrals would have to be on hand for the city, because the line distribution system will cost the City of Homer $12 million up front. A federal poverty line of $13,970 per year income for a family of one might be one of the ways to measure who would be eligible for a deferral.
The question is what standard would the city use for deferring assessments?
At the next city council meeting Jan. 14, the council will be looking at an ordinance to decide the deferral policy for low income residents. The public testimony period will be both Jan. 14 and Jan. 28 as the council considers this option.
Currently about 300 property owners are eligible for senior tax exempt from paying property taxes, which gives officials an idea of how many might qualify for a gasline assessment deferral. “What we don’t know is how many of those seniors would be eligible. It is probably less, but we don’t know,” Koester said.
Keren Kelley, executive director of the Homer Senior Center, also is looking at finding out more information for Homer’s elderly. The state has offered energy upgrade grants in the past, and programs may be available to help eligible people with the costs of converting from stove oil or electricity to natural gas.
One option for property owners is to have the distribution line available from the road and to delay hook up or phase it in as new appliances or boilers are purchased. The idea is to make natural gas available, but no one is being forced to purchase it, Wrede said.
In the future, the city may offer a workshop making information available on grants or loans available to people for converting their utilities. Kelley said the Homer Senior Center might also be a good resource for scheduling a workshop.

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Posted by on Dec 26th, 2012 and filed under Headline News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

17 Responses for “Homer makes progress on gasline”

  1. Forget it says:

    I do not trust Walt Wrede to handle this gas line. He has been supporting the obviously corrupt Buccaneer and helping spread the lies that we are running out of natural gas, just like Sean Parnell. As soon as the gas line is in, they will continue to lie, drive the prices to double so we are paying the same as Asia but no longer saving any money in our community so we might as well forget the whole thing until they stop lying. Gas was supposed to be cheap because we have it everywhere, but if these Koch clones are going to lie and jack us, seriously, we should forget the whole thing.

  2. Forget it says:

    If they are planning on continuing to lie about natural gas, then forget the whole thing.

    ” gas supplies tight; producers to the rescue?”

    “Buccaneer also has increased the amount of gas being produced from its one well in the Kenai Loop field, and announced recently that it sold a quantity of gas from the well to an unidentified purchaser for $15 per thousand cubic feet, or mcf, which is about twice the prevailing contract prices for gas sales in Cook Inlet region.”

    Who is the unidentified buyer? Who would pay double?

    Asia is buying Alaska’s natural gas (through Parnell’s ConocoPhillips) paying twice the cost, what a coincidence.

    Why wouldn’t Buccaneer want us to know the buyer? Because they, and Sean Parnell, and Walt Wrede have all been lying about us running out of natural gas for their own $$ purposes.

    • No Gas says:

      Buccaneer?? Enstar is the one the city is in bed with on this gas line. Walt Wrede just handed over Enstar $8 mil plus and are going to give them the $12mil.

  3. concerned sourdough says:

    It looks like we will be all hooked into gas lines next year, but so far, no one seems to know where the gas will come from to flow through them. Why is Walt Wrede pushing the gasline distribution so strongly in Homer … surely he doesn’t believe the lies buccaneer has been peddling that they can produce gas somewhere for us? Is he tying all the property owners into a new long-term debt like the water and sewer distribution? What about all the other projects in Homer homeowners are expected to pay for already? Why aren’t we trying to bring the natural gas to Homer from the North Slope … didn’t Palin want to build a pipeline through Canada to sell off all that wasted gas? Why sell it to Asia? WHY NOT KEEP IT IN ALASKA FOR ALASKANS? Alaska would love the job opportunities for Alaskans.

  4. deb says:

    I haet negative people who speak against things with no facts just their assumptions and negative non thruths.

    We need this gas line and it will help our community survive. There is plenty of natural gas here and we should ALL be using it. It is good for th eenvironment and int is GREAT for affordable Clean HEAT for our Homes and businessess.. I wonder if the negative people even live in town and own property? Everyone will be better off once we get affordable heat… the people should be dancing in the street with this good news!

    • concerned sourdough says:

      “Hate” is a very strong negative word Deb. Maybe it’s you who doesn’t understand the facts. We don’t really “need” anything but food and shelter to live. Fracking poisons the water. IF natural gas is running out like THEY say it is, then having a structure of gas lines running under all our houses just doesn’t seem feasible to sustainable living, not to mention the unstable water table after all that digging.

    • Herb says:

      Deb,

      Do you happen to have that extra $15,000-$20,000 to convert to natural gas? Most people do not. At current rates that is about 10-14 years of heating oil for a 500-800 gallon/year user.

      For a fraction of that expense you can install a new 92% efficient oil furnace.

  5. Just Wondering says:

    Wrede wants to make a name for himself…the gas line will do since he couldn’t get the new City Hall. How much is this really going to cost. Enstar says they don’t really know… How much will it really cost individual homes to hook up to the line? Remember, this is the same City Manager that said the City could afford huge loan payments on a new City Hall…and now is asking for the sales tax to be put back on food year round so that the city can afford to have more “fluffy items”.

    The City should follow GASB’s (the government accounting standards board) guidelines in haveing a Finance/Audit Committee consisting of a couple of council members, a city employee and a couple of community members to vet such projects and to keep on eye on what is actually going on with the city finances. However, I’m sure this is the last thing that Walt and Regina (city CFO) would want

  6. Herb says:

    There are a number of items that are being withheld from the public.

    1. In order to connect to Enstar a connect fee of $1,270 (first 100′) and meter fee of $333.00 must be paid in advance of any work beginning. This is by tariff.

    2. A monthly charge of $29.00 plus sales tax, in addition to the city $40.00 assessment will be required, regardless if any gas is used. This is by tariff.

    3. The hospital, schools and library do not have budget money for gas conversion. This will be another tax or assessment.

    4. Enstar has a tariffed surcharge of $1.00 per mch for the Homer area because Ngas is not profitable in the area.

    5. Enstar has forecast a N gas shortage in 2014 and beyond and anticipates Ngas prices rising 20-40%. (Enstar exec on Dan Fagan show )

    6. Ngas shortages will result is usage cutbacks with residential usage being first.

    7. City of Anchorage has locked up most Cook Inlet gas.

    8. If you use approx 500-800 gallons/ year of heating oil or less,you will NEVER break even.

    9. National Average cost to convert to Ngas heat from oil is $9500. As low as $7,500 if you use low efficiency furnace (whats the point). Alaska costs higher. Just where are the residents going to get the conversion money?

    10. Enstar requires your mortgage information before allowing a service connection. (Why?)

    A NO vote is the only logical vote . If you do not vote, the city will vote yes for you.

    • what the says:

      So the state of Alaska pays for infrastructure, Homer citizens pay for infrastructure and Enstar still adds a $1 tarriff to Homer because it is not profitable?

      How much is enough? It’s never enough for these corporations.

  7. Herb says:

    QUESTION:

    Does the City of Homer have the legal right to cast a vote on your behalf without your express written consent?

  8. Starting to not enjoy Homer says:

    Wow! I am speechless. How do you know all this stuff about Walt Wrede? Get a job and accept that Homer needs to have economic development. It cannot survive on hippies and retirees.

    • Get Real says:

      Hey, look here, I’ve lived here in Homer for a long time and yes I have a job here also. We don’t have high energy bills but we use our energy wisely and watch what we spend our money on. If the gas company Enstar thought it would be profitable to bring natural gas to Homer then they would have done so long before now and they would have paid for it themselves. I don’t think that it’s fair for the City to make us pay for something that we will not have or use.

    • concerned sourdough says:

      To: Starting to not enjoy Homer

      Maybe Homer is just not the place for you. Many come here thinking they will change the energy patterns of the Kachemak, but alas, they also leave.

      I hope you’ll understand the “need for human survival” over the love of corporate money, BUT, here’s a great solution for keeping the wheels turning.

      Someone has (again) found a solution.

      *******
      Global oil production is declining at 8-10% per year. And what does this mean? Higher prices. For EVERYTHING.

      Now, this is not the end of the world as we know it. There IS a solution, and that solution is HEMP.

      Hemp does everything that petroleum does, AND BETTER!

      Extracting fossil fuels are harmful to the environment and to human health. Petroleum extracting and processing is a chemical-intensive, expensive process. Hemp oil for fuel is simply a matter of growing, harvesting, and processing.

      Petroleum-based plastics are not biodegradable. Hemp-based plastics are recyclable and biodegradable.

      Fuel for transportation can be replaced with hemp-based biofuels. Hemp fuel is clean, efficient, and…if it spills it does not harm the environment, it is more like a fertilizer.

      Everything, EVERYTHING, that petroleum does, hemp does. So, why are we feeling this pain from fossil fuels?

      Why are we not allowing our farmers to grow hemp? Well, we know the reasons – big oil, pharma, timber, and chemical companies do not want to lose their investment dollars; the military – using OUR dollars to fund wars, some of which have to do with…yes, you guessed it…OIL.

      What would happen if in the next few years we, in the U.S., farmed hemp on a large scale? We would have no more dependence on foreign oil, we certainly wouldn’t need so much money spent on the military, we would have a clean, safe alternative, and every single factor in our lives when it comes to food, clothing, health, transportation, housing, etc. – it would all be thanks to HEMP. Our economy would start to heal. The government wouldn’t need to print new money, causing more debt (which, by the way, is NOT the answer to reviving a sucky economy).

      So, what do we do now? We keep speaking, we keep educating, we work toward legalizing industrial hemp farming in the U.S. We put our energy into doing everything we can to rid ourselves of dependence on foreign and domestic fossil fuels. Will this happen overnight? No. Of course not. But we can begin taking steps NOW to take us in that direction.

      Author

      Becca Wolford

  9. natural gas low? says:

    we need to get to the truth on what is happening with natural gas. Why is the state of Alaska charging so much when we have so many resources, meanwhile pretending we are running out?

    “profits are far higher in Asia than in Europe and the United
    States. Asian LNG prices hover around $14 to $16 per million British
    thermal units, while the U.S. surplus has brought domestic prices down
    to $2 to $3 per MBtu. This stark disparity means that no viable market
    for Alaska’s gas exists in the rest of the U.S., but the Japanese
    government is the perfect customer, because it badly needs the fuel and
    is willing to pay above the market price.”

    “Now we see that the world is awash in natural gas liquids,” he said in a presentation to a legislative committee Dec. 20.

    More shale gas has meant a glut of NGLs in the U.S. market, with prices falling by 60 percent”.

    Now they are planning on changing the in-state gas line to ship less gas because it is just too cheap now. The pipes and fitting will be much cheaper now, but they are still planning to spend the same amount on it….7.7 Billion

    This is up from previous figures “Gov. Sean Parnell has proposed a fraction of that — $25 million for an in-state pipeline and $25 million for a large-diameter line envisioned by his predecessor, Gov. Sarah Palin, under the Alaska Gas Inducement Act.”

    From 50 million to almost 8 Billion!!

    Now they are doing less work, less expense for the same absurd amount 8 Billion, and it will not benefit Alaskans because their goal is to keep prices high, eventually getting our prices in line with what Asia is currently paying. And they are using our state money like some gravy train for corporations, setting them up to take more of our resources for a pittance.

  10. Just Wondering says:

    My understanding is that if one does not send in a vote either for or against the gas line then the City of Homer can turn your non-existing vote into a yes vote for the NGas. Remember to vote. I’m not against getting NGas…i would love to be on NGas. i just don’t trust the City to reveal all of the facts ie costs of bringing NGas into town…

  11. Dare to ask says:

    A couple of things to consider: Enstar has committed to build the gas trunk line whether or not the SAD is approved. The distribution lines are what the SAD is paying for. If you take the time to read the “Notice of Right to Object,” in paragraph 5 it says that if the SAD is voted down, the Council can’t proceed unless it “revises the plan to reduce the assessed cost.” And although a contract will be written to hold Enstar to a fixed price for construction of the gas distribution lines, Homerites should also demand a fixed price to connect to the line and not let Enstar raise it’s rate from year to year. That is one way for them to recoup their expenses if there are construction overruns.

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