Now that a long-sought natural gas pipeline is on its way into Homer, local residents and city officials are going to have to figure out what’s next. A pair of town meetings this week will focus on the question – how to build and pay for a massive gas distribution network in Homer.
After years of political maneuvering, the State of Alaska finally agreed this year to pay more than 8-million dollars to build a natural gas line into the Homer area. That line will travel into town from Anchor Point, along the Old Sterling Highway. Officials from Enstar Natural Gas Company have said they will begin construction next spring and would like to have the main trunk line into Homer by next fall.
The question for the City of Homer is what happens next.
Homer City Manager Walt Wrede says the final price tag for a gas distribution system within the Homer city limits will likely run about $12 million – or just about one year’s worth of the city’s general fund budget.
Wrede agrees that number is certainly nothing to sneeze at and one option would be for the city to not spend that money and do nothing – leaving residents and businesses to deal with Enstar directly to bring gas into their buildings.
The other option – the one the council seems at this point to be leaning toward – is a USAD, or Utility Special Assessment District.
"The city would be the one to contract with Enstar and then the property owners would pay the city back over ... a ten-year period," said Wrede.
The city and borough do USAD’s all the time, for things like water and sewer lines. But the scale of this proposed USAD is unlike anything the city has ever done before.
How it’s likely to work, says Wrede, is the city would borrow the money – maybe from the borough or through a bond sale – and pay the cost of the distribution network up front. Residents would then repay the city over a period of time. The question for residents, of course, is what is the bottom line going to be?
Wrede says there are too many unknown variables at this point to put a firm number on what the assessment cost may be but the city has come to a figure of $3,200 per lot as a guideline estimate for right now. If the council decides to move forward with the USAD, residents will have a chance to object to it before public hearings begin, likely sometime in January.
One of the major complaints Wrede has heard so far is that Enstar will end up reaping the rewards from the new gas network without having to up-front the costs themselves.
"There's another way to look at it," he said. "I think the city council looks at this as ... a big investment we can make in this community. We can bring down the cost of living and make our businesses more competitive."
Homer residents will have their first chance to gather more information and ask more questions about the gas distribution network at a pair of town meetings scheduled on the subject – Tuesday and Wednesday night, 5 to 7 p.m. in the commons at Homer High School.