Alaska regulators say gas-line oversight hinges on federal decision

The Regulatory Commission of Alaska has no authority over the proposed North Slope gas pipeline under a 2020 federal decision, but that could change if the Federal Energy Regulatory Commission reevaluates jurisdiction based on the project's two-phase structure, commissioners told the Senate Finance Committee on June 9.

FERC asserted exclusive federal jurisdiction in 2020 because the Alaska LNG Project involves concurrent export and in-state use. The commission could gain a regulatory role if FERC reconsiders that determination because of project phasing or other factors, Chair John Espindola said. The jurisdictional question affects whether Alaska ratepayers have state-level oversight of pipeline costs that flow into utility bills.

The project is structured in two phases. Phase I involves a North Slope natural gas pipeline to Cook Inlet near Nikiski for in-state use, with offtake points including a Fairbanks spur before any liquefied natural gas export. Phase II adds LNG export capacity together with in-state offtakes to meet local demand.

Espindola told the committee the commission understands both phases remain under FERC jurisdiction because no different determination has appeared in the FERC docket. The RCA presentation materials state that under the 2020 FERC decision, the commission had no role in regulating the gas line as the project provided for both export and intrastate use concurrently.

Commissioner Steve DeVries explained FERC exercised its Section 3 jurisdiction over export of gas to foreign markets and included within its scope potential offtakes for in-state use as well. The commission has no jurisdiction over intrastate natural gas pipelines where FERC has established exclusive jurisdiction under AS 42.06.245 and AS 42.08.010(b).

Commissioner Julie Vogler provided an overview of the commission's authority over gas supply contracts during the June 9 presentation. Under AS 42.08, enacted by House Bill 4 in 2013, the RCA has authority over in-state natural gas pipeline contract carriers. The Alaska Supreme Court confirmed the application of AS 42.08 to pipeline projects in the 2025 case Orutsararmiut Native Council v. Boyle.

The commission is granted authority to issue, transfer, modify, and revoke certificates of public convenience and necessity; issue permits for construction, enlargement, extension, connection and interconnection, operation, or abandonment; suspend, approve, deny, and reject initial recourse tariffs; review, approve, and disapprove contracts; establish notice requirements; conduct investigations; classify documents as confidential; review required reporting; extend timelines; and perform general administrative functions including adoption of regulations and administration of a regulatory cost charge.

Contracts are presumed to be just and reasonable if they are negotiated at arm's length, unless there is evidence of fraud, duress, or unlawful market activity. Initial or revised recourse tariffs must be noticed to the commission and the public at least 90 days before they take effect. In-state natural gas pipeline carriers are required to submit reports to the commission every three years after operations begin.