Interior Alaska Energy: AIDEA banks on 'bridge' project.

• Author: Stricker, Julie
• Position: ENERGY

The year was 1976. The United States celebrated its Bicentennial. The two-dollar bill was introduced. Jimmy Carter was elected president. Gasoline cost fifty-nine cents per gallon and Congress passed the Alaska Natural Gas Transportation Act, an effort to build a natural gas pipeline from the Prudhoe Bay to the Lower 48.

Over the next four decades, various efforts would be made to build the pipeline, closely watched by the residents of Alaska's second-largest city.

Fairbanks sits at the center of a perfect storm for high energy prices: the community of thirty thousand endures long, dark, brutally cold winters; residents rely on high-priced fuel oil; it is hundreds of miles from oil and natural gas deposits and has limited transportation options; and its location in a closed valley helps pool pollution, leading to some of the worst air quality in the nation. The pollution is exacerbated as many residents turn to wood in an effort to lower their heating costs. Burning wood results in PM2.5 particulate pollution, which leaves a smoky haze over many neighborhoods and puts air quality well below EPA standards.

For decades, state and local leaders have touted a gas pipeline through or near Fairbanks as a solution to the community's high costs and air quality problems. But with the construction of a pipeline now estimated to cost $50 billion and still no plan or timeframe in sight, leaders are looking to smaller-scale "bridge" projects to bring energy relief.

Project Creation

In 2013, the Alaska Legislature created the Interior Energy Project. It is an Alaska Industrial Development and Export Authority (AIDEA) vehicle to bring affordable, clean energy to as many Fairbanks-area residents as soon as is feasible. The project is a joint project between AIDEA; the Alaska Energy Authority; the Alaska Department of Commerce, Community, and Economic Development; the Alaska Department of Revenue; and the Alaska Department of Natural Resources.

"AIDEA is really kind of like our banker," says Mindy O'Neall, communications manager for the Interior Gas Utility (IGU), a natural gas distributor in Fairbanks and North Pole and a wholly-owned subsidiary of the Fairbanks North Star Borough. "In some ways, we re a partner with them in that they allocate the dollars that we have to use for the project. They say yeah or nay to the expenses that we have. They set the rules and authorize us moving forward with the next phases of the project," O'Neall says.

Through the...