ANCHORAGE (KTUU) - The Port Commission voted on a plan to finance a project that would bring part of the Port of Alaska - which handles about half of all Alaska inbound marine cargo - to fully operational status. The $81 million project would be partially funded by a raise in tariffs.
The current tariff at the port will be expiring at the end of the year, so Wednesday the commission met to discuss those changes, as well as how to move forward with funding the remainder of the Petroleum Cement Terminal.
The Petroleum Cement Terminal has been in a state of disrepair since before the Nov. 30 earthquake, and on Wednesday the Port Commission looked at options anywhere from basically 'keeping the lights on,' all the way to funding a fully operational facility.
"For the petroleum side, that's the oldest part of the facility, and something has to be done sooner rather than later before we have a catastrophic failure and our judgment gets questioned as to why we let that happen," said Port Director, Steve Ribuffo.
The commission was presented with three options with various degrees of construction - and cost:
A $41 million option would finish all the permitted work for in-water construction.
A $60.5 million option would give the port a functional lay dock, but does not include infrastructure to offload fuel or cement.
The $81 million option, which the commission ultimately passed, would fund a fully functioning dock with capabilities to offload cement and fuel in normal operations. Now the commission will ask the Anchorage Assembly to adopt a tariff increase to support this project.
"The current tariff rate for petroleum is based on a cost per barrel and it's a little over 16 cents per barrel," said Ribuffo. "This tariff is a ten year tariff, and the model that the Port Commission selected allows us to smooth the increases over that ten years so that it is not a big large onerous increase just at one time. It will gradually get to where it needs to be, and then once it hits that point, it stays there in perpetuity. So we're going from about 16 and a half cents a barrel to a little over 57 cents a barrel over that 10 years."
A representative for the Port of Alaska User Group read a statement urging the Port Commission and the Anchorage Assembly to adopt modest, baseline increases. But ultimately, the commission voted five to four to adopt the $81 million scenario. The four no votes were hoping to have a little more information and time to mull it over.
"There's a lot of moving parts and a lot of variables that you're not going to make everybody happy, and you're not going to satisfy every single one, but not making a decision at this stage of the game is not a wise place to be," said Ribuffo.
If the Anchorage Assembly adopts the proposal, construction could be completed by 2021.
"I think we will be able to execute this. If the assembly approves and allows us to put this new tariff structure in place, that we will execute it and stay flexible for those opportunities where if money does come from the state, and money does come from all the grants that we've applied for, that we can go back and re-look at exactly what it is we're financing and reduce these forecast rate increases as we go along," said Ribuffo.
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