[{"_1":2,"_88":-5,"_89":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6327027,"mediaKeyId","2323433-2290607d221a125b4719793432f17c20","parentId",2323433,"title","Senators press ADA over plan to backstop up to $50 million in FEED work for proposed gas pipeline","audioSeconds",3396,"startMs",893000,"endMs",4289000,"viewUrl","/Search/View?dp=1&key=2323433-2290607d221a125b4719793432f17c20&start=893&end=4289","thumbnailUrl","https://assets.pipeline.soar.com/2323433-2290607d221a125b4719793432f17c20/thumbnail_893000.jpg","articleUrl","/articles/6327027/Alaska/Senators-press-ADA-over-plan-to-backstop-up-to-50-million-in-FEED-work-for-proposed-gas-pipeline","mediaUrl","https://secure.pipeline.soar.com/6327027-d070de94c86a9740e02bd2315cee97c0/orig.mp4?Expires=1771117491&Signature=mzNaPQAl2jVtIQ3uqWu8-Lis4fTdsAhsmEyq9fTHIenAP0S8MXFR-rySOwFoz8qTe6LP0AaMuS9hjvL0JW5YBcuLLqALlla1k084-VuaUmGjHQLy4edUaIlmLlLLyU00FnTAStg-uRipgjc297jUAZySxQweS980OuWMGGAGxoXLudVlcgu3tOv3PT1MfQL7Ur0A376O6UFrUyhJyEPRGtRQKesgEnGuQ~BdksmwEqsuFoJI8kJEFR~1RUsZ1GRVvA88WDu90dsYk~UJRFDriPdVF7-35nAvdBUo3k5-v30Fv9EPc1WM~CR4l-oBX~e~2LVQEDqlnKnh5ca8iViCZA__&Key-Pair-Id=KUT5TJCACFTXG","author","Alaska Legislature","date","2025-02-17T00:00:00Z","article","Juneau — Members of the Alaska Senate Finance Committee probed the Alaska Industrial Development and Export Authority’s plan to provide a corporate guarantee that could expose ADA to as much as $50 million to backstop front-end engineering and design (FEED) work for a proposed in‑state gas pipeline during a Feb. 17 committee hearing.

The committee’s most pointed questions centered on two issues: whether ADA has the statutory authority to commit funds or guarantees without a legislative appropriation and how the agency will limit and recover its financial risk if the project does not reach a final investment decision (FID). “I do feel we have the legislative authority to expend those funds given our statutes,” ADA Executive Director Randy Veraro told the committee, adding that ADA distinguishes its earnings and statutory funds from State general funds.

Why it matters: the proposal would make ADA a financial backstop for FEED work on the pipeline’s first phase (the proposed in‑state transmission line) — a phase several senators described as the riskiest element of the overall project. Committee members said $50 million is a substantial exposure for ADA and urged clearer public disclosure of contractual terms and any recovery mechanisms.

What ADA told the committee

- Structure and limits: Veraro described the proposed commitment as a corporate guarantee limited to actual FEED costs incurred. Under ADA’s description, funds would remain in ADA’s accounts and ADA would only be obligated to pay amounts tied to completed work if the project does not proceed to FID. “We’re tied to paying for only the work that was done and completed,” Veraro said.

- Conditional obligation: ADA officials told senators the guarantee would be conditional — ADA would not make any payment unless a developer decided not to take final investment decision. Veraro said the engineering firm and developer would pay work costs as the FEED is performed and that ADA’s exposure would be limited to the sum of completed FEED work that was not reimbursed by the developer.

- Compensation and recovery: ADA said it is negotiating compensation tied to pipeline volumes if the project advances and is also seeking collateral arrangements that would allow ADA to recover costs if the FEED work is paid for but the project does not proceed.

Senators’ concerns and requests

- Appropriations authority: Several senators — including Chairman Stedman and others on the panel — emphasized the Legislature’s constitutional role as appropriator and asked for legal clarity about ADA’s authority to commit ADA‑managed funds or earnings without a statutory appropriation. Senator Stedman said the committee needs to “dig into this further because we are the appropriating authority.”

- Transparency under NDA: Veraro said some negotiation details remain under non‑disclosure agreements and he must consult counsel about what can be shared with the Legislature before the agreement is finished. Senators pressed for enough disclosure to evaluate the risk to Alaskans.

- Matching funds and “skin in the game”: Multiple senators urged that the developer carry meaningful matching exposure. “If we go down this road, we just look at that as a sunk cost,” Senator Stedman said, arguing the state should require shared risk rather than bearing the entire loss if phase 1 fails.

- Risk concentration in phase 1: Senators repeatedly flagged phase 1 (the pipeline) as carrying the most construction and escalation risk, while acknowledging other project components (liquefaction, conditioning) may be modularized and built elsewhere.

Developer, supply and federal context (as described to the committee)

ADA and committee discussion referenced a number of external factors said to affect project risk and financing: public reporting by project proponents, the role of the federal government in providing loan guarantees, and reported interest from foreign investors. Veraro told the committee he believes the current federal administration’s trade and investment posture makes this moment different from past pipeline efforts.

On supply, ADA noted public filings described a producer (identified in testimony as “Great Bear”) that has filed for gas sales to AGDC of up to 500,000,000 cubic feet per day at a maximum price of $1 per unit (as stated in the presentation). Those claims were presented to the committee as material to project economics but not independently verified in the hearing.

What the committee asked for next

Senators asked ADA to provide follow‑up information in writing, including legal analysis about appropriation authority, further detail on the guarantee terms and collateral or recovery mechanisms, and the timeline for when the Legislature might see contract language suitable for review. ADA said it will consult counsel on what can be shared where NDA provisions exist.

Distinguishing discussion from decision

The hearing produced questions and direction to staff to return with more information. The committee did not take any formal vote or adopt a legislative action during the session; senators requested additional documentation and legal analysis before considering any appropriation or other action.

What remains unresolved

Key elements remain under negotiation or in NDA review, including the detailed tolling/compensation structure ADA would use to recover its outlays if the project advances, and specific collateral arrangements ADA said it is pursuing. Senators asked that ADA seek terms that reduce the chance the developer can spend extensively on FEED before the developer bears meaningful exposure.

Committee context and next steps

Multiple senators said they support the overall objective of bringing new jobs and gas supply to parts of Alaska but want stronger public safeguards and clearer documentation before ADA assumes potential losses. The committee will expect written follow‑up from ADA and counsel on authority and terms before pursuing any legislative appropriation or further action related to the proposed ADA guarantee.","mediaType","Video","parentTitle","SENATE FINANCE\t02/17/2025","oneSentenceSummary","At a Feb. 17 hearing in Juneau, the Alaska Senate Finance Committee pressed the Alaska Industrial Development and Export Authority about a proposal that could expose ADA to up to $50 million to backstop FEED work for a proposed in‑state gas pipeline.","taxTitle","2025 Legislature Alaska, Alaska","taxId",78559,"location","Alaska","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6327022,"ADA reports FY24 gains, details projects and loan portfolio as senators press for write‑offs and local‑hire plans",5269,685000,5954000,"/Search/View?dp=1&key=2323433-2290607d221a125b4719793432f17c20&start=685&end=5954","https://assets.pipeline.soar.com/2323433-2290607d221a125b4719793432f17c20/thumbnail_685000.jpg","/articles/6327022/Alaska/ADA-reports-FY24-gains-details-projects-and-loan-portfolio-as-senators-press-for-writeoffs-and-localhire-plans","https://secure.pipeline.soar.com/6327022-33caa31a7f43146387c8011e615986ae/orig.mp4?Expires=1771117491&Signature=TIRV83lmTvjmX~Hr2jkQWPOphK01uekpDbHpPWsXegDPdwzIyJxNy9heTdF9EM2RxgL-LXAQapph-DT6JNGFdkzt0IrPSiKe4wFwbZHs-pyqWyqkQ36uGMB7tTxrYh3YZ6UUC3EcA6RP8MMUP0gfcEyjCo1276tHBVvtwLIefm4ddnRXZXfVFDeBMs3XXzNaATqEdQ75UcBMMpgAvA3yYztuv-2mqk41G1n6ZbQjNP0fJLCtuFQqPm~buQy6bIizfmmDdHaSbBO5j3InuaWQNI7gPJ7REZ2kyY2aik8XIUfsjKdYBAi~AZi2-x87sf3Yq-HvRDLS0x4mj7CoK2qnew__&Key-Pair-Id=KUT5TJCACFTXG","Juneau — At a Feb. 17 Senate Finance Committee hearing, the Alaska Industrial Development and Export Authority reported a strong FY 2024 performance and walked senators through its portfolio and active projects while answering detailed questions about loan performance, write‑downs and local benefits from infrastructure projects.

Key financials and portfolio overview

ADA told senators it produced its highest recent statutory net income in FY 2024 at $65,000,000 and that its net position increased by approximately $53,000,000. ADA said it has declared roughly $500,000,000 in dividends back to the State Treasury since 1997 and that this year’s dividend was about $20,000,000 — the largest in roughly a decade. Executive Director Randy Veraro said ADA currently employs 43 staff.

Portfolio composition and liquidity

ADA presented a breakdown of assets during the hearing and said its loan participation program is the largest slice of its balance sheet — ADA reported roughly $532,000,000 in loan participations. A separate pool of investment funds, presented as a multi‑year (roughly six‑year) cycle, matures periodically; ADA staff said they expect to move maturing investments into cash on hand to support new project financings. Senators asked whether ADA’s investment funds are invested only in Alaska — ADA said the investments include domestic and international holdings and that maturities are uneven from year to year.

Underwriting and loan performance

ADA described its loan participation process as a two‑round review: local Alaska banks underwrite an application and then ADA performs its own underwriting and board review before making a commitment. ADA reported a very low default rate in its loan participation portfolio, with fewer than 10 loans restructured in recent periods and no active defaults in that program.

Senators pressed ADA for written follow‑up on delinquency metrics. Chairman Stedman asked ADA to provide a simple accounting of loans past 30 days, restructured loans and other arrears; ADA said staff would provide those statistics in writing and that loan officer Tiffany Jansen could assist.

Troubled projects and write‑downs

Committee members raised past troubled projects. ADA described a recent settlement on a Bluecrest loan: Bluecrest had a balance roughly $14,000,000 that was resolved with a lump‑sum payment of about $6,870,000 and ADA retained an interest in an on‑site man camp; the remaining balance was written off. ADA also described a larger Mustang project write‑down; ADA said it recovered roughly $17,000,000 in tax credits related to Mustang but wrote off a significant portion of the project (ADA told the committee the write‑down was on the order of tens of millions; senators referenced a $70,000,000 figure in the hearing and asked for written confirmation).

ADA said underwriting changes have been made after Mustang, including greater scrutiny of LLC structures, independent collateral valuations and an improved review process.

Active projects highlighted to the committee

- Ali S. Chem (methanol plant, North Slope): ADA said it is supporting a methanol plant project that would use North Slope gas to produce methanol and ultra‑low sulfur diesel; ADA said the project should create construction jobs and some permanent positions. ADA listed a financing figure in the presentation (about $70,000,000) for the project.

- HECS/Cook Inlet: ADA said it has established a revolving line of credit for HECS to support drilling in Cook Inlet and noted that production volumes and timing are part of how small producers and larger projects will coexist in the market.

- Ambler Access road: ADA identified an FY26 capital request of roughly $2.5 million to advance permitting for the West Susitna/Ambler access road and estimated the full construction cost for the Ambler road at between $500,000,000 and $1,000,000,000 in committee discussion. ADA said the federal right‑of‑way process is moving and that ownership of road segments might include ADA, ANCSA regional corporations, tribes and syndicates; public access would be limited and the road is planned as an industrial access route with some community access provisions for fuel, medevac and supplies.

- ANWR (referred to in testimony as “Anwar”): ADA said it holds leases and is updating geological work and seismic data on ANWR leases and that preliminary indications point to significant hydrocarbon resources; ADA said it is working on an assessment and expects to report back to the committee when complete.

Underwriting collateral and lessons learned

ADA acknowledged that in Mustang the agency accepted leases as collateral that later proved insufficient to cover the investment and that holding those assets imposed carrying costs (taxes, maintenance). Veraro said ADA has tightened underwriting standards and will require independent assessments of lease and asset value before accepting such collateral in the future.

Local hire, tribal participation and community benefits

Senators repeatedly asked about local hire and community benefit provisions on large projects. ADA said it is exploring tribal business corporations as a mechanism for local ownership shares in projects such as Ambler and that some mine proponents can, and historically have, required shareholder hire. Witness Warren Douglas, who spoke during public comment about jobs in his region, told the committee: “If not resource development, then what? … I want my grandchildren, my kids, to have a good life, have a job.” ADA said it will continue to work with communities on local hire provisions but did not present a single integrated state‑level plan for displacement or workforce transition.

Budget and personnel notes

CFO Jean Kornmuller briefed the committee on ADA’s FY26 management plan and the effects of recent statutory changes (SB 307 was cited) that moved staff and functions to other entities; ADA said it is shifting some contractual work to in‑house personnel and requested additional detail on a reduction in contractual services for the committee’s follow‑up.

What the committee requested

Senators asked ADA for written follow‑up on several items: a detailed delinquency and restructured loan list, a breakdown of contractual services reductions, clarification on the Mustang write‑down and recoveries, and additional detail on Ambler rights‑of‑way and local‑hire proposals. ADA said staff and officers — including its loan officer and chief investment officer — would provide additional written materials.

No formal action was taken; the hearing closed with committee members thanking ADA staff and asking for further documentation.","At a Feb. 17 Senate Finance hearing ADA reported its strongest recent statutory net income and reviewed investments and projects including loan participations, a methanol plant, Ambler Access and Anwar lease work; senators requested portfolio delinquency lists, project details and local‑hire plans.","actionData","errors"]

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Senators press ADA over plan to backstop up to $50 million in FEED work for proposed gas pipeline

ADA reports FY24 gains, details projects and loan portfolio as senators press for write‑offs and local‑hire plans