Question #1: Can I file my RFA application electronically, ie, via email?
An applicant must file one hard copy of its application, with all attachments and appendices, and one copy on a compact disk in PDF print-ready format in response to this RFA in the AGIA License Office by the application deadline. AGIA applications may not be filed electronically under this RFA.

Question #3: What if I believe portions of my application contain proprietary information? What is the procedure for identifying those portions, and will they be held confidentially?
In requesting confidential treatment of information, the Applicant must mark each page containing information that it requests to be kept confidential, and include the following statement: THIS PAGE CONTAINS PROPRIETARY OR TRADE SECRET INFORMATION THAT IS CONFIDENTIAL TO [APPLICANT'S NAME], WHO REQUESTS THAT THE INFORMATION BE KEPT CONFIDENTIAL AND EXEMPT FROM PUBLIC DISCLOSURE TO THE EXTENT PROVIDED IN AS 43.90.150 AND AS 43.90.160. For each page marked as confidential, the Applicant must include a copy of the page with the trade secret or proprietary information redacted.

Question #10: 1. Please tell me how many times the AGIA RFA has been downloaded, and what, if known, were the locations the RFA was downloaded to, i.e. Houston, Texas, Anchorage, AK, as of the time this question is received. 2. Can you provide an estimate of the length of time the completed RFA applications will be reviewed after the Oct 1, 2007 submittal? Thanks.
1. The state does not maintain information regarding who has downloaded the RFA, how many times it has been downloaded, or from where such downloads may have originated. 2. The commissioners cannot at this time predict the length of time that the evaluation process will take. The public’s 60-day review and comment period will commence as soon as the commissioners have determined that the applications are “complete.” In addition to that 60-day period, the length of the evaluation period may depend upon the number of complete applications received, the diversity of applicant proposals, and the complexity of the analysis. It remains the commissioners’ goal to have a proposal forwarded to the Legislature in time for the Legislature to approve the commissioners’ selection during the Legislature’s 2008 regular session.

Question #12: What will the state do to encourage current North Slope producers to participate in an open season conducted by an independent pipeline company?
The state will closely monitor the actions of all relevant parties leading up to and during any open season. The state will take whatever actions it can as a sovereign to move the project forward and assure that gas is produced from its lands consistent with the terms of the leases and unit agreements. Consistent with the new approach symbolized by AGIA itself, Governor Palin is determined to use all commercially reasonable and legal means to insure that Alaska’s gas resources are developed. The North Slope Producers, as reasonable commercial players, should commit gas in an open season for an economic pipeline project, even without the state taking steps to “encourage” their behavior. The producers understand the value of monetizing their gas, as well as the value of booking their reserves. As the pipeline project moves forward and there is more certainty about the tariff rate structure and netback values, the project economics will become clear. The producers will want to make firm transportation commitments to ship their gas on an economic pipeline project, regardless of who owns and operates the project. The producers have a contractual duty to commit gas to a pipeline where it is economic to do so, under the terms of their leases and unit agreements with the State of Alaska. At the current and projected price of natural gas, and assuming a reasonable tariff structure on the gas pipeline, it will be economic for the producers to make a firm commitment to ship the gas they have a right to produce from state lands. AGIA provides producers with additional incentives to commit their gas to the pipeline. These incentives apply only to gas committed during the first open season for the licensed project. The producers have expressed concern about predictability of payments they will have to make to the state once gas begins flowing. They have asserted that those concerns could affect their participation in an open season, which could be conducted by an independent pipeline company, a producer-owned pipeline, or by another party. AGIA addresses the concerns by providing predictability in several important areas, including the following: (1) the state will adopt regulations defining the method of valuing its gas royalty share, and how the state chooses to take its royalty share in value (money) or in kind (the gas itself) (AS 43.90.310); (2) AGIA entitles leaseholders to an exemption from potential future increases in the state’s gas production tax for ten years(AS 43.90.320); and (3) AGIA applications must commit to “rolled-in” treatment of expansions (RFA Section 2.4.1.3 Rolled-in rates). AGIA caps the roll-in at 15% above initial rates. Thus, while the initial firm shippers can face rate increases resulting from expansions, AGIA limits those increases to a reasonable level.

Question #13: Section 2.1.1 says the project description must include the "diameter, wall thickness and pipe yields." I believe the latter item should read "pipe yield strength." Please clarify.
The questioner reached the correct conclusion. The project description must include the diameter, wall thickness and pipe yield strength.

Question #14: Section 1.13.10 Initial Application Review for Completeness The RFA says that the "In order to evaluate whether an Application is complete, the Commissioners may request, in writing, that Applicant provide additional clarifying information." I assume that the information in response to the request will be made available to the public for review; but, it is not clear that the Commissioners written request will be made available to the public for review after the commissioners publish notice. Please clarify that it is the intent of the Administration to be transparent and also publish the letter request for additional information as well as the additional information provided.
If it is necessary for the commissioners to request additional clarifying information, then the commissioners’ request and the Applicant’s response to the request will be made a part of the Application and released for public review and comment when the completeness review of all Applications has been concluded under AS 43.90.160; except if the request is for additional clarifying information about data included in the application that has been determined to be confidential under AS 43.90.150. In that case, a summary of the question and answer will be made public.

Question #15: 1.14 Rejection of Applications This section states that "If the Commissioners reject an Application, Applicant will be notified in writing that its Application has been rejected and the basis for rejection." Please clarify that it is the intend of the Administration to not only provide a copy of the rejected application for public review but also the Commissioners letter stating the basis for rejection.
Yes, the Administration will make public the written basis for its rejection of an application deemed incomplete under AS 43.90.130 and the rejected application itself in accordance with AS 43.90.160(a).

Question #16: Re: 2.8.1 Description of Applicant and Participating Entities The requirements of RFA Section 2.8.1 originate in AS 43.90.130(19) and require the applicant to describe “…all entities participating with the applicant in the application and the project proposed by the applicant, and persons the applicant intends to involve in the construction and operation of the proposed project;” Please clarify the scope of this requirement. The term “construction and operation” implies a scope beyond just the firms with an equity interest in the project, please clarify. Is the requirement to be interpreted as including the entities involved in the work under RFA Section 2.2 Development Plan?
The phrase “all persons the applicant intends to involve in the construction and operation of the proposed project” in AS 43.90.130(19) is intended to describe entities that the Applicant intends to bring in as project partners. Also, it is intended to describe entities that the applicant currently believes it may utilize in performing work in the Development, Execution, or Operation phases of the project. To the degree that applicants do not yet have fixed contractual arrangements or commitments with respect to such entities, they nevertheless should describe how they plan to identify and select such entities.

Question #17: If a gas buyer or buyers intends or intend to solicit gas sales from North Slope gas producers is there a minimal acceptable price which the buyer or buyers must offer for the State to consider the application responsive?
No

Question #18: I have submitted a question that has not been answered. Will unanswered questions be posted anywhere with an explanation as to why they weren't answered or an annotation that they will not be answered or both? If not, how will I know why the question was not answered?
Some complex questions have required extensive analysis, resulting in a short delay in posting the response. Please be patient and keep monitoring the site, as questions will be answered as quickly as possible. Only inappropriate, irrelevant or redundant questions will not be answered (e.g. a submitter who hits the “submit” button twice, resulting in two questions asked, only one of which will be answered). A record is being maintained of all inquiries, answered or not.

Question #19: 1. In section 2.1.4 Gas Processing and NGL Markets, page 16 of the AGIA RFA, it is suggested that the Applicant anticipate the gas quality coming from the North Slope facilities into the GCP. Since there is such a large range to the make up of possible gas streams coming from the North Slope facilities and the value of those streams which could have a wide-ranging a effect on the economics related to the producer netback at the wellhead, will the evaluation of the Applications be fairly considered for whatever gas composition an Applicant may choose? That is, given that a conservative estimate on the quality and the content of the gas stream into the GCP could increase the cost estimate. Will these factors be taken into consideration or would such a conservative gas composition estimate be viewed negatively in an Application?
The quality and composition, and thus value, of North Slope gas is not something over which many Applicants’ direct control and thus not easily amenable to Commitment. Consistent with 3.2.4, in the absence of Additional Commitments, or clear demonstrations of differentiating factors, the state will use normalizing assumptions to assess gas value, as affected by gas composition, across applications. Several of the parties who requested modifications to the RFA asked for an estimate of gas composition. The state is evaluating all of the requests for modification and may include an estimate of gas composition in a modified RFA to be issued no later than August 15.

Question #20: In section 2.3.1 Project Execution Plan, page 24 of the AGIA RFA, there is a plethora of plans that are required for submission. Given that there is a requirement for Construction, Workforce, Stakeholder, Contract, Environmental, and Materials Plan, it was uncertain to this Applicant what the AGIA RFA intended Applicants to address under “Resource Plan”. Could AGIA provide an example or some additional information as to the intended scope or topic of the “Resource Plan”?
The RFA has listed several management areas (Construction, Workforce, Stakeholder, etc) that must be managed effectively by the applicant in the concurrent execution of the several major sub-projects of their proposed project. The Execution Plan content should indicate how the applicant intends to manage the project management functions for an integrated group of major sub-projects. “Resource Management” is about the human resources required by the applicant’s management team required to effectively implement the project management areas required (and suggested in the RFA) for the execution of a group of major sub-projects. The Execution Plan should indicate how the Applicant will manage the individual management areas (e.g. use extant internal company processes and procedures or employ a project management contractor and use their systems).

Question #21: General Comment. It is understood by the Applicant that the goal of the submission date is intended to allow sufficient time for the scheduled public review, as well as to be ready in time for the legislative session of 2008. However, there is a tremendous amount of information requested, and it would be beneficial if Applicants had additional time to more thoroughly prepare their Applications, discuss possible joint ventures, and seek necessary approvals. This Applicant requests an extension of the time period for submission of Applications to October 15, 2007, or November 1, 2007.
The commissioners have the right to grant extensions, but have not yet decided to do so. The commissioners will revisit question of the appropriate deadline in light of the comments received by the July 23 deadline for comments on the RFA. Notice of any deadline changes will be posted on the AGIA documents website.

Question #22: In section 2.2.3.9 Commitment to In-State Service, page 20 of the AGIA RFA, there is a requirement that 5 delivery points be made for instate use. Can the State offer any suggestions as to what the 5 locations should be? Clearly, Anchorage, Fairbanks and (the Y line?) are logical delivery choices, but rather than the Applicants arbitrarily choosing various small towns along the route, were there other delivery sites anticipated or desired? If the pipeline is FERC regulated, by definition, any party or parties seeking to access (open access rules) the line will have the right to do so (at any time in the life of the asset), provided they are willing to reimburse the pipeline company for the costs associated with the interconnection and the gas put into the line meets certain gas quality requirements. In conclusion, if there is predetermined delivery destinations/points contemplated, can you please provide the list? Or should Applicants simply make a best guess?
To the extent that applicants determine that the project will be subject to FERC’s jurisdiction, FERC Order Nos. 2005 and 2005-A require that in conjunction with an open season project sponsors “conduct or adopt a study of gas consumption needs and prospective point of delivery within the State of Alaska and rely upon such study to develop the contents of the notice [of open season] …”. (18 C.F.R. §157.34(b)). AGIA does not require the identification of in-State delivery points as part of the application unless the location of such points is known at the time of the application (See AS 43.90.130 (2)(B)). The state does not have a list of required in-State delivery points and the evaluative criteria do not assign relative values to different delivery points. AGIA requires that all applicants commit to provide at least five in-State delivery points.

Question #23: General comment around section 2.2.4.4, page 24. For portions of the line and ancillary structures that are non-FERC jurisdictional, what involvement will the Regulatory Commission of Alaska have and what specific regulations will apply? Will the RCA have the ability to change rates and regulations that govern the pipe and, if so, what is the basis for that discretion?
Applicants should review and assess the RCA’s jurisdiction over components of the project not within FERC’s jurisdiction. The RCA’s enabling statute is AS 42.06, and the RCA website is www.state.ak.us/rca.

Question #24: General comment around section 2.2.4.4, page 24. If any portion of the Project, (e.g. gathering lines and gas processing plants), are determined to be outside the jurisdiction of the Federal Energy Regulatory Commission, would these facilities automatically be within the jurisdiction of the Regulatory Commission of Alaska (RCA)? If gathering lines and/or gas processing plants are determined to be within the jurisdiction of the RCA, does the RCA’s authorization to construct and operate also include regulation of rates charged for services? Please explain what involvement will the RCA have and provide the specific regulations that will apply?
Applicants should review and assess the RCA’s jurisdiction over components of the project not within FERC’s jurisdiction. The RCA’s enabling statute is AS 42.06, and the RCA website is www.state.ak.us/rca. The scope of the RCA's jurisdiction is defined in AS 42.06.140.

Question #25: Will the state provide data which demonstrates the quality of the natural gas expected to be transported so that design parameters of the treating facility can be assessed? Will the state provide data which demonstrates the quality of the natural gas expected to be transported so that design parameters of the NGL processing facility can be assessed?
Post Treatment Gas Composition Estimate Component Composition (Lean Gas Case) Mole Fraction Composition (Rich Gas Case) Mole Fraction N2 0.007 0.006 CO2 0.015 0.015 C1 0.899 0.864 C2 0.058 0.071 C3 0.017 0.036 IC4 0.001 0.003 NC4 0.002 0.004 C5+ 0.001 0.001 1.000 1.000 BTU Content cubic foot 1067 1118 (Pre LPG Extraction) Applicants should assume that the gas extracted from the Prudhoe Bay reservoir contains 12% CO2.

Question #26: Can the successful applicant expect a cooperative and streamlined regulatory/permitting process from the State? Where can we find the details for these critical requirements?
AS 43.90.260 mandates that agency reviews will be expedited to meet necessary project deadlines. Under AS 43.90.250 the Governor will appoint an AGIA coordinator who will work with the licensee and the various state agencies with jurisdiction over various components of this gasline project. Agencies may not include a “term or condition that is not required by law if the coordinator determines that the term or condition would impair in any significant respect the expeditious construction, operation or expansion of the project” under AS 43.90.260(b). Nor may state agencies “add to, amend, or abrogate any certificate, right-of-way, permit, or other authorization issued to a licensee if the coordinator determines that the action would prevent or impair in any significant respect the expeditious construction, operation, or expansion of the project,” under AS 43.90.260(c). The specific regulatory requirements are found in Alaska statutes and regulations.

Question #29: A request has already been made via this website for an extention of time to submit the RFA reaponse. The first writer accurately describes the time constraints to make such the RFA response and therefore I join in the request for a time extension to at least October 15th and ideally to November 1st.
The deadline for RFA applications has been extended to November 30, 2007.

Question #30: In Section 1.21 of the RFA it is stated that the application will be "weighted by the likelihood of sucess of the proposed project". Does the state have a procedure or system for weighting the projects so that applicants can "self-test" the parameters of their projects?
The factors that the Commissioners will use to evaluate the application are listed in 43.90.170.The methods used to evaluate and rank the applications will be designed, in part, based on the nature of the applications submitted. Therefore, the Commissioners will not make public a “system for weighting the project” before the application deadline.

Question #31: In Section 2.1.1. "Pipeline", in the last bullet the requirement to accommodate a low cost expansion is cited. The RFA does not specify a time line for such expansions or how the costs of the prospective expansion will be managed by the state. Is there any guidance that the state can offer regarding how it will specify the timing and cost management for any future expansion?
No. The timing and cost of expansions will be driven by the market. The RFA requires a Licensee to expand its system in a prompt and diligent manner, i.e., “in a manner that is commercially reasonable in the interstate gas pipeline industry in the U.S. with respect to timing and execution of relevant actions.” Applicants are requested to provide the estimated volumes, proposed facilities and capital costs, and incremental unit rates assuming no inflation for cost components other than cost of capital, which should be based on current market conditions. Applicants are requested to demonstrate that its initial design for the pipeline could accommodate within the rolled-in rate limitations set forth in AS 43.90.130 (7).

Question #32: In Section 2.2.3.9. "Committment to In-State Service". The title of this section indicates a service requirement. The body of the text of this section, however, refers to the establishment of delivery points in the state. Is the intent that the applicant demonstrate that it has provided for a minimum of five delivery points within the state but that the servicing of the gas to be delivered from those points to Alaskan markets will be handled by third parties, e.g., a local distribution company, as opposed to the applicant? Is there any projection available from the state as to the future gas demands of Alaska?
The RFA requires that the applicant have five delivery points within the state, and requests a description of the applicant's plan to choose those points. The RFA does not require a description of the plan to get gas from those off-take points to gas consumers. A recent study of demand for natural gas in Alaska can be found at http://www.dog.dnr.state.ak.us/oil/products/publications/otherreports/otherreports.htm

Question #33: In section 2.2.3.15 "Plan for Gas Processing and NGL Markets" it is required that the applicant must set forth rates related to NGL processing. Who will own the NGL components that are that are transported in the pipeline along with the natural gas to the processing plant? Does the state hold title to a portion the NGL's that are shipped in the pipeline?
The NGL components are owned by the producer until they are transferred. The state may own a portion of the NGLs if it exercises its right under the lease agreements to take its royalty share in kind.

Question #34: In Section 2.3.3. "Project Labor Agreement", is the specified labor agreement requirement exclusively for the construction of the piepline and its associated facilities? Or does the contemplated labor agreement also require provisions for the operations of those faclities?
The Project Labor Agreement requirement is designed to ensure expedited construction of an Alaska gasline project. Nothing in AS 43.90.130(17) requires such an agreement for subsequent operation of the gas line after construction has been completed. Likewise, nothing in the AGIA would prohibit such an agreement between the licensee and any labor representatives of persons or entities hired to operate the line in the future.

Question #35: In Section 2.3.4 "Alaska Hire" it is required that the applicant commit to hire "qualified" residents. What is the basis for a resident to be qualified? Also, is there a qualification requirement and a qualification basis for the businesses, hiring facilties, job centers and associated services referenced in this section?
One of the goals of AGIA is to promote, to the maximum extent allowable by law, the hiring of qualified Alaska residents, contracting with Alaska businesses and the use of in-state hiring facilities on the project. Recognizing that there are legal and practical limitations on the State’s ability to require the licensee to hire only Alaska residents or contract with Alaska businesses, the AGIA seeks a commitment by the potential licensee to make good faith efforts to promote the hiring of qualified Alaska residents and contracting with Alaska businesses to benefit the State economy. An Alaska resident is defined by AS 01.10.055(a). That section states that “A person establishes residency in the state by being physically present in the state with the intent to remain in the state indefinitely and to make a home in the state.” AS 01.10.055(b) lists the criteria by which compliance with subsection (a) is determined. Generally, subsection (b) requires the maintenance of a place of abode within the state for a period of at least 30 consecutive days, and proof that the person is not claiming out-of-state residency for any purpose or obtaining benefits under a claim of residency in an out-of-state location. The term “qualified” in AS 43.90.130(15) refers to the state of an individual’s education, training, experience and abilities, including any required licenses or certifications, to perform a particular job or function. Thus, AS 43.90.130(15)(a) seeks a commitment by the proposed licensee to hire persons meeting the definition of a “resident” under AS 01.10.055, who has, in the employer’s opinion, the necessary education, training, work experience and abilities to perform a particular job or function required by the project. In terms of the commitment to contract with Alaska businesses and utilize in-state hiring facilities, including the job centers and services operated by the Department of Labor and Workforce Development, the intent of the provision is to promote, to the maximum extent permissible under law, the use of Alaska businesses as suppliers and subcontractors. Any business with an Alaska business license that complies with the state laws related to operation of a business within the state, would qualify as an Alaska business. The intent of the subsection seeking a commitment to utilize in-state hiring facilities and the Department of Labor and Workforce Development services is to provide in-state residents and the licensee with the maximum access and timely information concerning job opportunities and the availability of “qualified” residents to fill open positions, and to facilitate the hiring of in-state residents. Information gained by the Department through this provision will also assist the Department in allocating available training resources to maximize the effect of those efforts in preparing Alaska residents for jobs on the project.

Question #36: In Section 2.5 "Project Cost Estimates" the estimated costs required to operate and maintain the pipeline and associated facilities is not mentioned. Does the state require such operations expense estimates and maintenance capital expenditures estimates to be included by the applicant for the state to use in its NPV or other application evaluation criteria?
Section 2.5 Project Cost Estimate was intended to cover only the costs associated with designing and building the project. Operation and Maintenance costs are an important component of the cost of service calculation and should be included in the response to Section 2.2.3.5 Rate Structure and supporting Information. Applicants are encouraged to include a detailed description of the basis for their operations and maintenance costs projections including any differentiating factors that would support applicant’s ability to operate the facilities at a lower cost than industry norms. This should also include the ongoing requirements for maintenance capital expenditures.

Question #37: There is a corrested version of the RFA posted on the AGIA web site. It is dated July 16, 2007. Can the State post a version with the changes highlighted/noted somehow so that a potential Applicant does not have to reread the entire document for comparison to the new version? And do so on any future RFA revision postings.
Yes

Question #38: In Section 2.5 "Project Cost Estimate" it is stated that "All estimated costs must be based on 2007 pricing and market conditions. These cost estimates must also be expressed as unescalated cash flow...". Yet the "Rate Structure and Supporting Information" requirement of Sections 2.2.3.4 and 2.2.3.5 will require that the applicant include escalted expenses to establish rates. Since the time line for the project is several years in duration, the requirement for unescalated cash flows in the project may be in conflict with rate designs. Does the state have any concerns regarding unescalated project cost estimates and escalated rate design factors for its evaluations of the aplications?
The information and rate projections requested in Sections 2.2.3.4 and 2.2.3.5 was not intended to include costs or expenses escalated for inflation. Thus, all of the applicant’s costs, rates, and forecasts in these sections should be derived assuming no inflation; except for the cost of capital which shall be based on current market conditions. The reason for this is to ensure that all applications can be compared on a uniform basis. Applicants, however, may adjust projected rates to accomplish specific objectives of the applicant (e.g., “levelized” rates) which should be described in detail. If the applicant commits to limit or cap rates to protect shippers from cost escalations or other risks, that should also be specified.

Question #39: In Section 2.10.2 "Technical Viability". "Applicant shall submit a system simulation model..." Can the state indicate its expectation regarding the model? Is there a specific software application that the state is expecting to see for its evaluation? Is there a base gas composition and flow rate that will be used by the state to compare the various simulations? Will the state itself run various cases of the simulation, or is it the expectation of the state that the applicant will submit various case studies or sensitivities for the state to evaluate?
Applicants need not use any particular simulation model. It is the State’s expectation that the Applicant will use a model with sufficient capabilities to verify the technical viability of its proposed facilities. The State is expecting that the Applicant’s model will address all the normal operational factors. The State will not require the Applicant to provide the model but does expect the Applicant to provide enough information to verify the technical viability of the case(s) being presented. Base gas assumptions are provided in the amended RFA.

Question #40: In Section 3.2.4. "Application of Uniform Common Data" In this section it is stated that "...the state will use uniform or common cost and schedule related factors." Would the state be able to give examples of these factors to clarify what it means by "uniform or common cost" factors? Would the state also expand on what would trigger the use of these factors by the state in evaluating the value of the state's NPV in a given application?
Examples of “... uniform or common cost and schedule related factors” potentially include such elements as inflation rates for material and labor, construction cost components such as indirect labor and field overhead cost and construction labor productivity. The State will analyze the reasonableness of Applicants’ factors, and will use uniform factors in its analysis absent a demonstrated ability to control a factor, and a commitment to do so.

Question #41: Section 1.9. Reporting RFA Errors, Omissions, or Ambiguities; Amendments and Section 1.10. Addenda to the RFA (p.4). The deadline for reporting RFA errors, omissions or ambiguities is no later than thirty days before the Application Deadline of October 1, 2007. The Commissioners may publish an amendment as an addendum to the RFA not later than fifteen (15) days before the Application Deadline, October 1, 2007. These timelines are too close to the Application Deadline for the Applicants to review and digest any changes or amendments to the RFA and to make the resulting modifications to their Applications. We request that the timelines be shortened to require that any errors, omissions or ambiguities be posted by July 31, 2007 and any amendments to the RFA be published by the Commissioners by August 15, 2007.
The deadline for reporting RFA errors, omissions or ambiguities has been modified to sixty days before the application deadline, or October 1, 2007. Any resulting amendments to the RFA will be posted on the AGIA website no later than fifteen days later, by October 15, 2007.

Question #42: Section 1.13.3. Authorized Signature and Certification (p.7) At the end of the last sentence of the second paragraph, insert the following: “The purpose of the certification is to ensure that the person signing the Application and CERTIFICATION has the authority to commit and bind Applicant, and Applicant’s successors and assigns, to perform the commitments and obligations enumerated in the Application. Nothing in the Application or CERTIFICATION creates nor is intended to create personal or individual liability on the part of the person signing the Application and CERTIFICATION. In addition to the above or in the alternative, we could recommend the following: Section 5.5. APPENDIX E - CERTIFICATION (p.56) At the end of the first sentence in the CERTIFICATION, add the following: “The purpose of this CERTIFICATION is to bind Applicant to perform the commitments and obligations enumerated herein. This CERTIFICATION does not create any personal or individual liability on the part of the signatory.
Signing the certification (Appendix E to the RFA) on behalf of an Applicant does not create individual or personal liability on behalf of the signatory. Rather, the purpose of the certification is, among other things, to reflect the Applicant’s agreement in writing that if selected as the Licensee it will be contractually bound to fulfill the commitments set forth in its Application. Accordingly, the State will clarify Section 1.13.3 by adding the following language: “Nothing in the certification is intended to create personal liability on the part of the person signing the certification.”

Question #43: Section 1.17. Written Requests for Additional Data or Clarification (p.10) Given the current wording of Section 1.17, upon written request to an Applicant by the Commissioners for additional data or for clarification, an Applicant may use the opportunity to supplement or improve its Application, with the benefit of having had a chance to review all of the other Applications during the public comment period. We request that Section 1.17 be modified to prevent such an occurrence with language to the effect of: “Any additional data or clarification provided by the Applicant upon request by the Commissioners cannot be of a nature that is inconsistent with the Applicant’s original Application.”
Section 1.17 does not permit an Applicant materially to alter its Application when responding to data or clarification requests. Section 1.17 provides that responses to requests for additional data or clarification must “directly and only respond to the Commissioners’ request. Any additional information provided which is not responsive, in the Commissioners’ discretion, may be disregarded.” In addition, this language must be read in conjunction with Section 1.13.8, which provides (emphasis in original): “Moreover, each applicant should prepare and submit its Application as representing its best and final offer. Applicant may not make any material change to the Application after the Application Deadline.” An Applicant’s response to a request for data and clarification must be narrowly tailored to address directly and only the request.

Question #44: Section 2.1.2. North Slope Gas Treatment Plant Please provide gas composition data for gas upstream of the North Slope Gas Treatment Plant (GTP). This information is required for the design of the GTP as well as determining NGL removal and marketing needs.
Post Treatment Gas Composition Estimate Component Composition (Lean Gas Case) Mole Fraction Composition (Rich Gas Case) Mole Fraction N2 0.007 0.006 CO2 0.015 0.015 C1 0.899 0.864 C2 0.058 0.071 C3 0.017 0.036 IC4 0.001 0.003 NC4 0.002 0.004 C5+ 0.001 0.001 1.000 1.000 BTU Content cubic foot 1067 1118 (Pre LPG Extraction) Applicants should assume that the gas extracted from the Prudhoe Bay reservoir contains 12% CO2.

Question #45: Section 2.2.4.5. Commitments for a Canadian Pipeline Project – error in RFA (p.24) The definition referred to in the RFA for Canadian certificates of public convenience and necessity is AS 43.90.900(4), which in fact defines “Certificate of Public Convenience and Necessity” as a certificate issued by FERC or the RCA. This definition should be amended to refer to a more generic reference or to specifically refer to a certificate issued by the NPA/NEB.
The reference to AS 43.90.900(4) was an error. The RFA will be modified to eliminate this reference. Applicants proposing a pipeline through Canada must set forth and commit to their plan and timing for obtaining any necessary Canadian authorizations, including NEB or NPA authorizations or amendments required in order to construct and operate the Canadian facilities proposed by the Applicant.

Question #46: Section 2.10.1. Economic Viability and Section 2.10.2. Technical Viability (p.33) Section 2.10.1 requires “an electronic copy of the analysis, in MS Excel, shall be filed with the Application” in relation to the project economic viability analysis and Section 2.10.2 requires Applicants to submit a “system simulation model of the proposed project to demonstrate technical viability”. The economic viability analysis in MS Excel format and the system simulation model are proprietary. The reports generated from an Applicant’s economic viability analysis and the system simulation model contain the information necessary for the Commissioners to evaluate an application. Please modify Sections 2.10.1 and 2.10.2 to request only the final electronic reports and data from the economic analysis and the system simulation model such that the Commissioners may still manipulate the data but not the analysis and model themselves.
Applicants are not required to provide their individual models. However, the State may seek clarifying information from Applicants to verify their assertions. Applicants should provide information about their models to help the State understand the Applicant’s perspective on the technical and economic viability of the proposed project.

Question #47: Section 3.2.1. State Revenue Streams (p.37) In order to ensure Applications are evaluated and compared in a consistent manner, please provide common assumptions for every Applicant to use in preparing their Applications, in particular: (a) interest rates, with and without Government loan guarantees; (b) currency exchange rates – US/Canada/Euro/Yen; (c) inflation rates; (d) tax rates and methodology for use of the following: (i) income tax; (ii) property tax; and (iii) royalty rates, (e) natural gas prices at Alberta hub; and (f) LNG prices at likely market points: (i) California; (ii) Washington; (iii) Oregon; (iv) Mexico; and (v) British Colombia.
To a significant degree the requested “common assumptions” go to general economic parameters that are not within the direct control of an Applicant (i.e., economy-wide interest rates, exchange rates, inflation rates, government tax rates, and gas prices). However, in some cases an Applicant can manage these risks and make commitments to do so in its Application. For example, the appropriate cost of debt, given the presence of loan guarantees, may be affected by an Applicant’s commitment to a financing plan. Such commitments will distinguish an application. Thus, the state will not require assumptions that could limit an Applicant’s ability to distinguish itself through such commitments. In the absence of such commitments, however, Applicants should use the interest rates, exchange rates, inflation rates, royalty and tax rates, natural gas price and oil price (if relevant) referenced below in preparing their applications. If applicants make commitments regarding these factors or have unique assets, however, they should benchmark their estimates against