SB 180 emerges as possible vehicle for Alaska LNG deal but also tied to pension fight

By SUZANNE DOWNING

May 15, 2026 – As the Alaska Legislature barrels toward the end of session, a relatively narrow energy-regulation bill is emerging as a possible last-minute vehicle for far broader negotiations involving the state’s long-stalled Alaska LNG project and the politically explosive return of defined benefit pensions for public employees.

The House Rules Committee is scheduled to meet at 1 pm Friday on Senate Bill 180, legislation sponsored by Senate Majority Leader Cathy Giessel that originally dealt only with restoring the Regulatory Commission of Alaska’s oversight authority over imported liquefied natural gas contracts used by regulated utilities.

But by Thursday, lawmakers had already transformed the bill once.

A new House committee substitute for SB 180 added language directing the Alaska Energy Authority “to the maximum extent feasible” to proceed with development of the long-dormant Susitna River hydroelectric project, better known as Susitna-Watana.

Now, with the bill sitting in House Rules during the final days of session, Capitol insiders are increasingly viewing SB 180 as a potential “vehicle bill” that could be amended further to include provisions tied to the governor’s Alaska LNG tax-relief legislation, and possibly conditioned on passage of the controversial defined-benefit bill they passed that is now sitting on Gov. Mike Dunleavy’s desk.

The maneuvering comes as the administration’s flagship LNG legislation, HB 381 and its Senate companion SB 280, appears stalled in the Senate Resources Committee chaired by Giessel.

Those bills would dramatically restructure taxes on the proposed export-oriented Alaska LNG project by replacing traditional property taxes with a much lower alternative volumetric tax based on gas throughput. The Dunleavy administration argues the tax changes are necessary to keep the roughly $46 billion project economically viable and attractive to investors.

Critics, including some Republicans and industry groups, have accused legislative leaders of slow-walking the LNG legislation while using it as leverage in negotiations over restoring a defined-benefit pension system for state employees.

No amendment language tying the issues together had been publicly released as of Friday morning. But the speculation intensified after SB 180 was abruptly moved into Rules, where major late-session rewrites often occur behind closed doors before floor action.

The original version of SB 180 passed the Senate unanimously, 20-0, on March 31.

The bill repeals a section of law added in 2024 through HB 50 that limited RCA authority over imported LNG supply contracts. Supporters say the repeal is necessary to ensure utilities importing LNG to address Southcentral Alaska’s looming gas shortages remain subject to state oversight designed to protect ratepayers from excessive costs.

“The legislation does not expand RCA jurisdiction to a privately held import terminal,” Giessel wrote in a sponsor statement included in the committee documents. “It merely lifts the cloud on RCA jurisdiction over certificated utilities’ gas supply contracts from an LNG import terminal.”

The bill’s supporters say restoring RCA oversight would simply treat imported LNG contracts the same way Alaska already regulates gas supply agreements from Cook Inlet producers.

House Labor and Commerce advanced the committee substitute Thursday morning, adding the Susitna hydro language before the bill was immediately referred to Rules.

A second Labor and Commerce hearing scheduled for Friday afternoon was then canceled, further fueling speculation that legislative leaders intend to move the bill quickly through Rules and onto the House floor. Session comes to a close Wednesday.

Whether SB 180 ultimately becomes the vehicle for a broader LNG compromise — or a bargaining chip tied to pensions — may become clear within hours as lawmakers scramble to close out the session.