Deficit Reduction in Alaska

To: Joint Select Committee on Deficit Reduction
From: Big Dog(Anonymous)
Subject: Alaska's Military Bases

Dear Committee Members;

In 2005, the Ft. Wainwright Central Heat & Power Plant(CH&PP), located in Alaska, burdened the U.S. Taxpayers a Total Operation & Maintenance and General & Administrative Expense cost of $14,587,738.00. That amount included $10,000,000.00 for the cost of coal from Usibelli Mine transported by the state owned Alaska Railroad. The cost of coal “delivered” escalated 14% for the FY07 5-year Defense Logistics Agency contracts - in effect today. These contracts are up for renewal this year, more likely then not with supply contract cost increases. In the lower-48, costs for the same commodity decreased by 5%. It is estimated that the current 5-year contract is in the arena of $140-million, or about 6% of the “Installation” energy supply contracts managed by the DLA - a hefty hunk for just a single state of the Union. In 2008, the CH&PP went “Privatized” under a Joint Venture between Doyon Limited, an Alaskan Native Corporation under SBA 8(a) status and Fairbanks Sewer & Water, a private entity limited shareholder corporation. In 2010, the burden upon the U.S. Taxpayers for the same outcome upon this same facility was approaching $32,000,000.00, excluding the cost of coal, which now realized a yearly cost upwards of $15,000,000.00. This “Creep” is staggering and beyond comprehension. “Privatization” cannot be costing the U.S. Taxpayers less money as under “Privatization”, a revenue requirement burdens the effort, as we see occurring today. It looks promising on paper for the long run, but in reality it is heading in the wrong direction. These bases under “Privatization” in Alaska are draining the U.S. Treasury and should be re-considered under BRAC, Base Re-alignment and Closure commission. The utilities are vintage 50s and in a state of disrepair. With sky-rocketing costs of coal, skyrocketing transport costs due to energy price creep, as there exists no other alternative here in the Last Frontier, it would serve the U.S. Taxpayers interest to have these bases and the individual “mission” relocated to milder climates, wherein there is some semblance of competition with respect to energy contracts. Without the competition, prices will continue to escalate upwards here in Alaska. Please take this under consideration in your efforts to find a ways and means to curtail out-of-control spending, especially when other alternatives may exist elsewhere that could continue to perform the same “mission critical” requirements, like occurred most recently with an Air Force & ARMY joint venture effort, sharing resources. Of serious consideration to “closure” is the Eielson Air Force base outside of Fairbanks as is the Clear Air Force base, south of Fairbanks. These bases were designed and constructed when the Soviet Union was a threat, which is no longer the case today. Please take this under serious consideration. At a minimal request, the entire “Privatization” upon the military installations in Alaska should be evaluated by a 3^rd party auditing team, as it appears it is not working as intended. I bring this to your attention directly as you may not get an honest assessment from the Alaska delegation, as closure of any base has a drastic and chilling effect on the local economy, but the time has come to bite the bullet and make sacrifices.

Respectfully Submitted for Consideration: by Big Dog on September 11, 2011