This bill proposes modifications to the royalty rate for the Kitchen Lights Unit, a significant natural gas source in the Cook Inlet region of Alaska. The legislature recognizes the importance of this unit for providing reliable and affordable energy to Southcentral utilities and ratepayers, especially in light of declining production and rising costs. To ensure continued gas production and maximize economic benefits for the state, the bill mandates a modification of the royalty rate to three percent of the gross value of production from the leases within the Kitchen Lights Unit, effective January 1, 2026.

Additionally, the bill includes provisions for auditing royalty calculations and allows for the termination of the royalty modification if it is determined that the modification was assigned without the commissioner's approval. The act is retroactive to January 1, 2026, and takes effect immediately upon enactment. This legislative change aims to support local energy needs and economic stability by extending the viability of gas production from the Kitchen Lights Unit.

Statutes affected:
HB0271A, AM HB 271, introduced 01/23/2026: 38.05.180