Alaska2026Passed Legislature

HB271

Kitchen Lights Unit Royalty Rate Change

Last scannedSep 10, 2026, 12:32 AM

In one sentence

This bill sets lower royalty rates for specific natural gas leases in Alaska if companies prove the change saves money for customers, but it only becomes active if a drilling rig is moved to Cook Inlet by December 2031.

Sets a 3% royalty rate starting January 1, 2026, for leases in the Kitchen Lights Unit if cost savings are shown.
Sets a 5% royalty rate starting January 1, 2027, for other Cook Inlet sedimentary basin leases if cost savings are shown.
Requires the commissioner to write and deliver a report every five years on production costs, revenue, and energy prices.
Allows state officials to audit royalty calculations at any time.
Makes the law retroactive to January 1, 2026.

Companies holding leases in the Kitchen Lights Unit and Cook Inlet sedimentary basin
The commissioner of natural resources who must approve changes and write reports

The bill only takes effect if a lessee moves and uses a jack-up rig to drill in Cook Inlet before December 31, 2031.
Royalty rates are lowered only if the company proves the change results in cost savings for natural gas users.

Plain language

Royalty rate: The percentage of oil or gas value that the state receives from a lease.
Kitchen Lights Unit: A specific group of seven leases in Cook Inlet identified by division of lands numbers 389196, 389197, 389198, 389507, 389514, 389515, and 389923.
Jack-up rig: A mobile drilling platform with extendible legs that supports itself on the ocean floor.

Official record

Validated

KITCHEN LIGHTS UNIT ROYALTY MODIFICATION An Act relating to the royalty rate for the Kitchen Lights Unit; and providing for an effective date.

Official activity