The utility told regulators this week that in the summer the plant would pump gas into an underground reservoir. In the winter the fuel would be removed to meet peak demand. Enstar pipes natural gas to Southcentral homes and businesses for heating.
The plant would be run by Cook Inlet Natural Gas Storage, a new subsidiary of Enstar's parent company, Semco Energy. Enstar, Chugach Electric Association and Municipal Light & Power of Anchorage would be the main customers. Chugach and ML&P burn natural gas to make electricity for their own customers.
A storage facility has been in the works for years because of natural gas shortages in Southcentral during the coldest weeks of winter, KTUU-TV reported.
So far, Semco has spent about $7 million on preparations. The total cost will be about $188 million.
Enstar plans to file its application with the commission at the end of this month and hopes to win approval by the end of the year. Public hearings are expected this fall.
"That storage facility will be loaded up during the summer months, and the gas then comes out during the winter months when our customers demand the gas," said Semco President George Schrieber Jr.
The storage should help make up for the shortage of Cook Inlet natural gas.
"All progress is good when it comes to energy development in Southcentral, in order to make sure we have enough energy in the summer and the winter to meet the needs of both businesses, residents, hospitals, military -- all of them count," said Jim Posey, general manager of Anchorage-owned Municipal Light & Power, which generates 88 percent of its power from natural gas.
This is the first time a utility in Alaska has developed an underground storage facility. Legislation spearheaded by Republican state Rep. Mike Hawker of Anchorage put the regulatory framework in place. It also offers tax incentives because consumers will ultimately be paying.
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