Consumers in Southcentral Alaska will pay more for energy next year. Natural gas production and exploration in the Cook Inlet area have not kept pace with demand, and a Marathon commitment to supply gas to Enstar runs out at the end of the year.
This leaves Enstar with a fairly significant “Undesignated” source for gas supply after Dec. 31. Hilcorp is taking over Marathon’s Cook Inlet assets and has agreed to offer all available gas to Enstar after the transaction is complete, but it looks like administrative procedures will not allow the deal to be consummated until at least mid-January. Basically, Hilcorp cannot sell gas to the utilities or Enstar until they “have the keys” to the Cook Inlet assets.
Enstar may need to purchase more gas on a short term, day by day basis, at significantly higher prices if it is available at all, during the interim. I wonder if Marathon and Enstar can extend their agreement for a month.
— Steve Pratt
Executive director, Consumer Energy Alliance Alaska