Anchorage Daily News

Aurora Power Resources has notified its commercial customers in Southcentral Alaska that it will stop supplying them with natural gas as of Monday, the Regulatory Commission of Alaska said.

Enstar Natural Gas Co., the main Southcentral gas utility, said that it can supply these customers with gas in December but that it might not have sufficient gas to continue this service after the end of the year.

Enstar has been saying for some time that it hasn't secured all of the gas it expects to need in 2009 from Cook Inlet region producers.

The company has been seeking regulators' approval of new contracts with Marathon Oil Co. and Conoco Phillips Alaska, to fill out its 2009 supply. The Regulatory Commission of Alaska has approved the contracts provided that the price specified in them are modified to comply with a new price cap the commission devised this fall. The price cap would indexed the local natural gas price to a blend of prices found in specific North American gas production basins.

That was more constraint on the price than Enstar had negotiated with Marathon and Conoco.

The RCA said Enstar's new supply contracts -- once finalized -- will enable Enstar in 2009 to continue supplying gas to the customers Aurora is cutting off.

"Once Enstar files the required (price) amendments, it will have sufficient gas under contract to continue service to these commercial customers after Jan. 1, 2009," RCA said. "The commission will continue to monitor the situation."

Aurora Power gets its gas from Aurora Gas, a small producer that has struggled to come up with a sustained, reliable supply from its wells. Last month, Enstar told the RCA that Aurora Power had notified Enstar that it might be reducing or ending gas shipments through Enstar's pipelines sometime in the next several months.

The Anchorage Daily News contributed to this article.

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