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Alaska News

Public hearing set for discussion of Enstar gas price hike

  • Author: Sean Doogan
  • Updated: September 28, 2016
  • Published July 21, 2014

The Regulatory Commission of Alaska has scheduled a public meeting on Wednesday for discussion of a 48 percent rate hike for customers of Enstar Natural Gas Co., which began July 1.

The increase has already been approved by the RCA, the state agency charged with reviewing and approving utility rates. That means the average household served by the utility can expect its natural gas bill to go up by almost $40 per month.

Enstar has said the increase, called a gas cost adjustment, was made to "true up" the difference between the actual cost of gas used by its customers and how much it estimated they would use during the first quarter of the year. That is when the utility actually lowered its rates by about the same amount as the most recent increase, meaning its customers are now paying what they did about three months ago.

"This adjustment does not allow Enstar the opportunity to make more money," Enstar Director of Business Development John Sims wrote in an email Monday. "The amount we pay producers for natural gas is the same amount that customers are charged. We are not allowed to mark up this cost."

Enstar officials will be at the Wednesday RCA meeting to address questions about the increase from both commission members and the public.

"We hope this meeting will allow everyone to better understand the gas cost adjustment process, which can be complicated," Sims said.

The meeting was called after the RCA was inundated with calls about the increase after it was highlighted in local media reports. But that doesn't mean the bigger bills might go down soon.

"This meeting may not change anything," said Rodney Crum, the RCA's consumer protection and information officer. "The commissioners thought it would be a good opportunity to have Enstar explain it (the increase) to its customers. We have been getting a lot of calls because of the public interest in the issue.

Enstar is the state's largest natural gas utility, serving more than 137,000 residential and commercial customers from the Kenai Peninsula to the Mat-Su Borough.

The public meeting will be held at the Anchorage RCA offices, 701 W. Eighth Ave., Suite 300, at 9 a.m. Wednesday.

Sims said the utility doesn't expect to ask the RCA for another gas price increase this year. But the bill customers receive may again change.

"Our best estimate today is that fourth quarter gas costs will reflect a decrease," Sims said.

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