Southcentral natural gas utility’s customers hit with big increase in bill
July 2, 2014
By Sean Doogan | Alaska Dispatch: Beginning this month, Southcentral Alaska customers of Enstar – the state’s largest natural gas utility – will be digging deeper into their pockets to pay their bills.
Effective July 1, Enstar customers will see their average monthly bill increase by 48.5 percent, according to John Sims, Enstar’s director of business development.That’s a jump of $39.97 for the average residential customer.
Enstar said the increase is mainly due to a carry-over from the second quarter of 2014 – April to June – when it overestimated the amount of gas its customers would use.
Enstar, which serves more than 137,000 customers (residential and commercial) from Homer to the Matanuska-Susitna Borough, buys natural gas from several producers, including ConocoPhillips, Buccaneer Energy, Cook Inlet Energy and Hilcorp. Each contract has different terms, Enstar said, but in general, the more gas it buys, the cheaper it is.
In part because of an unusually warm Southcentral spring, Enstar’s customers used far less natural gas than the utility had budgeted for. That meant Enstar had to pay considerably more for the gas it used in the second quarter. The extra cost — 32 cents per 100 cubic feet of natural gas used – is being passed on to customers.
“Our (second-quarter) estimates turned out to be too optimistic,” Sims said.
But Enstar said it won’t be making a profit on the increase. As a regulated gas utility in Alaska, Enstar is prohibited from making money on the cost of the natural gas it sends to its customers, instead making its profits from the delivery of that gas.