Homer Electric announces gas purchase agreement

Homer Electric Association announced a natural gas purchase agreement to fuel the utility’s Independent Light project.


Pending regulatory approval, HEA would begin purchasing between 4.0 and 4.5 billion cubic feet of gas in January 2014, which is when the utility is expected to start producing its own power rather than purchasing it from Chugach Electric Association. The contract would last through March 2016, with the possibility of two one-year extensions.

“It is projected that this will fully meet HEA’s total gas needs for the contract duration,” said HEA representative Joe Gallagher in an email.

Information as to how the contract will affect consumer rates, and the price the association will pay for the gas, was not immediately available.

Gallagher said those things will be addressed when the utility files for approval with the Regulatory Commission of Alaska, which he expects to happen later this month.

“In general, the contract price is commensurate with pricing in the Cook Inlet gas market and with other gas contracts previously approved by the RCA,” said the association’s statement.

The contract is with Union Oil Company of California, a subsidiary of Chevron. Chevron recently announced that it sold its Cook Inlet assets to Hilcorp. Gallagher said that the contract has been in discussion for 18 months, and includes provisions that address the binding nature of the contract to successors or assignees for both parties.


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