Enstar customers see higher prices

Posted: Thursday, February 17, 2005

Due primarily to the high price of oil during 2004 and the higher cost of new gas supplies, Enstar customers can expect natural gas rate increases of between 16 and 18 percent in 2005, according to the company's division manager.

"On an annualized basis, total residential rates will rise about 17 percent, small commercial rates about 16 percent and large commercial rates will rise about 18 percent," said Charlie Pierce.

He said the average residential bill increased by about $12.50 per month as of Jan. 1 of this year.

"Since energy prices affect our gas cost, we cannot predict what the change will be for January 2006," he said.

However, the company's older gas supply contracts are coming to an end and are being replaced by newer contracts that are more closely tied to the Lower 48 energy prices.

"As a result, we expect the overall cost of gas, and therefore our rates, to go up over time," Pierce said.

Enstar expects to add between 300 and 400 customers on the Kenai Peninsula this year and said most of the new growth will occur along existing gas mains.

The company is exploring ways to begin offering service to the Ninilchik area.

The earliest the company expects to be able to provide natural gas service to Homer is in 2006 or 2007.

The estimate is based on the latest information on NorthStar Energy's drilling plans. NorthStar produces gas from the North Fork field north of Homer.

As of Dec. 31, Enstar provides gas service to 118,300 customers, 11,200 of whom are on the Kenai Peninsula.

"We are expecting another strong year of customer growth on the system, with the majority of the new customers coming from the Anchorage and the (Matanuska-Susitna) Valley portions of our service area," Pierce said.

Enstar has 100 percent of its supply requirements, including peak season requirements, committed through 2008.

"Beginning in 2009, we do have a small portion of our expected demand not yet committed, but we are working with other producers to contract for that, as well," Pierce said.

When asked if Enstar has made progress regarding the natural gas storage in order to meet future demand, he said current supply contracts call for gas suppliers to have sufficient peak and annual supplies available to meet Enstar's needs.

"We are aware that Unocal has developed some storage as one of its ways to meet its commitment to us," Pierce said.

All of Enstar's natural gas supplies come from Cook Inlet. Enstar's current suppliers are Marathon, ConocoPhillips, Chevron, Anchorage Municipal Light and Power, Aurora Gas and Unocal.

On the Kenai Peninsula, Enstar employs 17 people with an additional five or six seasonal employees added to help during the construction season.

Enstar at a Glance

Company headquarters: Anchorage

Manager: Charlie Pierce, division manager

Contact number: 262-9334

Number of employees on Kenai Peninsula: 17

Number of Kenai Peninsula customers: 11,200

Company outlook: Enstar anticipates adding between 300 and 400 customers on the Kenai Peninsula in 2005. Providing gas service to Homer, expected by 2006 or 2007, is dependent upon drilling results in the North Fork field.

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