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Community protests Enstar rate volatility

By | July 23, 2014

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Community members packed the hearing room of the Regulatory Commission of Alaska Wednesday morning in Anchorage. They pushed for consistent gas pricing from Enstar in response to a recent big jump in rates.

People packed the room to listen to Enstar's explanation of the precipitous rate increase.

People packed the room to listen to Enstar’s explanation of the precipitous rate increase.

About 90 people filled the seats and stood in the hallway to tell theRCA their concerns about Enstar’s recent rate increase. The company is charging about 50% more for each unit of gas they sell from July to September. Resident Terry Saldana says she wants to know why.

“I understand that prices are going to fluctuate and go up and down but 48% to a newly retired person has a great impact on my budget.”

Carolyn Gardner testified before the Commission. She says she’s mad, and she wants the Commission to fix the volatility in prices. ”I think they should reconsider their okay of it. I mean it’s a ridiculously high increase.”

The RCA approved the increase in June.

Enstar representatives spoke before the commission and explained the jump in prices, called the Gas Cost Adjustment. Basically, Enstar over collected money from customers in the first quarter and then under collected in the second quarter. Enstar is not legally allowed to profit from selling gas.

In the past, the natural gas company only adjusted their rates once per year. Now they do it every three months because they have different types of contracts to buy gas from the producers, like Hillcorp and Bucaneer.

Enstar spokesman John Sims says that to make the rates more consistent throughout the year, they have to ask the RCA to change the rules that regulate how much they can charge for gas. ”So that’s one of the things we’re going to look at. we;re going to look at how that might impact our gas supply contracts, how it could impact our deliveries, and how it could impact the customers.”

Sims says in the meantime, customers can use Enstar’s budget billing system. Then, their bill would be exactly the same every month.

During the hearing the RCA discussed the possible need to investigate the way Enstar determines their Gas Cost Adjustment. In the end, they decided to give Enstar a few weeks to fix the volatility problem on their own. They will take up the issue again at the end of August.

The estimated average cost of natural gas for 2014 will be slightly higher than in was in 2013, but it’s still much lower than in 2009.

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