Chugach Electric plans LNG imports as Cook Inlet gas runs short

Chugach Electric Association will pursue liquefied natural gas imports if Cook Inlet supply falls short, CEO Arthur Miller told members Thursday. The utility serves nearly 89,000 member-owners across Anchorage and the northern Kenai Peninsula, with about 80 percent of its generation running on natural gas.

The Hilcorp Alaska contract covering 40 percent of Chugach's gas needs expires in early 2028. The Beluga River Unit, which supplies the rest, reaches end of economic life by 2035.

"We support in-state gas development," Miller said. "But if no in-state supply options exist or are available, then we will pursue importing liquefied natural gas. Not having gas available in 2028, 2029 is not an option for Chugach."

Strong Beluga River Unit production has pushed the supply deadline to early 2029 and saved members more than $149 million in fuel costs since 2016. In the near term, Chugach has entered banking arrangements with Marathon Petroleum Company and Hilcorp, resulting in about 75 percent of a year's worth of natural gas supply already stored or banked for future use. The utility is also investigating additional storage capacity on the west side of Cook Inlet as part of its long-term fuel strategy.