Regulators approve ENSTAR plan to borrow MEA's gas to shore up winter storage

Southcentral Alaska's gas utility will borrow about 1.2 billion cubic feet of gas this winter to help refill its storage, after the Regulatory Commission of Alaska approved the deal Friday.

ENSTAR Natural Gas will take the gas from Hilcorp and pay it back to Matanuska Electric Association by March 31, 2028. The utility had asked regulators to fast-track the deal last month.

Without the deal, the utility projected its stored gas would drop to about 3.7 billion cubic feet by Dec. 31, below the 6 billion to 7 billion it usually aims to have at that point in winter, according to its filing. Hilcorp is to deliver the gas by Dec. 15.

The utility's roughly 157,000 customers will pay for it through the gas cost surcharge on their bills, under the commission's notice. Customers would later get a credit when the gas is returned.

The utility pays Hilcorp $11.75 per thousand cubic feet: $9 for the gas and a $2.75 fee. MEA pays $9 for the payback gas. The agreement says MEA should end up no worse off.

MEA said in September it had lined up all the gas it needs this winter. It can also switch its Eklutna Generation Station to diesel to save gas, with ENSTAR covering the extra diesel cost if it asks for the switch.

The commission received one public comment, a letter of support from Homer Electric Association, one of the utility's gas customers.