Regulators won't decide Hilcorp's gas storage rates for Southcentral until late 2027

Alaska regulators set a schedule Monday for deciding what Hilcorp can charge to store natural gas for Southcentral Alaska. The answer won't come until late next year.

Studies the storage company filed this year found its rates were bringing in about 25% more than its costs plus the profit it's allowed. On Oct. 2, the Regulatory Commission of Alaska cut those rates by as much as 31% while it investigates. Hilcorp had asked to keep charging its old rates for now and refund the difference later, down to the rates it proposed.

Storage helps Southcentral get through winter. Utilities pump gas underground in summer and pull it out when cold weather demands more than Cook Inlet's wells can produce. Hilcorp's storage, in the Kenai Gas Field, is one of the region's two storage fields.

Its customers include Matanuska Electric, Chugach Electric, Marathon Petroleum and Hilcorp's own Cook Inlet gas company. Matanuska Electric said in July that Hilcorp storage fees cost it about $170,000 a month, which members pay through their electric bills. When the cut took effect, it was unclear whether or when it would show up on MEA or Chugach bills.

ENSTAR, Southcentral's gas utility, doesn't store gas there but buys most of its gas from Hilcorp. It wants to join the case, saying storage costs could reach its customers. Hilcorp called that speculative.

As of October, the commission hadn't ruled on whether Hilcorp's old rates were too high. Chugach and Marathon argued that customers could be owed refunds.

Under Monday's schedule, the state attorney general's office, Matanuska Electric, Chugach Electric and Marathon file testimony by March 19, 2027. The hearing starts Aug. 20, 2027, and a final decision is due by Nov. 26, 2027.