Our local Anchorage natgas utility has scheduled a whopping 30% price increase effective in January. The nightly TV news covered a public hearing on this today, and people were really complaining loudly...
Enstar to raise prices by 30 percent
HIGH COSTS: The natural gas utility won't make any more profit from the boost.
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By RICHARD RICHTMYER
Anchorage Daily News
Published: November 4, 2006
Last Modified: November 4, 2006 at 01:39 AM
The cost of keeping warm this winter is about to go up.
Enstar Natural Gas Co., Southcentral Alaska's dominant natural gas utility, plans to charge residential customers 30 percent more for bills received staring in January.
The increase will add about $30 a month to the average household's gas bill, said Curtis Thayer, a spokesman for the Anchorage-based company.
Small-business customers will see a 29 percent increase, and large-business customers' gas bills will go up 31 percent, Enstar announced Friday.
Enstar will not make any more profit from the price boosts; it is only passing along its increasing costs, Thayer said.
All of the gas Enstar sells is produced in Alaska, but its wholesale contracts with natural gas producers tie prices to the price of oil or to the three-year average of natural gas prices set at a Lower 48 pipeline crossroads in Louisiana called Henry Hub.
Enstar adjusts its rates once a year to account for the price changes in its supply contracts. State regulators must approve the increase.
The new rates are based on $73-a-barrel oil -- compared with $59 a barrel for the current rates -- and the Henry Hub average still includes the price peaks last year caused by Hurricane Katrina, Thayer said.
Enstar's price hike is the latest in a series of double-digit increases in area natural-gas bills. But the increases aren't necessarily good for the gas company, Thayer said.
That's because Enstar's prices are composed of two main components: the wholesale cost of the gas plus a small regulatory charge, and Enstar's charge for delivering it, he said.
Enstar's delivery charge has remained at $1.70 per thousand cubic feet, while all of the recent increases have been in the cost of the gas, Thayer said.
The company makes all its profits from the delivery charges. When gas prices rise, consumers tend to use less and Enstar's profits sag, Thayer said.
"It hurts us just like it does our customers," he said.
If customers have trouble absorbing the price increase, Enstar encourages them to call the utility's credit department, which can help by connecting them with government agencies that offer home-heating assistance or by spreading out their fuel costs evenly over 12 months so as to avoid disproportionately large payments in winter, Thayer said. |
