NEWS BULLETIN

December 05, 2008 --- Vol 14, No. 111December 2008

RCA opens investigation into Chugach Electric Association gas supplies

The Regulatory Commission of Alaska announced Dec. 4 that it is opening an investigation into the “adequacy and accessibility” of current and future natural gas supplies for Chugach Electric Association Inc., a major electric utility in Anchorage.

Chugach generates more than 90 percent of its electricity from natural gas but has no contracted gas supplies beyond 2011. The utility has been negotiating with gas producers for more than two years but has not yet succeeded in landing new supply contracts. In February Chugach told the commission that it hoped by the end of 2008 to present new contracts for RCA approval, to allow reasonable time for review of the new supply arrangements, RCA said.

The commission also said that evidence presented in a docket relating to the certification of the Beluga pipeline that connects to Chugach’s Beluga power plant on the west side of the Cook Inlet had raised questions over the reliability of Chugach’s short-term gas supplies.

“We find that Chugach may have short-term gas supply problems and, because new gas supply contracts have not yet been filed with us, may have long-term gas supply problems,” RCA said. “We are concerned that, despite Chugach’s efforts to secure new gas supplies at reasonable prices, its negotiations with potential suppliers may not be progressing toward a timely and acceptable conclusion.”

The commission has scheduled a prehearing conference on Dec. 12 to establish a procedural schedule for the investigation — the investigation must be completed by Dec. 4, 2009.


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