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NEWS BULLETIN

April 20, 2016 --- Vol. 22, No. 21April 2016

MEA signs new gas supply agreement with Hilcorp

Matanuska Electric Association has signed a new gas supply agreement with Hilcorp Alaska covering the period April 1, 2018, to March 31, 2023, MEA has announced. The gas will fuel MEA's power plant at Eklutna, north of Anchorage. The supply contract, which includes a full supply service covering swings in gas demand levels between summer and winter, has a gas price of $7.55 per thousand cubic feet. That pricing is about 6 percent lower than the 2017 price of $8.03 stipulated in a consent decree negotiated between Hilcorp and the state of Alaska, MEA says.

The new contract, which requires Regulatory Commission of Alaska approval, will cover all of MEA's gas supply needs during the contract's term. However, in the interests of potential supply diversification, the contract includes a provision allowing a one-time reduction by MEA of the contracted gas volumes, if the utility finds alternative gas supplies at lower prices.

The contract also gives priority to gas deliveries for MEA through the pipeline.html'>gas pipeline system on the west side of Cook Inlet and allows any shortfall in MEA's gas usage to be rolled forward from one year to the next.

"We appreciate Hilcorp negotiating an agreement that provides our members with energy stability and certainty while allowing for the flexibility required during these uncertain economic times," said Tony Izzo, MEA general manager. "As someone who has scrutinized gas contracts for many of my 35 years in the utility industry, this agreement represents a very positive step forward for our members."

- ALAN BAILEY

See story in April 24 issue, available Friday, April 22 at www.PetroleumNews.com

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