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Enstar drops controversial tariff changes Gas producers urge Regulatory Commission of Alaska to go ahead with investigation of ‘discriminatory’ conduct; panel declines Wesley Loy For Petroleum News
The ruckus over controversial tariff revisions proposed by Enstar Natural Gas Co. appears to be done.
That’s because Enstar has withdrawn the revisions, which were pending before the Regulatory Commission of Alaska.
Enstar is the state’s top gas utility.
The company ignited a backlash after proposing, in late 2013, certain changes including a requirement for commercial customers to provide a year’s advance notice when leaving or returning to Enstar for gas.
Among the objectors were gas producers including Cook Inlet Energy LLC and Aurora Gas LLC.
They argued Enstar’s proposed tariff revisions were anticompetitive, serving as a barrier to companies trying to market gas directly to customers via Enstar’s distribution lines.
Market stifling alleged Attorney Robin Brena, representing Cook Inlet Energy and Aurora Gas, on July 18 filed an opposition to Enstar’s motion to withdraw its proposed tariff revisions.
Brena urged the commission to continue its investigation of the important public policy and regulatory issues the revisions raised. He noted his clients had expended a lot of effort toward a scheduled Aug. 18 hearing on the matter.
Enstar has taken “multiple unilateral steps to discriminate, restrict, or eliminate the existing embryonic marketplace for Cook Inlet natural gas,” Brena wrote.
As an example, he said, Enstar is blocking the entry of third-party suppliers by requiring expensive meters for their customers, at $6,000 to $8,000 per installation, while not requiring such meters for Enstar’s own customers.
“Apparently, Enstar would like to continue with its domination of the Cook Inlet natural gas market and would not like its actions reviewed by this commission,” Brena wrote. “While it is understandable that a monopoly would act to prevent regulatory review, this commission should not permit the monopoly to avoid this commission’s investigation and determinations on the important issues pending in this docket.
Brena added: “By continuing this docket, the commission will complete a much-needed review into the ongoing and damaging efforts by Enstar to continue to stifle gas market activity.”
Enstar explains withdrawal Enstar, in its own filings with the commission, addressed what it called “hyperbolic allegations” of anticompetitive motives.
“Enstar does not profit from selling gas and its revenues are unaffected by third-party gas sales,” the company wrote. “Enstar earns its returns from transporting, not selling, natural gas. … Because CIE/Aurora do not have their own distribution system, they are Enstar’s customers, not its competitors.”
The company, in a July 8 motion to withdraw, laid out its rationale for dropping the proposed tariff revisions.
“Enstar believes the issues raised by its tariff filings remain important, but that pursuing these changes at this time is not necessary and potentially counterproductive. While Enstar believes some form of increased notice for departing and returning customers is necessary, both administratively and to ensure costs caused by the switching customer are borne by the switching customer, the Cook Inlet gas market is currently in a state of flux. Delaying these changes now will allow the market to continue to evolve, and thus allow Enstar the opportunity to craft notice provisions that reflect the changed market conditions and that may be more agreeable to all affected parties.”
As for metering, the gas utility said: “Enstar is in the process of evaluating and testing new telemetry technology and it is very possible that within one or two years, the … disagreement over technology may be moot. Put another way, it is possible that in the near future, Enstar’s required telemetry technology may no longer be objectionable to alternative suppliers.”
Commission’s decision The regulatory commission, with an Aug. 12 order, granted Enstar’s motion to withdraw its tariff revisions, and closed the docket (U-14-010).
“The proposed tariff revisions were not implemented on an interim basis so no customers are receiving service under the revisions proposed in the filings,” the order said. “We do not believe that Enstar should be required to defend as reasonable proposed tariff revisions that it no longer supports. For these reasons, we grant Enstar’s motion to withdraw and terminate this proceeding.”
The decision may be appealed.
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