CINGSA sets provisional gas storage rates
As part of its recent application for a Regulatory Commission of Alaska certificate for its planned $180 million Kenai gas storage facility, Cook Inlet Natural Gas Storage Alaska has filed preliminary financial data for the facility — CINGSA hopes to put the planned 11 billion-cubic-foot facility into operation in the summer of 2012 in the Cannery Loop gas field on the south side of the city of Kenai, enabling local gas and electricity utilities to warehouse summer gas for use during high winter demand.
The company says that it anticipates charging $9.95 per thousand cubic feet per month for firm storage capacity at the facility, with a fee of 1.6 cents per thousand cubic feet for injecting gas into storage or withdrawing it again. Those rates would likely generate annual revenues ranging from $29 million to $33 million, offset against operating expenses; depreciation of the facility’s capital cost; and federal and state tax liabilities.
And, according to CINGSA’s financial projections, Enstar Natural Gas Co. would use up to 8.5 billion cubic feet of the facility’s capacity. Chugach Electric Association would initially use 2.4 bcf of capacity, with that usage declining to 1.7 bcf after five years, with Municipal Light & Power using 0.5 bcf to 0.6 bcf.
The impact of the gas storage rates on consumers’ gas and electricity bills will presumably depend on what proportion of the utility gas supplies would go through the storage facility. In 2010 Enstar anticipates purchasing a total of 37.5 bcf of gas, according to the company’s gas cost adjustment data.
—Alan Bailey
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