AIDEA gives notice of Fairbanks gas rates

As part of its procedure for approving natural gas rates for Fairbanks gas consumers, on Jan. 4 the Alaska Industrial Development and Export Authority issued a public notice announcing gas utility Fairbanks Natural Gas’s proposed rate structure for 2016. Members of the public have until Feb. 4 to comment on the rates.

At the end of September AIDEA completed its purchase of Pentex Natural Gas Co., owner of Fairbanks Natural Gas, as part of the Interior Energy Project, a project to bring affordable energy to Fairbanks. Because AIDEA is a government agency and not a privately owned utility, the AIDEA board rather than the Regulatory Commission of Alaska now regulates Fairbanks Natural Gas. Hence the Jan.4 public notice.

Pentex had announced its proposed Fairbanks gas rates to the AIDEA board during the board’s Dec. 3 meeting. The proposed rates went into effect on an interim basis on Jan. 1, but are subject to potential adjustment, depending on the outcome of the rate-setting process that is now underway. AIDEA says that its board will set permanent gas rates during its March 3 board meeting.

Under public ownership, with factors such as relatively low borrowing and regulatory costs, Pentex is able to offer gas in Fairbanks at lower prices than previously, when Pentex was privately owned - on average, under the proposed rate structure, rates would drop by 10.4 percent. Residential rates would drop by 13.5 percent from $23.35 to $20.20 per thousand cubic feet, with commercial and interruptible rates falling by smaller percentages from lower levels.

- ALAN BAILEY