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RCA to investigate Enstar proposals Potential direct gas marketers, buyers call Enstar’s tariff revisions anticompetitive; regulatory commission orders review Wesley Loy For Petroleum News
The Regulatory Commission of Alaska says controversial tariff changes sought by Enstar Natural Gas Co. need a closer look.
The RCA, which regulates utilities, on Feb. 3 issued an order for “further investigation,” and appointed an administrative law judge to help manage the case (docket No. U-14-010).
The commission also invited petitions for intervention in the matter. One company, Matanuska Electric Association, filed a petition on Feb. 11.
Enstar, based in Anchorage, is the main gas utility for Southcentral Alaska.
The company sparked a backlash in late November, when it first filed with the RCA for tariff revisions.
One of the changes Enstar wants could discourage customers from dealing with direct gas marketers. These direct marketers would deliver their gas over Enstar’s distribution system.
Enstar wants to require customers switching to a direct gas marketer, or back to Enstar, to give at least a one-year notice.
Customers failing to give that notice, and who choose to switch back to Enstar for gas supply, might have to pay higher prices as a result.
Enstar says the one-year notice is needed to smooth out the “unpredictable coming and going” of customers, which can disrupt the utility’s supply contracts and add cost to its existing customer base.
Several lodge criticism Enstar appeared to seek the tariff changes after an oil and gas producer, Cook Inlet Energy LLC, made plans to market gas directly to commercial users. It identified O’Malley Sports Complex in Anchorage as its first customer.
Cook Inlet Energy and a number of other firms have attacked Enstar’s requested changes as an effort to squash competition. Other firms lodging critical comments with the RCA include Aurora Power, BlueCrest Energy and Homer Electric Association.
Cook Inlet Energy, in a formal protest filed Jan. 23, argued Enstar has a monopoly on gas distribution facilities and “an unqualified duty” to transport gas sold by alternative suppliers.
Direct gas marketers have used Enstar’s system in the past, but the business waned as Cook Inlet gas supplies tightened up. The apparent increases in gas supply recently could usher in a new wave of direct marketing as gas producers try to pick off Enstar’s commercial customers.
RCA’s order The regulatory commission, in its Feb. 3 order, didn’t comment on the merits of Enstar’s proposed tariff revisions.
The commission suspended the company’s tariff filings (TA252-4 and TA253-4), noting they “raise a number of issues that require investigation.”
“When a utility’s tariff filing contains a new or revised rate, classification, rule, regulation, or condition of service, we may, upon written complaint or on our own motion and after reasonable notice, suspend the operation of the tariff and conduct hearings to determine the reasonableness and propriety of the filing,” the order said.
The RCA said it would issue a final order no later than Sept. 15.
Chairman T.W. Patch appointed Administrative Law Judge John P. Wood to “facilitate conduct in this docket.”
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