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ML&P buying extra gas for April, May
Anchorage Municipal Light & Power is buying a small amount of natural gas from an independent Cook Inlet producer this spring to meet a two-month supply shortfall.
Under a contract sent to state regulators on April 5, ML&P will buy 3 million cubic feet per day of base volume from Aurora Gas LLC between April 1 and May 31 with the option of buying 4 million to 5 million cubic feet of “additional volume” for up to 10 days during that period.
That base volume represents only about 6 to 8 percent of ML&P’s average daily needs, but is necessary because of a planned maintenance program at the Beluga River gas field.
ML&P owns a third of the production at Beluga River, which is usually enough to meet the 37 million to 45 million cubic feet per day the company needs to meet local demand.
“However, in April and May of this year, ML&P’s access to BRU production will be limited to some extent due to maintenance of the BRU’s compressor facilities, select wells, and select well site facilities,” the company wrote to state regulators.
Short-term premium The short-term contract is priced at a premium.
ML&P will pay $6 per thousand cubic feet for the base volumes and $7.25 per mcf for the additional volumes. ML&P pays around $3.88 per mcf for its current gas supplies.
The utility said it plans to pay this additional cost using funds from an internal account, rather than collecting the difference through an increase to customer electricity rates.
“Given the relatively small volume of Contract gas that will be provided during this short, two-month period, the impact of this higher-priced supplemental gas on ML&P’s overall, long term gas costs will be minimal,” the utility said in a letter to regulators.
ML&P sent the contract to the Regulatory Commission of Alaska for informational purposes. Alaska doesn’t require approval for contracts lasting less than 12 months.
ML&P serves some 30,000 residential and commercial customers in the downtown Anchorage area. The utility is in the process of requesting a permanent rate increase.
Aurora Gas operates five fields on the west side of the Cook Inlet basin.
ConocoPhillips and Chevron, the other owners at Beluga River, will also presumably see lower production rates through the end of May as a result of the maintenance program.
Beluga River has produced more than 1 trillion cubic feet of gas since 1963.
—Eric Lidji
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