Enstar requests earthquake cost recovery

Alan Bailey

Petroleum News

The Regulatory Commission of Alaska has opened an enquiry into a request by Enstar Natural Gas Co. for approval to recover costs associated with the major November 2018 earthquake. As a consequence of the earthquake, which caused significant damage in the Anchorage region, Enstar incurred about $1.3 million in unanticipated costs, the gas utility told the commission. The utility did carry insurance covering the possibility of earthquake damage. But the insurance policy involves a deductible of $1 million - Enstar wants to true up its earthquake recovery costs, net of insurance, and include these costs in its next rate case, due to be filed on July 1, 2021.

Enstar’s response to the earthquake included bringing in additional personnel to help conduct leak detection and aerial surveys around the utility’s gas infrastructure. The utility also needed personnel to deal with a major uptick in emergency calls and calls from contractors requesting emergency locates. There were 1,600 calls on Enstar’s emergency line and 500 emergency work orders on Nov. 30, the day of the earthquake. Ultimately three earthquake related underground leaks were discovered, although there were no leaks from any gas transmission lines, Enstar told the commission.

The earthquake triggered two significant projects.

The first project involved the assessment and replacement of a transmission line and a distribution line near Vine Road, where there had been ground displacement and associated severe damage to the road. While neither pipeline had leaked as a consequence of the earthquake, both lines had shifted significantly.

The second project involved an inline inspection of the Beluga Pipeline, a major 20-inch diameter transmission pipeline carrying gas from the west side of Cook Inlet. Although Enstar had conducted an aerial survey of this line and had also determined that there was no pressure loss from the line, the federal Pipeline and Hazardous Material Administration had recommended an inline inspection, to detect possible damage such as buckling or dents. A preliminary report from the inspection indicated no damage resulting from the earthquake, Enstar told the commission.

- ALAN BAILEY