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Enstar raises gas hookup fee by 4,000%
The Associated Press
Enstar Natural Gas has started charging 4,000 percent more to install gas lines and meters on newly built homes, saying it hasn’t changed the rate in more than 45 years.
The Anchorage-based utility won approval from the Regulatory Commission of Alaska in April to raise the fee to $781 from $20. Builders will have to pay the fee and most will pass it along to home buyers.
The $20 charge, for new homes only, dates back to 1960, said Enstar spokesman Curtis Thayer.
In an April 21 ruling, the commission decided to allow Enstar to start charging the higher fee effective immediately. It found that the $20 payment only covered 1.3 percent of the average total cost of $1,482 for hooking up a new home to gas service.
Giard: New hookups subsidized “In essence, for every new customer that connects to Enstar’s system, the rest of Enstar’s customers subsidize 98.7 percent of installation costs that will directly benefit just that new customer,” wrote RCA chair Kate Giard.
Giard said the new rate reduces the level of subsidy paid by current customers from 98.7 percent to 47.3 percent. Enstar will collect about $2 million this year from the higher installation fees, which “will be reinvested into other areas of the system,” Thayer said.
Builders association objects The Anchorage Home Builders Association called the installation rate hike “exorbitant” in a letter to the commission.
“With new home prices at record highs, the proposed price increases would only exacerbate the problem. Each incremental increase in new home prices serves only to price more buyers out of the market,” wrote executive officer Vicki Portwood.
Portwood said Enstar should have gradually increased the charges over the last 45 years.
“Home builders should not be forced to pay the prices of Enstar’s delay just because it waited almost half a century to seek available relief from the commission,” Portwood wrote.
Cory Bradshaw, director of production for Anchorage builder Hultquist Homes, said his company supports the rate increase because it’s been so long since the price of gas hookups was adjusted.
Of Enstar’s 125,000 customers in Anchorage, Mat-Su and the Kenai Peninsula Borough, about 3,000 new ones will be affected by the installation increase this year, Thayer said.
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