Kenai Peninsula Borough to intervene in Enstar rate case

Apr 17, 2019

Credit Courtesy of Enstar

On Tuesday, the Kenai Peninsula Borough Assembly gave the borough administration permission to intervene in a case before the Regulatory Commission of Alaska, which regulates utilities throughout the state.

The case centers around Enstar Natural Gas’ plan to restructure how a surcharge on Homer area customers’ bills is paying back the gas company for its contribution toward a 2013 project extending natural gas south of Anchor Point.  

The state funded most of the gas line extension, but Enstar invested $3.6 million, more than it originally estimated when it presented the details of the project to Homer city officials and state regulators. Regulators also allowed the utility to collect interest on its investment. Now, because of what Enstar is calling an underestimate of consumption, customers owe over $5 million with interest.

Enstar wants to modify how the current surcharge, which costs the average household $90 per year, pays back the accrued interest and its principal investment in the project. Enstar says the plan would allow customers to eliminate the debt over the next 30 years, but city and borough officials fear customers would pay the current surcharge indefinitely under the plan.

The regulatory commission will hear testimony from interveners through the summer and is due to hold a public hearing later this summer before it provides its final ruling on Nov. 3.