It is getting colder, energy bills are costing more and the holidays are coming. Alaska families are trying to figure out how to make it all work. My family is no exception. We decided to become proactive and brainstorm solutions that will help cut costs. I want to share the pros and cons of our efforts so far.
In the interest of energy efficiency, we decided to invest our Permanent Funds and the extra $1,200 in replacing all of the windows. My husband replaced the roof this summer and a new boiler is on the horizon. The new roof has already made a huge difference in the warmth of our home. We're hoping the windows and new boiler will help also reduce overall expenses. I'll keep you posted on the progress.
Since we are making all of these changes, we decided to take part in the AHFC Home Energy Rebate program. As a heads up, we have been on the list since June and didn't get an appointment from an energy rater until the end of November, and that is just for the first efficiency rating. After the appointment in November, we'll have to go back on the wait list for a second energy rating, which is likely to take several months. It is not a quick process and I don't anticipate a rebate for quite some time. I'll keep you posted on that process as well.
Finally, upon hearing about ENSTAR's rate hike, I decided to get involved. I learned it is up to the Alaska Regulatory Commission to approve the 20 percent increase and the decision is expected within the next two weeks. I've written about the increase in this blog and posted a news release from Senator Bill Wielechowski who is opposed to ENSTAR's changes. I wrote to the company voicing my concerns as a consumer and got a comprehensive response. There is good information in the response that I want to share:
Dear Gina,
I would like to thank you for expressing your concerns regarding the recent increase of your natural gas bill. I share your concern; no one wants costs to increase. ENSTAR Natural Gas Company does not make any money on the increased cost of gas.
On your monthly gas bill there are two major components: the ENSTAR delivery/transportation charge and the cost-of-gas portion for the amount of gas used. Since 1998, the overall price ENSTAR charges for delivery/transportation has decreased. The decrease in our transport charge has accompanied a reduction in the average use by our customers over the same period. As a result, the amount ENSTAR collected from our customers, on average, declined from $344 in 1998 to $287 in 2008. Since 1998, the charge for the cost of gas has gone from $1.85 per Mcf (thousand cubic feet) to an estimated $8.81 Mcf. The amount our average customer paid for the commodity went from $331 to $1489 over the same period. This amount goes entirely to the gas producers, not to ENSTAR. We anticipate, with the higher price in 2009 and with customers taking conservation measures, this trend will continue.
ENSTAR receives its income from the delivery/transportation of the natural gas through our pipeline system in the form of a customer charge and a distribution charge based on volume of gas consumed. ENSTAR’s portion of the bill is regulated by the Regulatory Commission of Alaska. This component of your gas bill remained unchanged from 1987 to 2002, then decreased in both 2002 and 2003, and has remained unchanged since 2003. When gas prices increase as they have for the past several years, customers use less gas as a result of energy conservation, and this directly reduces ENSTAR profits, contrary to customer and public perception.
ENSTAR adjusts bills once a year, taking effect in January, which are directly linked to the gas supply contracts it has with the producers. The natural gas prices are negotiated through long-term contracts with producers of Cook Inlet natural gas. ENSTAR has no influence upon this market and receives no profit from price increases. It is actually in ENSTAR’s best interest, financially and otherwise, to keep the cost of gas as low as possible.
Cook Inlet is the main gas supply basin for all of South Central Alaska natural gas needs. ENSTAR enters into long-term contracts with various producers in Cook Inlet with three driving principles:
1) Assure a safe and reliable supply of natural gas for our customers.
2) Achieve the lowest price possible for our customers.
3) Encourage exploration, thereby increasing the natural gas reserves.
ENSTAR Natural Gas Company has a long-term commitment to South Central Alaska. It is a corporate goal of ENSTAR to seek the most cost-effective delivery of natural gas to our customers and to participate fully in providing value to the communities we serve. While no increase is ever greeted with enthusiasm, natural gas remains both cost effective and environmentally friendly compared to other energy sources. When compared to electricity, it is four to five times more cost effective. It produces half as much greenhouse gas as coal and almost a third less than oil for the same amount of energy.
We encourage our customers to contact us if they are having trouble paying their heating bills. There are several programs that can assist them, such as the State of Alaska Heating Assistance program (1-800-470-3058) or a local weatherization program (Anchorage & Eagle River 343-6630 or Mat-Su & Kenai Peninsula 1-800-478-8080 ext 100). We also offer a budget billing program which will average your past usage and allow you to pay a level amount each month.
ENSTAR’s corporate positioning statement is “All Our Energy Goes Into Our Customers.” That is true today and it remains true as we continue to advocate for low cost natural gas supplies for Alaska consumers.
For more information, visit www.enstarnaturalgas.com
