ENSTAR Rate Case Overview & FAQs

Overview

On May 2, 2025, ENSTAR filed a rate case with the Regulatory Commission of Alaska, requesting an increase in customer rates as a result of, among other things, critical safety and reliability projects, and the rising cost of materials and services ENSTAR relies upon to maintain its system and serve customers.  If ENSTAR’s request is granted, customers will see gas bills increase by 5.77% per year or approximately $8.95 a month.

How will this affect my bill?

• The filing requests a 5.77% adjustment to the typical residential customers' bill (26.79% excluding the cost of gas), which equates to approximately $8.95 increase per month.  
  • For G1 Customers:
    • The Monthly Customer Charge will go from $16.25 to $21.00.
    • The Base Rate will go from $0.14982 to $0.18662 per Ccf.

• • If approved, the rate increase will go into effect in two steps:
    • Step 1: An interim rate increase of approximately 5.00% will be effective on billings beginning on July 1, 2025.
    • Step 2: Additional 0.77% increase following RCA approval of ENSTAR's filing. Typically, the time between interim and final rates is approximately 18 months.  

But I read the increase was 26%.  Which one is it?

• There are two components to a customer bill.
  • Gas Cost. The largest component of the bill is the cost of the gas a customer uses each month and represents about 80% of the total bill.
  • Customer Charge. Depending on how much gas a customer uses in a month, this charge typically represents around 20% of the customer bill.  This portion covers ENSTAR’s costs to provide service and maintain its pipeline system. In light of the projects listed below and the ongoing investments required to serve customers, ENSTAR is requesting an approximately 26.79% increase to this portion of the bill.
  • The impact to customers is closer to 5% since the customer charge is a small portion of monthly bills.

Why is ENSTAR asking for an increase?

• This increase reflects $127 million of projects and investments that ENSTAR has made in its system since the last rate case which was based on ENSTAR’s costs in 2021. Examples include:
  • A & B Pipeline Repairs and Replacements. These two pipelines transport gas from Kenai north for 70 miles, including a 2-mile subsea crossing of the Cook Inlet, and terminate near Potters Marsh in Anchorage.  The “A-Line” was installed in 1961, and the “B-Line” was installed in 1974. Together, these lines are the primary artery for gas transportation and delivery throughout ENSTAR’s system. Given the advancing age and critical function of these pipelines, ENSTAR continues to invest in projects to maintain their physical integrity and safe and reliable operation. These projects include:
    • MP 30.9 Valve replacement: At Milepost 30.9, A & B-Line valves were buried and difficult to access for maintenance and emergencies. This project brought the valves above ground, increasing accessibility and therefore the safety and reliability of the pipelines.
    • Moose River Exposed B-Line replacement: A portion of the B-Line, originally installed below the bed of the Moose River, became exposed over time and was at risk for damage from ice, debris, and boats. ENSTAR installed 1,000 feet of new pipe below the riverbed. 
    • B-Line Segment K6 Replacement: ENSTAR replaced 2,600 feet of the B-Line that had significant corrosion leading to reliability/safety concerns. This project mitigated those concerns on this pipeline section.

• • Steel Main & Services Replacements: The Kenai area has some of the oldest pipe on ENSTAR’s system. It was originally installed in the 1960’s by the Kenai Utility Service Corporation (“KUSCO”), which ENSTAR acquired in the 1980’s.  In 2024, ENSTAR completed a project to replace 26,000 feet of steel mains and 130 service lines.  ENSTAR plans to continue this work to ensure its system is up to date and safely and reliably provides natural gas to customers’ homes and businesses.

• • Seward Meridian Parkway Transmission Extension: ENSTAR completed this project in coordination with the Alaska Department of Transportation’s federally-funded Seward Meridian Parkway Road Improvement Project. By installing a new distribution system, extending transmission, and constructing a new pressure regulator station, this portion of ENSTAR’s service area has increased reliability and gas pressure. The Mat-Su is located the furthest from gas resources on the Kenai Peninsula. It also experiences the most growth across ENSTAR’s service area.  For this reason, these projects were essential to continue serving the Mat-Su with reliable gas service.

What is a rate case?

• Typically, when a business experiences higher costs, it can simply raise the price of its goods or services without additional oversight or approvals.
• For utilities, such as ENSTAR, when the cost of providing service rises, it must make a filing with the Regulatory Commission of Alaska (“Commission”), detailing how and where costs have increased and provide justification for large projects and expenditures.
• From there, other parties representing utilities, the public, and other interests can join in the rate case and ask ENSTAR for additional documents or information about the filing. This can be a very long and detailed process.
• After all phases of testimony, discovery, and other filings are complete, ENSTAR will proceed to a hearing before the Commission. Much like a legal trial held in a courtroom, this proceeding includes testimony and expert witnesses from each party.  Parties introduce evidence and cross-examine other witnesses.  Similar to a panel of judges, the Commissioners also ask witnesses questions. 
• The final step of the rate case process is the written order from the Commission, which determines how rates and other components of ENSTAR’s filing will be adjusted going forward, in light of all the evidence presented. The time from the initial filing to the final order takes between 18 months and two (2) years to complete.

General Information:

• ENSTAR serves 155,000 customers (or half of the state’s population) with heat and fuel for gas-powered appliances. It also transports gas for electric utilities (Chugach Electric and Matanuska Electric) who require natural gas to generate approximately 80% of electricity for their customers.
• ENSTAR provides natural gas delivery service at one of the lowest costs in the entire country. Following approval of this rate application, the cost of natural gas delivery service (combining the customer charge and the service charge, and excluding gas commodity costs) for residential customers will be $3.67/Mcf vs. the national average of $13.14/Mcf (Energy Information Administration).
• Overall inflation rate was 11.8% from 2022 to 2024.