Southcentral Alaska’s largest natural gas utility is asking state regulators to reconsider their decision on a project that would’ve expanded natural gas storage. That’s after the Regulatory Commission of Alaska denied Enstar’s request earlier this month, saying the utility had not provided sufficient information.
Enstar president John Sims said they’ve been working on this project for more than a year.“This reservoir is almost perfect for what Enstar views as short term and long term needs,” Sims said.
Enstar proposed developing and operating a depleted reservoir in Kenai currently leased and operated by AIX Energy, LLC. to store supplies to use during the colder months.
In a 31-page petition filed Thursday, Enstar said the commission's order was “erroneous and suffers from a lack of true understanding of the nature of the problem.”
The project, known as the Kenai Loop Pool, is the only viable commercial storage option in Cook Inlet, the petition said. The utility has to secure more gas storage to continue meeting the needs of its more than 150,000 Southcentral customers, and the petition said storage becomes “critical” starting next year.
The petition said the project can’t move forward without RCA approval. The project’s estimated $240 million price tag would be the largest single capital investment in the utility’s history, the petition said.
As far as gas supply in general, Sims said he’s stressed about this winter.
“There’s a lot of planning going on for this upcoming winter about what happens if we have a gas supply issue, because we’re worried,” Sims said.
Utilities are looking to import natural gas in the coming years, which would increase prices for thousands of households and businesses. If Enstar doesn’t receive RCA approval, the petition said the utility won’t be able to support LNG imports or a pipeline from the North Slope, although it’s not clear if, or when, a proposed LNG megaproject will be built.
Enstar’s storage project has support from the Alaska Department of Natural Resources, several regional electric utilities and various state legislators, according to the petition.
The RCA has 30 days to respond to the petition, and if they don’t take any action, it’ll be automatically denied.
