Enstar customers: Keep calm and carry on

Headlines and recent reporting about local natural gas prices have sparked concern among local consumers. If you are among that group of Enstar customers worried about paying your bill this winter, we think we have good news for you.

A lot of reporting has focused on one number — 48 percent. That’s the increase between the second-quarter 2014 and the third-quarter 2014 gas cost adjustment. While that number is large and certainly terrifying, it only tells part of the story.

The real percentage increase on an annual basis will be 7.7 percent. That’s higher than the last increase (3.3 percent between 2013 and 2014), but ratepayers should not expect their Enstar bills to double in cost as a result.

Another number to consider: 41 percent, which is the amount gas prices declined between the first quarter of 2014 and the second quarter 2014, a figure obscured by a lot of the breathless reporting on the subject by other news outlets.

Quarterly increases were invisible to ratepayers as recently as three years ago. That’s because prior to 2010 the gas cost adjustment was set on an annual basis. If Enstar had erred in its estimation of gas prices, consumption, or temperatures at that point, a slightly higher annual rate would have made up the difference. Change would have been gradual, prices would have been more consistent, generally easier to plan around, and more conducive to economic growth. Instead, quarterly changes, while stable at first, have led to a 2014 gripped by uncertainty.

What the system needs is consistency for consumers and businesses, both for Enstar itself, as well as for local businesses reliant on natural gas. So we look forward to hearing their proposals to the Regulatory Commission of Alaska on Aug. 13.

One suggestion we would make would be to return the price adjustments to an annual basis, which, while potentially less profitable for Enstar, would free consumers from the potential shock of the short-term view.

While panic isn’t warranted here, Enstar, like most utilities, is still a monopoly that has extraordinary power over the lives of not only Mat Su residents, but residents across Southcentral Alaska. Although Enstar cannot act without the approval of the RCA, officials and consumers at the local, state and federal level should watch each move with caution.

If the quarterly increase is emblematic of rates to come, economic growth in our region also could be hampered by such large, unpredictable rate swings.

While gas rates may not double this year, it will cost ratepayers more for natural gas this winter. Rather than panic, this rate change should be a catalyst for each of us to invest in further winterizing our homes to reduce the amount of fuel needed to keep our families snug and warm, whether we rely on wood, coal, fuel oil or natural gas.