Enstar explanation confusing

To the editor:

Is anybody else as confused as I am? Here is the statement on Enstar’s website regarding the recent rate increase:

“Why are prices higher in 2009?

Enstar’s older natural gas contracts with producers are indexed against oil, which saw record prices in the index period. Enstar’s other contracts are indexed on a trailing average of Lower-48 natural gas prices. The high cost and volatility over the past 36 months has raised the average, not only for Alaska customers but for all customers who use natural gas.”

Last month Enstar sent a letter with its bill stating that the average customer would see a 22 percent increase for residential use. This month MEA followed suit, stating that since their power is generated using natural gas, and that price is rising, thus the cost of electricity will rise.

But here’s the thing: Natural gas is not at the same price as it was six years ago. Yes, it has fluctuated up last summer, as oil did. And just as oil did, it has fallen dramatically. So if it’s indexed against oil, it should have come right back down. If it’s indexed on a trailing average, it should drop again in the new future. Anybody think it will?

We are getting screwed on gasoline — the Lower 48 pays $1.60 per gallon on average — and now natural gas.

The current commodity market price is about $4.50 per 10,000 million Btu. Type this link into your Web browser: http://futures.tradingcharts.com/chart/NG/M. It’s easy to see the current price is the lowest it’s been in six years.

So if high cost (last June) and volatility raised the average, why have low cost and current lack of volatility not brought it back down? Same reason cheaper oil has not resulted in correspondingly cheaper gasoline? Why are we once again getting screwed?

Brian Bashaw

Palmer