Alaska Utility Ordered To Renegotiate Lower Natural Gas Prices With Conoco Phillips, Marathon Oil

Anchorage, AK (AHN) - Alaska residents in the south central part of the state might get a break on their home heating costs this winter thanks to state government intervention.

State regulators ordered the state's largest natural gas utility, Enstar Natural Gas Co., to renegotiate with Conoco Phillips and Marathon Oil the terms of pricing for the natural gas it plans to buy over the next five years.

Those contracts affect only 5 percent of the natural gas that Enstar buys. However, Regulatory Commission of Alaska commissioners have reportedly said that Cook Inlet gas producers Conoco and Marathon effectively had a monopoly over gas supplies there, which gave them too much influence over gas prices.

Regulators reportedly acted in the hope that this will set a precedent for other regional supply contracts of Cook Inlet gas.

The move has the effect of capping gas prices for consumers who had faced significantly higher winter heating prices otherwise.

Enstar had argued that the prices were fair.

Regulators gave the utility until December to renegotiate the pricing terms.