By SUZANNE DOWNING
Residents across Southcentral Alaska are seeing higher natural gas bills this winter, and in addition to the wicked weather that this winter has brought — 30% colder than normal, and the increasing cost of natural gas, some of the increase traces back to a major rate case now working its way through state regulators.
In May 2025, Enstar Natural Gas, the primary natural gas utility serving more than 155,000 customers in Anchorage, Mat-Su, Kenai, and surrounding communities, filed a request with the Regulatory Commission of Alaska seeking a significant increase in its base delivery rates.
Enstar’s filing, known as tariff advice TA354-4, requests a 26.79% permanent increase in base rates, often rounded to 27%. These base rates cover the cost of delivering gas to homes and businesses, maintaining pipelines, meters, safety systems, and customer service. It’s not just the cost of the gas itself.
Because delivery charges make up only about 20% of a typical residential bill, the company estimates the overall impact on customers would be far smaller: about a 5.77% increase, or roughly $8.95 more per month for an average residential customer.
For typical General Service 1 (G1) customers, the proposed permanent rates would raise the monthly customer charge from $16.25 to $21.00, and increase the base service charge from $0.14982 to $0.18662 per hundred cubic feet (Ccf).
While the permanent request is still under review, the RCA allowed Enstar to implement a refundable interim increase while the case is pending. That interim increase, 23.21% on base rates, took effect July 1, 2025, translating to about a 5% overall bill increase.
Under the interim rates, the monthly customer charge rose to $20, and the base service charge increased to $0.18459 per Ccf.
If regulators ultimately approve a smaller increase, customers could receive refunds for any overcollection.
The RCA issued public notice on May 5, and formally suspended the filing for detailed review; this is a standard process that can take 18 months to two years. As of January 2026, the docket remains open and suspended through July 24 of this year, meaning no final decision has yet been made on permanent rates.
Enstar says it has been under-earning since its last rate case in 2021 due to rising costs and major infrastructure investments. The company reports spending more than $127 million on system upgrades and safety improvements, including pipeline valve replacements and corrosion mitigation, replacement of aging steel mains and services, including 26,000 feet in Kenai in 2024, and transmission extensions to support growth and reliability, such as the Seward Meridian Parkway project in Mat-Su.
The utility also cites 11.8% inflation in Alaska between 2022 and 2024, along with higher labor, healthcare, cybersecurity, and federal pipeline safety compliance costs.
Even with the requested increase, Enstar says its residential delivery cost would average $3.67 per Mcf, well below the national average of $13.14 per Mcf for delivery charges alone. That comparison excludes the cost of the gas itself, which varies by market and contract.
The base-rate case is separate from gas supply charges, which are handled through Enstar’s Gas Cost Adjustment.
In May, Enstar also filed a separate GCA proposal (TA355-4) seeking an 11.4% increase in gas supply costs, from $9.0716 to $10.1091 per Mcf. Regulators suspended that filing in June, amid concerns tied to a contract involving Homer Electric Association, which needed gas and could find no alternative vendors, and it is now under review in a separate RCA docket. A final order on that issue is expected by Feb. 9.
For now, the cost of gas is the main reason for the increase.
Southcentral customers are paying the interim base-rate increase, while the permanent rate request and the gas cost adjustment remain unresolved. The RCA’s final decisions—still months away—will determine whether current charges remain in place, are reduced with refunds, or are adjusted further.
In short, today’s higher bills reflect a combination of infrastructure spending, inflation, and regulatory timing. It’s not a single overnight change and the final outcome is still in the hands of state regulators.
5 thoughts on “Natural gas bills are rising in Southcentral Alaska: An explainer”
If inflated gas prices are a foregone conclusion, remind again why the average south central working stiff should care about a gasline boondoggle?
Probably(?!?!?), the SOA should’ve built the Susitna-Watana Dam! Maybe(?), we should’ve put the Healy Clean Coal Plant online too! Instead, CEA and MEA built two 185MW Natural Gas guzzling power plants! Those two power plants consume a lot of Enstar Natural Gas that could be feeding residential small commercial demand.
Just wait until you have a $30B Glenfarne pipeline to pay off with no big LNG plant at the end. That will be fun.
Many of us Alaskans, those of us who appreciate developing our State and harvesting our natural resources, are anxiously looking for not only the LNG project to come to fruition but, many other resource development and infrastructure projects too … A true ‘Golden Age’ for AK907!!! The economic benefits, both for local businesses and personally, will bring about a fantastic plethora of opportunities that will no doubt pay dividends for multiple generations.
There is already an LNG glut, and AKLNG is the least economic of any of the large LNG projects currently in the planning phase. Just ask Wood Mackenzie. Investors realize those facts, and that’s why this project has remained stalled for decades. Of course many Alaskans are in favor of the project, but if they had to risk their own money under these circumstances, their views would change.