ENSTAR expands operations South: Homer and Kachemak City prepare for natural gas.

• Author: Orr, Vanessa
• Position: SPECIAL SECTION: Energy & Power

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How much is too much to pay to heat your family's home? For residents of Homer and Kachemak City, costs can range among an average of $383 per month for fuel oil, $586 for electricity, or $706 for propane. Starting next year, however, much bigger savings are in store as the two communities finally get access to natural gas from ENSTAR Natural Gas Company.

"The City of Homer has been trying to get natural gas for decades," explains City Manager Walt Wrede. "We were in ENSTAR's service area, but it simply didn't pencil out from a company point of view; it would take them too long to recoup their investment."

However, when natural gas was discovered about four years ago on North Fork Road, not far from Anchor Point, things took a different turn. With a source of gas much closer to the city, Alaska State Legislators Senator Gary Stevens and Representative Paul Seaton put money in the state budget with the goal of bringing natural gas to Homer.

"The first year, the governor vetoed most of the money, but provided a $525,000 grant to build a pressure reducing station in Anchor Point and 3,200 feet of line toward Homer," Wrede says. "The next year, the governor vetoed all of the money in the budget, but last year, we were able to get it through."

Trunk Line Construction

According to John Sims, director of business development for ENSTAR, the trunk line--which is the line that will bring gas into the community running from Anchor Point to the terminus of Kachemak City--will cost about $10.7 million. "The state of Alaska has provided an $8.1 million grant, which will leave approximately $2.55 million as ENSTAR's investment," he explains. This amount will be paid off gradually by customers, with ENSTAR expecting to recoup its outlay in roughly ten years.

"Before we could move forward, we had to come up with an acceptable plan that would ensure that Homer residents had 'skin in the game,'" Wrede says. "Once it was agreed that residents would pay the remaining 25 percent of the cost through a $1/mcf tariff, it really spurred the project on." Construction on the trunk line began in March and is expected to be completed this fall.

Distribution System Next

Once the trunk line is complete, work will begin on the main extension--the distribution system that will bring gas to the streets and rights-of-way in Homer--a process that is expected to take about two years. In September 2012, the Homer City Council adopted Resolution 12-069...