Editor’s note: This is part two in a series of stories examining the challenges of extending natural gas service on the Kenai Peninsula.
By Jenny Neyman
Sometimes, saving money isn’t cheap.
That’s the case when it comes to accessing natural gas service on much of the Kenai Peninsula. Even with Enstar rates increasing, natural gas still is a desirable way to heat homes and power appliances, being cheaper than electricity, fuel oil or propane, and cleaner and more convenient than wood stoves.
For those who live in residences already hooked up to natural gas, enjoying those savings is as easy as setting the thermostat, and requires as much thought or effort as tossing a load of laundry in the dryer and pushing the “on” button.
As with many things in real estate, natural gas service on the Kenai Peninsula comes down to location, location, location. Some have it — primarily in cities, with some other subdivisions sprinkled here and there in more rural areas — while many in rural areas don’t. Going from the latter category to the former can involve a long, time-consuming and expensive process that gets increasingly more costly as time goes on.
For the sake of utility, an existing homeowner wanting natural gas service, or a builder or buyer in an area not already hooked up to gas, might do better to just move to where service already exists, rather than trying to extend natural gas to their location. But for those determined, monthly bill-watching souls who want the same access to cost-saving heating that urban residents enjoy, they can roll up their sleeves, dip into their pocketbooks and get to work. They’ll need:
- An aptitude for paperwork, hoop jumping, “i” dotting, “t” crossing and navigating governmental channels.
- A positive relationship with many, many neighbors (keep this in mind the next time Fido from down the street digs in the garden, or the area snowmachiners decide that others’ driveways make great thoroughfares).
- While they’re at it, they should get to know their political representatives, both on the Kenai Peninsula Borough Assembly and in the Legislature.
- Money. Potentially lots and lots of it.
- Luck to be in the right place, at the right time (that time would be four or five years ago, so a time machine wouldn’t hurt).
There are a few basic ground rules to keep in mind when considering natural gas service extensions. One is that the projects aren’t cheap, and the costs of materials and labor increase over time. An average price for installing a natural gas service line to a subdivision about 15 years ago was around $9 or $10 per foot. In 2009, Enstar’s construction rate for 2-inch pipe was $14.81 per foot, and the price for 4-inch pipe was $21.24 per foot.
“The cost of business has gone up and our price is adjusted annually,” said Charlie Pierce, southern division manager with Enstar.
The farther away a project is, the higher the construction cost, and the higher the risk of other factors getting in the way that will increase costs even more — such as crossing roads and wetlands. If a project involves other agencies and entities — such as the Environmental Protection Agency requiring a Stormwater Pollution Prevention Plan, or Enstar needing to negotiate with pipeline owners to tap their lines, which then has to be approved by the Regulatory Commission of Alaska. All that takes additional work and time, which, as the saying goes, is money.
Proximity to a gas line doesn’t necessarily mean a service extension project won’t involve great distances and be cheap. What matters more is living near a pipeline access point. The natural gas distribution system on the Kenai Peninsula consists primarily of high-pressure transmission lines, requiring a pressure-reducing station to be able to take natural gas out of the lines for residential use.
A reg station, as it’s called, costs $250,000 to $300,000. In areas where Enstar expects future growth to result in a significant increase in customers, like Girdwood, the company has installed pressure-reducing stations of its own accord.
“Some of them are borne by the company, some borne by consumers. Some areas we would install one based on future load, in areas like Kasilof, though, you don’t have significant growth,” said John Sims, manager of corporate communications for Enstar. Continue reading