Natural Gas Service to Homer August 14, 2006

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Natural Gas Service to HomerAugust 14, 2006
Presentation by Curtis Thayer Charley
Hernandez ENSTAR Natural Gas Company
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Who We Are ENSTAR Facts

• Established 1961
• Number of Alaskans Served - 340,000
• Number of Meters 125,000
• Miles of Distribution Mains and Transmission
  Mains 3,000
• Direct Impact on Alaskas Economy - 300 mil
• Number of ENSTAR Employees 168
• Rank among Alaskan energy Utilities 1
• New Customers in 2005 4,213

120,000 Meters x 2.7 Alaskan Consumers per Meter
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Alaska Pipeline Company (APC)

• Engineering/Construction
• 45 Years of Experience in Alaska
• Constructed and Operates 450 miles of
  Transmission Mains
• Represents 75 of all gas transmission pipeline
  in Alaska
• Expertise
• Compression Plant Engineering Construction
• Pipeline Engineering
• Environmental/Permitting
• Construction/Construction Management

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Natural Gas Transmission Pipelines
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Utilities Number of Meters
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Alaska Natural Gas Usage by
South Central Alaska Natural Gas Study,
Prepared for US Dept of Energy, June 2004
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Transportation Customers
Industrial
Commercial

• Agrium
• Chugach Electric Assoc
• ConocoPhillips LNG Plant
• Municipal Light Power
• Northern Eclipse Fairbanks Natural Gas
• Tesoro Refinery

• AK Native Medical Center
• Anch School District
• Dimond Center
• Municipality of Anchorage
• Providence Hospital
• State of Alaska
• Stevens Intl Airport
• University of AK Anch
• Dept. of Defense
• Ft. Richardson Elmendorf Air Force Base

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Gas SupplyNovember 2005 Outlook
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Cook Inlet Gas Consumers

• 473,000 electricity consumers from Homer
  to Fairbanks
• 67 of electricity generated by natural gas
• 15 hydropower
• 13 fuel
• 5 coal
• 340,000 natural gas consumers

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Residential Gas Cost-By Region As of June, 2006
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Residential Costs-By RegionNatural Gas Cost
(/Mcf)
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Fuel Substitution Summer Winter Peak Cost to
Consumer
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Comparative Fuels in Homer Current Heating Profile
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Comparative Fuels in Homer Potential Economic Boom
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2002 The North Fork Proposal

• Northstar Energy ENSTAR negotiate Gas Supply
  Agreement (GSA) that requires developing 20 year
  uninterruptible supply of natural gas
• Premised on high pressure line to Anchor Point
  hub w/ connections north to KKPL south to Homer
• Regulatory Commission of Alaska approves GSA
  March, 2004
• Northstar writes to ENSTAR explaining that they
  cannot fulfill contract in July, 2006

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2006 Thinking Outside the Box

• ENSTAR
• Connect KKPL to Red Well (Chevron) with 4 high
  pressure transmission line
• Red Well
• North to KKPL
• South to Homer
• Encourage new development in the area
• Encourage Northstar with new infrastructure

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Connecting Homer to Utility Natural Gas

• Supply
• Economics
• Transmission
• Distribution Systems

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Exploration and Development Producers

• Companies actively exploring for Natural Gas
• Chevron (Unocal)
• Marathon Oil Company
• Aurora Gas
• Forest Oil Company
• Companies developing plans to explore for Natural
  Gas
• Escopeta Oil Company
• Northstar Energy
• Storm Cat Energy

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Homer Analysis

• Homer Service Area
• 2,480 Residential structures
• 415 Commercial structures
• 92 Institutional structures
• 1 Industrial structure
• 138 Accessory Buildings

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Homer Analysis

• Estimated Distribution Main Line Requirements
• 74 miles of 2 inch main
• 6 Miles of 4 inch main
• 15 Miles of 6 inch main
• 7 Miles of 8 inch main
• Total Estimated Costs for Distribution Main Lines
  
• 14,000,000
• Total Estimated Costs for Transmission Lines
• 16,000,000

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Homer Analysis

• Proposed Plan for Serving Homer
• Year 1
• Serve Town Center
• Year 2
• Serve West Hill Road, East End Road East Hill
  Road
• Year 3
• Serve Katchemak Drive, West Diamond Ridge,
  Sterling Hwy Corridor Spit
• Year 4
• Serve East of Katchemak Gear

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Transmission System Time LinePerfect World
Example
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Distribution System Time Line (Dependent on
Transmission line Completion)
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Homer Challenges

• Numerous road bores due to developed areas
• Pavement concrete cuts
• Landscaping repairs
• Numerous area with ground and surface water
• Challenging ROWs (steep and narrow)
• Poor soil conditions

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What will it take?

• Progressive rate making
• Railbelt Energy Fund
• State General Fund
• Connection to South-Central Grid
• AIDA
• CIAC

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Now is the time to focus on responsible resource
development with the appropriate urgency to
ensure low cost energy for this and future
generations