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Fairbanks Natural Gas Seeks Rate Hike, Monthly Fuel-Cost Charge Authorization

Alaska Department of Natural Resources

Fairbanks Natural Gas is asking state regulators to approve a nearly 7 percent rate hike that would take effective in mid-August. FNG’s request is part of the utility’s plan to expand its gas-distribution system in Fairbanks’ core area.

Fairbanks Natural Gas President and CEO Dan Britton says the utility submitted its tariff filing with the Regulatory Commission of Alaska last week to comply with the terms of a deal it reached in 2013 to enable FNG to become a rate-regulated utility.

“The rate case that we just filed was as a result of a stipulation and an agreement between ourselves, the Attorney General and the Fairbanks North Star Borough to become fully rate-regulated,” Britton said. “And the filing that we just filed was to meet the commitment that we made as part of the stipulation to do so.”

Britton says FNG wants to become a regulated utility to qualify for funding to pay for expansion of its system, which serves some 1,100 customers in Fairbanks.

“The transition to full rate regulation, we believe, provides us with access to the lower-cost state programs for the expansion that we’re doing,” he said.

Britton says as he was putting together the plan to transition to a rate-regulated utility, he determined that FNG needed additional revenue. So the company filed on June 30th for a 6.92 percent rate hike that if approved would take effect Aug. 14th.

FNG also is asking the commission to approve a gas-cost adjustment mechanism that would enable the utility to recover costs associated with its gas purchases. Britton says the mechanism would operate much like Golden Valley Electric Association’s monthly fuel-purchase surcharge.

“Yeah, that’s really what it is,” he said. “It’s to account for any changes in the cost of the gas or the energy.”

The commission will accept public comments on FNG’s rate hike proposals through July 25. You can find out more about the rate hike by going to the commission’s website, at rca.alaska.gov.

Tim has worked in the news business for over three decades, mainly as a newspaper reporter and editor in southern Arizona. Tim first came to Alaska with his family in 1967, and grew up in Delta Junction before emigrating to the Lower 48 in 1977 to get a college education and see the world.