Purchase of Beluga River Gas Field Approved
RCA issues favorable ruling for Anchorage ratepayers
ANCHORAGE – April 21, 2016 – The Regulatory Commission of Alaska today approved the purchase of ConocoPhillips’ one-third working interest in the Beluga River Unit natural gas field by Municipal Light & Power and Chugach Electric Association.
ML&P and Chugach announced the joint purchase in February, in a deal that is estimated to save the residents of Anchorage millions of dollars and supply a significant portion of the utilities’ gas needs over the next two decades. The final agreement transfers 70 percent ownership of the ConocoPhillips’ interest to ML&P and 30 percent to Chugach. The total purchase price is $152 million.
“I want to thank the RCA for their swift consideration and action. I also want to thank Chugach for working with ML&P and the Municipality to generate long-term savings for families and business in the Anchorage bowl,” stated Mayor Ethan Berkowitz.
ML&P, which is owned by the Municipality of Anchorage, already owns one-third of the Beluga River gas field. After today’s ruling, the utility will now own 56.67 percent of the field.
“ML&P’s initial investment in the Beluga River gas field has saved our ratepayers over $239 million since 1996,” said ML&P General Manager Mark Johnston. “Today’s ruling ensures long-term financial benefits to Anchorage businesses and families.”
“Chugach is grateful to the RCA commissioners and staff for the time and attention they have given this matter, and the quick turnaround of the final decision,” said Brad Evans, Chugach CEO. “This partnership will allow us to secure low-cost and reliable supplies of natural gas for the benefit of ratepayers. This is an important ruling that will have benefits for all of our customers.”
The RCA ruling approves the purchase and sale agreement. With the approved acquisition of ConocoPhillips’ one-third interest, ML&P now owns 56.67 percent, Hilcorp owns 33.33 percent, and Chugach owns 10 percent from the surface down to 7,000 feet. ML&P and Chugach own 80 percent and 20 percent of the interest below 7,000 feet, respectively. Hilcorp will be the operator of the field.
Following the ruling, the utilities will submit the transfer of lease hold interests to the Department of Natural Resources and the Bureau of Land Management for approval.