Enstar Natural Gas Co. announced Oct. 19 a 16 percent decrease in gas costs for 2010.

The average Southcentral Alaska residential customer will see a decrease of $24 per month on their Enstar bill beginning in January, the company said in a press release. Customers who participate in budget billing also will see their monthly rate go down in January.

The Regulatory Commission of Alaska must approve the change.

Enstar plans to file its gas cost adjustment with the state agency in November.

Enstar adjusts the cost of gas each year in October, coinciding with annual price changes in long-term gas supply contracts. The price the utility pays to producers to purchase natural gas is passed directly to customers.

The price of gas Enstar pays to the producers is calculated based on a combination of oil prices and natural gas prices.

"Enstar is encouraged to see the high costs and volatility of oil and gas prices stabilizing," said Colleen Starring, Enstar president. "Our news today, that Enstar customers will see some relief in their home heating costs, comes at a time when consumers most need it."

Enstar's older natural gas contracts are indexed against a three-month trailing average of crude oil prices, which saw record prices during the index period in 2008.

The company's newer contracts are indexed on a 36-month trailing average of Lower 48 natural gas prices. The average price of both commodities has plunged in the last year, resulting in lower costs for users of natural gas.

Enstar has operated in Southcentral Alaska since 1961. The company serves nearly 350,000 customers in the region and manages 3,100 miles of distribution lines.