By the Journal of Commerce

Gas prices to consumers have gone up because the cost of gas from producing companies has increased. Enstar's cost of service, however, is flat and even declining. This year the utility's costs for delivering gas are $1.70 per cubic feet. Ten years ago it was $1.93.

There is also one piece of good news for Southcentral Alaska gas consumers in 2008. The sharp gas price increases are flattening out and the price the utility will pay for gas in 2008 will decrease, from $7.03 per cubic foot in 2007 to $6.87 per cubic foot in 2008.

That translates to an average 2 percent decline in the price of gas to an average residential homeowner in Enstar's service area.

A slight decrease comes about because of the way the pricing formula works in the contract Enstar has with Chevron Corp., a major supplier of gas to Enstar.

The gas price for any year is the average of the previous three years of the Henry Hub gas trading hub price in the Lower 48.

The Henry Hub in Louisiana is a major junction of U.S. gas pipelines that has also become a place where gas exchanges are made, and prices set there are one of the major price indices watched by gas traders in the U.S.

Enstar's price in Alaska has shot up in the last three years because of the price spike in the Henry Hub index caused by Hurricane Katrina in 2005.

Henry Hub gas prices dropped after Hurricane Katrina, and the hurricane year is now working its way out of the three-year average.

For the 2008 gas price the average included 2005, 2006 and 2007 of Henry Hub prices.

For 2009, the gas price in the Chevron contract will include 2006, 2007 and 2008, with the hurricane year completely out of the formula.