PALMER, Alaska — MEA’s Board of Directors has approved an extension of its existing natural gas supply agreement with Hilcorp Alaska along with a companion Firm Storage Service (“FSS”) Agreement that have both been filed with the Regulatory Commission of Alaska (“RCA”) for consideration and approval. The extension secures firm Cook Inlet natural gas supply for an additional year through March of 2029.

This contract extension and FSS agreement ensures MEA continues to receive reliable, firm natural gas at costs that remain below current market prices, while also adding the ability to store gas—an important new tool for managing winter demand, supply variability, and long-term energy planning.

What This Means for MEA Members

Natural gas remains a critical fuel source for MEA, particularly during Alaska’s coldest months when electricity demand is highest. Extending the Hilcorp contract provides short-term stability and predictability as MEA navigates a rapidly changing energy landscape.

While MEA anticipates electric rates will gradually increase by approximately 5% per year as a result of this amendment, the negotiated gas prices under this agreement remain consistently below other recently approved Cook Inlet gas supply contracts. This reflects MEA’s continued efforts to manage costs responsibly and protect members from unnecessary price increases.

If the contract amendment is approved, a typical single-phase residential member using approximately 642 kWh per month would see an average increase of about $7.58 per year beginning April 1, 2026, assuming all other factors remain the same. For comparison, without a firm natural gas supply in place, MEA would be forced to rely more heavily on higher-cost diesel generation.

New Added Benefit: Natural Gas Storage

The companion FSS agreement allows MEA to store natural gas during lower-demand periods and draw from those reserves during peak winter months or after the expiration of existing firm gas supply contracts. This added flexibility improves system reliability, improves energy security and helps reduce exposure to supply disruptions and short-term market volatility that could drive price increases.
 
Gas storage is a widely used reliability and cost-management tool across the utility industry and represents an important step forward for MEA as uncertainty around Cook Inlet natural gas supplies continues.

Buying Time to Evaluate Long-Term Solutions

Extending the contract through spring 2029 gives MEA valuable time to continue evaluating and planning for longer-term energy solutions, including:

• Potential liquefied natural gas (LNG) import and storage projects
• A proposed in-state natural gas pipeline
• Additional regional gas supply options
• Diversified and renewable energy resources

This extension allows MEA to move forward thoughtfully and responsibly—without rushing into higher-cost or higher-risk alternatives.

“Keeping the lights on affordably and reliably for our members is always our top priority,” said MEA CEO Tony Izzo. “This agreement gives us dependable fuel at a reasonable cost today, while buying us time to work with our community and partners on long-term energy solutions that make sense for Alaska and for MEA members.”

“This agreement reflects a collaborative approach with MEA to bring additional gas supplies to the market during a critical period,” said Hilcorp Alaska Senior Vice President Luke Saugier. “By extending this contract, we’re able to deploy significantly greater levels of capital directly into our fields to accelerate gas production—resulting in increased investment and additional wells in the Basin."

The regulatory filings related to the contract extension and gas storage agreement will be reviewed by the Regulatory Commission of Alaska in early 2026, and MEA will continue to keep members informed as planning progresses.