Southcentral's 350,000 residents are snug this winter in homes with plenty of heat and Christmas lights twinkling.

But the sense of security fed by light and warmth is a false one in the state's major population area, where utilities are a step or two away from rolling power outages if the weather turns bitter cold -- cold enough to put out of order the complex metal machinery that pushes natural gas through lines and into homes; cold enough to push demand off the charts.

And by the winter of 2011-12, deliverability could be an issue beyond peak demand in the coldest spells.

Natural gas, used to heat buildings and to generate 90 percent of the region's electricity, is probably not going to be available in quantities enough to meet peak demand on cold winter days -- this winter, or next -- under certain scenarios.

Along with deliverability challenges, a recent state geological report shows there's about 10 years worth of gas left in Cook Inlet, should companies choose to invest their global dollars in production for a limited, small market.

One company, a TransCanada subsidiary, wants to build a storage facility to warehouse gas produced in summer months, when demand is one-fourteenth of peak winter loads. The resource could be drawn out in winter.

The company's proposal is a dream come true for some -- a private-sector solution that isn't seeking a dime from the government. All that Cook Inlet Natural Gas Storage, LLC, needs is assurance that the Regulatory Commission of Alaska will allow utilities -- its customers -- to recover storage fees in rates charged to consumers.

But lawmakers, state officials and even utility chiefs could tangle over whether gas storage facilities -- new to the 49th state -- should fall under the Regulatory Commission of Alaska's jurisdiction. If they take too long sorting that out, TransCanada's plans will be delayed -- possibly enough to leave Southcentral facing a nightmare by winter 2012 or 2013.

"On the coldest day of the year, what will we pay to stay warm?" Sen. Hollis French asked. "You'll probably pay anything, which is a bad place to be as a consumer. You don't have an alternate source for your natural gas supply. You want to have some oversight so there's not price gouging at a time when you are most vulnerable."

The problem

To be clear, Cook Inlet isn't near running out of gas next year, or in the next five years. On the contrary, the state estimates there are hundreds of trillions of cubic feet remaining, although that gas is more difficult to access -- and thus, more expensive to produce and purchase.

The real problem is deliverability. Utility and municipal managers, lawmakers and others are seriously concerned that when Southcentral soaks up huge amounts of gas to ward off Alaska's bitter winter temperatures, the supply may not hold.

Municipality of Anchorage Mayor Dan Sullivan drafted an energy task force that's studying the potential for emergencies and running tabletop exercises to test procedures in case of extreme shortages or -- more likely -- breakdowns in the machinery that pushes gas to pilot lights.

"If we had to go to that extent, to call upon people to conserve ... and go to rolling blackouts, at least we have a procedure in place," Municipal Manager George Vakalis said. "We know how to do it."

Since 1969, the liquefied natural gas export plant at Nikiski has provided a buffer for the supply and demand swings -- in essence, offering companies an outlet for gas that the Southcentral market couldn't absorb. However, a shortfall is annual production supply is anticipated in 2012 or 2013. The federal LNG export permit runs out in March 2011, and ConocoPhillips hasn't announced whether it will apply for an extension.

"We're faced with a unique environment in Cook Inlet with the demand swings," said John Sims, Enstar's spokesman. "The LNG facility is very important. It creates incentive for (companies) by having that large, industrial export customer."

ConocoPhillips, financially strapped after the past year's global economic downturn, hasn't said yet whether it will close or sell the facility, turn it into storage, or seek continued exports.

Solution on the table