HEA member has lots of questions about deregulation of Homer Electric
Providing electric service to HEA members is not a simple job. That is one reason that HEA is currently regulated. Before voting on deregulation of HEA, members should fully understand the impact.
HEA claims that deregulation of the utility can be reversed if members are unhappy — this is true, it just is not a simple process. Rules for an election to re-regulate are found in Alaska statute AS 442.05.712 and section (g) provides, The board of directors of a cooperative shall call an election upon receipt of a valid petition from its subscribers or members. A petition shall be considered valid if it is signed by not less than the number of subscribers or members equal to ten percent of the first 5,000 subscribers or members and three percent of the subscribers or members in excess of 5,000. An election under this section may only be held once every two years.
So any person who understands this provision may start the process to re-regulate HEA if they are unhappy with deregulation. Piece of cake!
Before casting my ballot on deregulation, I would like to hear some thorough reasons why I should vote yes or no — reasons beyond: The RCA commissioners live in Anchorage; or regulation costs money; or other utilities are not regulated. Here are some questions I would like to see answered before I vote:
1. A member of the HEA board wrote that the RCA has cost HEA millions. If HEA can save these millions through deregulation, will member electric rates be reduced? What will HEA do with these saved millions if not reduce member energy rates?
2. HEA uses Kodiak Electric as an example of a utility that built a 100 percent renewable system after deregulating. Does HEA plan to do this? Can HEA build a renewable system using the newly constructed generation plant? Is a renewable system affordable now that the gas generation plant has been built? What renewable energy programs is the board looking into and how does deregulation affect these?
3. Flexibility — how does deregulation make it easier to implement programs such as community solar and recharging for electric cars? Can’t that be done anyway?
4. Are there costs related to the generation plant investment that the RCA will not allow HEA to recover through rates? If so, how much exactly? Will these costs be put into our rates under deregulation?
5. In the Homer News article, Mr. Janorschke referenced HEA’s “financial situation.” Exactly what is this financial situation and specifically how will deregulation fix it? Please give specifics: what costs are there and how will they be recovered and why are they not being recovered now?
6. Please explain HB 78 and its effect on HEA — both financially and operationally. Would deregulation affect how HEA is impacted by this bill? (HB 78 directs the RCA to establish a standard tariff for Railbelt transmission — or establish a separate entity to manage transmission for all the electric utilities).
7. If deregulated, how will HEA notify members of rate increases? Will there be a 30-day notice period for members to review and question calculation of the rates (as happens under the RCA)? Will all financial information be available to members including management salaries?
8. The RCA does not allow recovery of costs that are not directly related to provision of electric service. Will such costs be put into our rates under deregulation? Such costs include political donations, anticipated costs not yet incurred, employee educational and moving expenses, board member per diem and other costs not directly incurred through provision of electricity?
9. Per 3 AAC 48.730(b), under the simplified rate filing method that HEA follows, the board has the major responsibility for HEA’s rates, not the RCA. Is this not already “local control? Under these regulations, HEA must provide reasonable notice of any rate adjustments either before or at the time of the change- does HEA do this? How?
10. Are any deregulated electric utilities in Alaska interconnected with other electric utilities in the way HEA is part of the Railbelt system? Isn’t this complexity a reason for being regulated?
If you have questions, attend an HEA community meeting and ask for answers.
Wendy Anderson is a Homer resident, a retired RCA telecom analyst, and a member of the Kachemak Bay and Kenai Peninsula Quilters Groups.