Homer Alaska - Opinion

If you've been thinking recent low electric rates were too good to be true, you were right. Assuming the Regulatory Commission of Alaska approves HEA's current request for a 16.54 percent increase, your price per kilowatt will go from 13.720 to 15.989 cents — on April Fool's Day. No joke!

Better get used to it. In February, HEA General Manager Brad Janorschke stated that another 2 percent increase would probably be requested for July.

As long as most of our electricity comes from burning natural gas, we can count on wild short-term rate fluctuation and ever higher costs over the long haul. The natural gas price is volatile, like that of all fossil fuels. Our only way to combat erratic rates and slow the long-term increase is to add renewable energy sources to our generation mix. For example, over 15 years of operation, the cost of Bradley Lake power remained almost flat — only about 3.9 cents per kilowatt hour by 2007.

That's where HEA's Independent Light plan falls disappointingly short. Upgrading the Nikiski plant and buying new gas turbines for Soldotna might free us from Chugach Electric Association's nasty clutches, but it won't reduce our dependency on natural gas. Worse still, in spite of contrary claims from HEA management, it might very well render us incapable of ever adding significant amounts of renewable energy to our portfolio.

If HEA members assume all the debt burden we can bear for new gas-fired generation, how will we afford to buy renewable energy from producers or build our own renewable energy projects? And the Independent Light debt burden will be heavy.

According to HEA's Janorschke, "Turbines typically cost $1,400 to $1,800 a kilowatt, but that doesn't necessarily take into account the cost of installation." That could mean borrowing $203 million just for the turbines. This in addition to HEA's present $140 million debt and the $25 million loan recently authorized by its generation arm, the Alaska Electric and Energy Cooperative Inc. How much more will be needed to upgrade the old Soldotna generation facility and the distribution and transmission system? What will it cost to acquire a firm source of gas and perhaps a pipeline to deliver it?

Natural gas generation will probably serve as our energy base for a long time. But ratepayers should be wary about assuming so much debt that we foreclose our ability to take advantage of flat-rate renewable sources as they become available.

One retired HEA engineer put it this way: "Once the gas generation is in place that will be it, they will have no reason to seek or swap out the gas for something else, thus the argument for going a bit slower so as to not lock out near future options."

Mike O'Meara is a spokesperson for the HEA Members Forum.

About the HEA Members Forum:

HEA Members Forum is a growing ad hoc group of approximately 300 Homer Electric Association members who support the rural power cooperative and other "railbelt" utilities in efforts to adopt clean, affordable, and sustainable alternatives to fossil fuels.

An original forum participant list of about 209 people was put together from a petition on energy issues presented to HEA at the May 2008 annual board meeting. This list continues to grow.

HEA Members Forum is dedicated to ongoing improvement of HEA. The group has five major objectives:

1. Encourage a policy of openness and responsiveness by HEA management and board.

2. Improve member participation in HEA's affairs.

3. Improve rate stability and minimize increases by getting more of electricity from renewable energy.

4. Encourage efficient use and conservation of energy.

5. Increase "railbelt" operational efficiency through greater collaboration among utilities.

Members interact primarily by sharing e-mail updates and action alerts and by telephone. Assorted updates and alerts can be viewed along with related information at www.heamembersforum.blogspot.com. The address is 3734 Ben Walters Lane, Homer, AK 99603.