Homer Electric Association power bills will rise July 1, driven by the cost of the Cook Inlet natural gas that fuels about 90 percent of the utility cooperative’s electrical generation.
HEA’s cost of power adjustment — the bill component that’s updated quarterly to reflect gas costs — will increase by 8.49 percent.
A residential HEA member using the average consumption of 550 kilowatt-hours per month will see a $3.31 increase to their monthly bill.
HEA Manager of Fuel Supply Mike Salzetti said the change is due less to an overall rise in gas prices than the end of an opportunity HEA had earlier this year to buy a cheaper short-term gas supply from an oil producer.
Because the cooperative now has to switch to buying from a more expensive source to meet contract obligations, the price is going up for consumers.
The utility’s gas comes from two sources: short-term supplies of small amounts on a local “spot market” and a long-term contract with Cook Inlet gas extractor Furie Operating Alaska that requires HEA to purchase at least 4 billion cubic feet of Furie’s gas per year at prices that vary with the contract’s year and amount purchased. The minimum price this year is $7 for less than 4.5 billion cubic feet of gas.
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