On Oct. 15, in the last of several membership meetings around the Kenai Peninsula, representatives from Homer Electric Association went over the current state of its rates and policies as well as upcoming developments.
HEA has conducted area meetings for nine years, and now visits seven locations across the peninsula, including last Thursday’s final stop in Funny River. HEA General Manager Brad Janorschke took about 40 residents through a presentation outlining HEA’s customer rates, future business plans, ongoing projects and changes to the way customers pay for service.
Effective Jan. 1, the company will stop accepting MasterCard as a method of payment. Janorschke said HEA is always looking for ways to cut costs, and it is too expensive to process payments from MasterCard users. HEA spends more than $400,000 per year to process all credit card payments, according to a press release from the organization. The change will impact the approximately 17 percent of members who use MasterCard to make payments, Janorschke said.
“Seventeen percent of the folks who use credit cards use a MasterCard … but our cost related to MasterCard is 58 percent (of the total cost),” said Joe Gallagher, director of member relations. “It’s hard to predict … but we’re definitely going to save money by not accepting MasterCard.”
Other options for MasterCard users will be to switch to Visa, or to pay via mailed check, over the phone, in person or by one of several other options.
Additionally, in 2016 HEA will start a contract with Furie Operating Alaska, a company currently drilling exploration and development wells in Cook Inlet. Janorschke said this contract will drop HEA’s cost of fuel per 1,000 cubic feet of natural gas, or mcf, down to about $6.50 in 2016. HEA currently pays between $6.50 and $7.50 for its fuel from Hilcorp, Janorschke said.
The average monthly bill for members is projected to rise from $133 in 2015 to $137 in 2016. However, Janorschke said the contract with Furie could potentially offset that increase, and hopes the rate increase won’t end up being felt by members.
“(Members) are going to see a little increase the first of the year on the base rates, and then possibly another small increase at the beginning of 2017,” Janorschke said. “(They) may see a bump at the beginning of the year, and if we get normal sales next year coupled with these (reduced) prices, (members) may see (their) bill go back down to what it was at the end of this year.”
In general, HEA energy sales have been decreasing since 2013, in part because of the mild winters the peninsula has been experiencing, Janorschke said.
Janorschke said energy rates are always something members express concern about, though whether people view them as high or low depends on where they lived before Alaska.
“It just depends on where the member’s from,” he said. “If they’ve done their own diesel generation in the past, they go ‘Wow, it doesn’t matter what rates are, it’s way better than what I had.’ If they’re from the Northwest they go ‘Wow, it’s a lot cheaper down there, why is it so expensive?’”
Gallagher said the meetings are a way to let members know what’s going on with the company on a more intimate level that what can be reached at larger, annual meetings.
HEA also is in the process of getting a reimbursement of about $425,000 for the damage it incurred during the Card Street fire this summer. Gallagher said HEA will file for this reimbursement separately from the Kenai Peninsula Borough, but will follow the same process. There is no timeline on when those funds will be reimbursed, Gallagher said.
Replacing the facilities damaged in the fire will continue through 2016, Janorschke said.
Megan Pacer is a reporter for the Peninsula Clarion.