Homer Electric Association district 3 board candidate Don Stead speaks at the HEA annual meeting last Thursday. Stead won the election, defeating incumbent Jim Levine. Candidate Joe Singleton came in third.-Photo by Michael Armstrong, Homer News

Homer Electric Association district 3 board candidate Don Stead speaks at the HEA annual meeting last Thursday. Stead won the election, defeating incumbent Jim Levine. Candidate Joe Singleton came in third.-Photo by Michael Armstrong, Homer News

HEA seeking to stabilize rates

Homer Electric Association customers should see rates stabilize in the near future, general manager Bradley Janorschke said at HEA’s annual meeting last Thursday in Homer High School’s Mariner Theatre.

“The good news is I honestly think things are stabilized,” he said at a presentation at the business meeting. “I think we’re about as high as we’re going to get.”

On April 1, HEA raised its cost-of-power adjustment, or COPA, from 6.9 to 7.8 cents per kilowatt-hour. Its base rate for residential service changed May 7 from 13.78 to 14.88 cents per kwh. The current blended (the base rate and COPA) rate is $22.72 cents a kwh, up from 20.68 cents, about a $13 a month increase in the average monthly bill.

Despite the increase, Janorschke said HEA’s base-rate change of 8 percent is less than proposed rate increases of 23 percent for Chugach Electric Association and 21 percent for Municipal Light and Power, both Anchorage utilities.

About 250 people attended the annual meeting, which included a free meal, booths on energy conservation, presentations of awards for safety poster contests and scholarships, and elections for board of directors. 

In the lower Kenai Peninsula area of District 3, incumbent Jim Levine, a strong advocate of renewable energy, lost to challenger Don Stead. Stead advocated more stable rates, he said in his campaign speech to the members. Joe Singleton came in third.

In District 1, Kenai-Nikiski, incumbent David Thomas ran uncontested and was re-elected, and in wDistrict 2, Soldotna-Sterling-Kasilof, incumbent Dave Carey also won re-election against challenger Andrew Alexandrou.

Janorschke said several factors have driven rate increases:

• Declining energy sales due to conservation and mild winters,

• Higher fuel costs and

• Regulatory burdens.

 

HEA has fixed costs like operations and maintenance that have to be accounted for aside from energy production, Janorschke said. For example, just as consumers pay a monthly customer fee whether they use power or not, HEA has to pay a fee of $30,000 a month to hook up to a natural gas pipeline. 

Gas producers propose raising that fee to $90,000 a month, Janorschke said.

Fuel cost $33 million in HEA’s 2014 budget, he said. HEA pays $7.50 per million Btu compared to a cost of $2.68 per mmBtu in the Midwest.

“If we could buy gas for that here, your bills would go down $30 a month,” Janorschke said.

Looking ahead to cut rates, HEA has secured fuel for the second quarter of 2016 at a lower rate, Janorschke said. HEA will release details of that deal soon, he said.

HEA manages the Bradley Lake Hydroelectric Plant owned by the Alaska Energy Authority. HEA gets 12 percent of its power from Bradley Lake. The rest of the power goes north, partly on HEA transmission lines. 

Called “wheeling,” that’s the cost to HEA of sending other utilities’ power on HEA equipment. Right now, HEA gets $300,000 of the $2.7 million wheeling cost. HEA has filed with the Regulatory Commission of Alaska to increase the wheeling charge to $2.2 million.

“You’re using our member system,” Janorschke said about the wheeling cost that should be paid by other utilities. “You should pay for it.”

Last year marked the first year HEA generated all its own power after an agreement to purchase some power from Chugach Electric expired on Dec. 31, 2013. HEA also gets power from its Nikiski plant, including energy from a steam turbine that produces 18 megawatts without using more natural gas. HEA also gets power from the Soldotna Generation Plant and the Bernice Lake Generation Plant.

HEA also is looking into producing more renewable energy, including tidal energy and a proposed hydroelectric plant at Grant Lake near Moose Pass. HEA will file its final license application for the Grant Lake project with the Federal Energy Regulatory Commission this year.  

The Grant Lake facility, installed on the Grant lake watershed near Moose Pass, would consist of 5 megawatts of installed capacity with an average annual output of 19,500 megawatt hours of energy.

Another possible energy project would be to recover methane produced by decomposition of organic material at the Kenai Peninsula Borough landfill in Soldotna.

“I could talk all night about renewables,” Janorschke said.

In response to a question from a member about purchasing power from Cook Inlet Region Inc.’s wind turbines on Fire Island near Anchorage, Janorschke said HEA won’t do that.

“I’m a big fan of renewables, but it’s got to make economic sense,” he said.

Janorschke circled back around to the question of stabilizing or lowering rates when a member asked about the outlook for rates over the next two years. He said the base rate will stay flat until at least January 2017.

“We have plateaued,” he said. “I think there’s a strong trend downward.”

Michael Armstrong can be reached at michael.armstrong@homernews.com.

More in News

A school closure announcement from the Kenai Peninsula Borough School District.
Schools closed for Tuesday in Homer, Anchor Point

Winter storm continues through Tuesday morning, with high winds.

Coast Guardsmen and state employees load the Together Tree bound for the Alaska Governor’s Mansion on a truck on Nov. 29, 2021 after the Coast Guard Cutter Elderberry transported the tree from Wrangell. (USCG photo / Petty Officer 2nd Class Lexie Preston)
Governor’s mansion tree arrives in Juneau

No weather or floating lines could stay these Coast Guardsmen about their task.

The Kenai Community Library health section is seen on Tuesday, Oct. 26, 2021. The Kenai City Council voted during its Oct. 20 meeting to postpone the legislation approving grant funds after members of the community raised concerns about what books would be purchased with the money, as well as the agency awarding the grant. The council will reconsider the legislation on Wednesday, Dec. 1, 2021. (Camille Botello/Peninsula Clarion)
Kenai council to consider library grant again

The council earlier voted to postpone the legislation after concerns were raised about what books would be purchased.

Diamond Ridge Road near Homer, Alaska, had been plowed on Monday morning, Dec. 5, 2021, but visibility was limited. (Photo by Michael Armstrong/Homer News)
School district announces 90-minute early release today.

Winter storms makes driving difficult on southern Kenai Peninsula.

EPA logo
Alaska Native group to receive EPA funds for clean water projects

The agency is handing out $4.3 million to participating tribal organizations nationwide.

fund
Study: PFD increases spending on kids among low-income families

New study looks at PFD spending by parents

Image via the Alaska Department of Environmental Conservation
Nikiski soil treatment facility moves ahead

The facility, located at 52520 Kenai Spur Highway, has drawn ire from community residents.

Commercial fishing and other boats are moored in the Homer Harbor in this file photo. (Photo by Michael Armstrong/Homer News)
Seawatch: Bycatch becomes hot issue

Dunleavy forms bycatch task force.

Rep. Chris Kurka, R-Wasilla, leaves the chambers of the Alaska House of Representatives on Friday, March 19, 2021, after an hour of delays concerning the wording on his mask. On Monday, Kurka announced he was running for governor in 2022. (Peter Segall / Juneau Empire)
Wasilla rep announces gubernatorial bid

Kurka said he was motivated to run by a sense of betrayal from Dunleavy.

Most Read