Thursday, October 22, 2009

HEA and Self Regulation

The attached letter went to the HEA Board of Directors and General Manager Janorschke yesterday. I am told that self regulation, or as HEA frames it, "local control" will be discussed at the November 3 Board Meeting in Kenai. Should this issue move forward you will be asked whether or not to give up regulatory oversight of our coop. This would perhaps be the largest structural change in HEA's history. It is in your interest to see that the issue is fully explained to your satisfaction prior to any such vote. One way to do this is to attend the next Board meeting in Kenai or via video conference from the Homer HEA offices.

If you like, you can also e-mail your sentiments regarding the process HEA should use to explore this issue.

Deborah Debnam, President debbie(email@)
Tim Evans, Vice President heatde(email@)
David B. Thomas, Secretary/Treasurer davidthomashea(email@)
Eugene "Jim" Levine, Deputy Secretary jlevine(email@)
Jose "Tony" Garcia tonygarcia43(email@)
Alan Bute byrdave(email@)
Ed Oberts eoberts(email@)
J. Michael Pate Mike_Pate(email@)

Brad Janorschke, General Manager bjanorschke(email@)

HEA Considers "Self Regulation"

The HEA Board is taking steps toward becoming "self regulated." What does that mean? At present HEA, like most moderate to large Alaska electric utilities, operates under the oversight of the Regulatory Commission of Alaska (RCA). The RCA was established to see that utilities adhere to state laws and regulations and operate in a fair and fiscally responsible manner. As part of it's mission, the RCA works to mitigate differences between utilities and help protect consumers. However, Alaska law allows utilities to opt out of RCA oversight by a vote of the member/ratepayers. Under self regulation, the HEA Board would be free to conduct business absent any oversight except that of the member/ratepayers (that's us).

At this month's community meetings HEA members are being asked to complete a short opinion survey (attached) regarding how they might feel about getting the coop out from under RCA purview. Of course, most members probably don't know much about the RCA or what it might mean if they vote to opt out.

This is a significant issue for all HEA members. You should become informed as quickly as possible so that you understand how such a change could affect you.

Is "self regulation" good or bad for us? That probably depends on how much confidence and trust you have in our HEA Board and management.

From discussion at Tuesday's Board meeting, it appears that a majority of the HEA Board favors moving to "self regulation." They feel that our coop could operate more efficently and cost effectively without RCA oversight. To be sure, the workings of the RCA are typically ponderous, time consuming, and sometimes frustrating. Is there anything to lose by dropping out? Perhaps not. Although one thing come to mind right away -- under "self regulation," the new Alaska net metering rule would not apply to HEA. But without more information, it's difficult to know if other problems might arise.

At Tuesday's meeting HEA Board members and General manager Janorschke discussed the importance of providing HEA members with good information about the reasons for, the process, and potential outcomes of a transition to "self regulation." Hopefully this would be more than a sales pitch.

It's up to us to require a frank and open examination of the potential risks and benefits of such an enormous change well before we are asked to vote.

Net Metering

On October 14, 2009 the Regulatory Commission of Alaska (RCA) approved a net metering rule. While it appears to have some flaws, this is still a great step forward for anyone interested in alternative energy. The final text of the rule is not yet available but a preliminary summary from the RCA is attached.

For the individual or business wanting to install solar panels, a wind turbine, or other type of renewable energy system net metering is far and away superior to HEA’s SNAP program. This is, of course, why HEA has had difficulty getting members to contribute to SNAP. See some important differences between the two in the attached comparison.

The new net metering rule will become effective after final text has been reviewed and approved by the Attorney General and Lt. Governor.

Tuesday, October 13, 2009

Seldovia HEA Meeting October 23rd

HEA will hold a community meeting in Seldovia to discuss
current projects and issues on
Friday, October 23rd at noon.

RCA Net Metering Hearing October 14th

The Regulatory Commission of Alaska will hold testimony and potentially
adopt a Net Metering rule on
Wednesday, October 14th at 9:00 a.m.

According to RCA staff, the commission may vote yes or no on adopting
net metering regulations based on comments received to date. It is also
possible the commission will request additional comment on a revised
version of proposed net metering regulations.

Teleconferencing can be arranged if
requested in advance of the meeting.

More information may be obtained by calling 1-800-390-2782
or by visiting the RCA website at

Tuesday, September 8, 2009

The HEA Board will meet Tuesday, September 8,

in the Kenai Offices, 280 Airport Way, Kenai AK 99611.

Operations Committee 11:00 AM
Finance Committee 2:00 PM
Regular Board Meeting 5:30 PM

Meeting agendas are now available on the HEA website:

Please consider attending one of these sessions.
It remains important that some regular members attend Board Meetings to show ongoing interest with our electric cooperative's affairs.

If you would like to attend but cannot travel to Kenai, consider asking the meeting to be teleconferenced to the Homer office.
Homer Office (907) 235-8551 -- Kenai Office (800) 478-8551



HEA anticipates a rate reduction beginning October 1

Homer Electric Association’s blended rate is anticipated to go down by 12.57 percent for the fourth quarter of 2009. The new rates are scheduled to go into effect for all billings starting on October 1.

The reduction is the result of a 55.7 percent decrease in the wholesale power cost rate adjustment (WPCRA), from 4.439 cents to 1.966 cents under terms of a filing that will be submitted on August 31 to the Regulatory Commission of Alaska (RCA).

The WPCRA is adjusted quarterly to reflect changes in the cost of power purchased from Chugach Electric Association. Homer Electric is under contract to purchase its power from Chugach Electric through 2013. Natural gas is the fuel used to generate more than 90 percent of the power sold to Homer Electric.

In addition, Homer Electric submitted a Simplified Rate Filing on August 14 to the RCA requesting a 1.83 percent increase to the energy base rate. For residential members, this will be an increase from 13.296 cents per kilowatt hour to 13.539 cents per kilowatt hour in the fourth quarter.

If approved by the RCA, the decreased WPCRA rate, combined with the increase of HEA’s base rate, sets the new overall blended rate at 15.505 cents per kilowatt hour; a 12.57 percent reduction from the previous rate of 17.735 cents per kilowatt hour.

The new rate will mean a monthly savings of $14.05 for the average Homer Electric residential member using 630 kilowatt hours per month. The new rates for Homer Electric members are planned to go into effect starting with all billings as of October 1.

Tuesday, August 11, 2009

Solar Tour

Saturday, August 15, 2009
The Alaska Solar Tour
10am to 4pm including Kenai Peninsula sites

The ALASKA SOLAR TOUR is a free self directed tour from 10am to 4pm at 25 different sites around the state. The Alaska Solar Tour is sponsored by the Alaska Center for Appropriate Technology in conjunction with the American Solar Energy Society.

The Alaska Solar Tour will feature home and business sites in our community that showcase installations of Solar thermal, Photovoltaic, and green building features. Find out how your neighbors are trimming their energy bills, generating their own electricity, and improving the future of our planet by living sustainably today.

No registration required. View the map of host sites at www.AlaskaSolarTour.ORG and get a carload of friends to visit a few of your neighbor’s open house sites. Communities involved include: Anchorage, Mat-Su, Kenai/Soldotna/Kasilof, Fairbanks/Delta Junction, Nome, Homer, and Kalgin Island. Join us in tribute to these trail blazer Alaskans who have ventured out ahead of the crowd using a cleaner, safer, and renewable source of energy.

In the Kenai/Soldotna/Kasilof area we have 2 sites; the 1st site; (open from 10am-Noon) is the Fox Farm on K-beach and Old Timer Rd. It has a newly installed 700 watt PV system that produces 50% of the power needed for this small home. There will be refreshments and a performance by Amy Hettinger* at 11am. Amy is a folk singer and a volunteer for Bioneers in Alaska. Also present will be Timothy Oliver – the Kasilof artist who was commissioned to paint the artwork for the 2009 poster.

From Noon - 4pm Ionia will provide a home grown vegetarian buffet while sustainable energy seekers are energized by the angelic sounds of Amy Hettinger* on the guitar from 1- 2pm. Ionia will provide tours of their community demonstrating their focus on sustainability. A high efficiency wood fired Garn boiler and 4 large Heliodyne flat plate solar collectors provide hot water for domestic use as well as space heating. Each year Ionia continues to get closer to the sustainability goal we all strive for. This organic community has replaced $12,000 per year of propane and $3,000 per year of heating oil with clean, safe, and renewable energy.

*Amy Lou Hettinger
Born and raised in a log cabin her parents built in the knobs of Kentucky, singer-songwriter Amy Lou grew up 'porch pickin' and singin' with an amazing family of musicians. Three years ago, she began to write her own songs and migrated north, where she promptly fell in love with the Alaskan mountains and people. Just back from completing an intense Masters in Education at Harvard, she's glad to be home. Amy Lou’s fresh and uplifting music has been called “edifying,” and her voice, “lilting” and “angelic.” You can get a taste of Amy Lou's music, and see a schedule of upcoming shows,

Thursday, July 16, 2009

July 16th Update

HEA Board Vacancy Update

The following people applied to fill Brian Hirsch's Board seat:

Rick Foster
Robert "Bob" Burns
Douglas "Doug" Stark
Don Seelinger
Steve Franklin

Applicant interviews were conducted on Monday, July 13. As of the July 14 Board meeting no selection had been made. There appears to be significant disagreement among sitting Board members over which applicant is best qualified.

HEA Board Meeting
Representative Paul Seaton attended the July 14 Board meeting to discuss contents of his May 13 letter to the Board. In essence, he stated that the letter was not meant as a criticism of HEA policy but rather was notification that he would no longer attempt to explain HEA policy to irate constituents. Seaton explained that he and his staff lacked the expertise needed to clarify actions and intent of HEA Board and management so would refer all future inquiries directly to HEA.

General Manager Brad Janorschke provided a copy of his July 14 report (see below) to the Board from the July 14 meeting. It gives an overview of some things discussed. We have circled items of special interest in red. Perhaps most notable is the news of rapid progress on the Mt. Spur geothermal lease potential evaluation.

HEA Website Redesign
There has been a good deal of work done to improve the HEA website. Many changes reflect input of HEA members and will make the site more user friendly. Check it out at and if you have comments or other suggestions contact Joe Gallagher at jgallagher( email @) or 283-2324.
July 14, 2009

Wow, what a terrific summer we are having. I hope all of you have been taking advantage of this weather before the reduction in daylight hours becomes too easily noticeable. With the recent warm weather, it has been unseasonably dry so please keep this in mind as there has been a rash of wildland fires lately that have been assisted by the dry conditions. Although many of our employees have been busy with summer vacations, we have still managed to keep projects moving toward completion.

Some of the highlights over the past few weeks include the following:

1. Financial Update – HEA’s May, 2009 monthly margin of just over $309,800 reflects a rebound in our year to date margins to $1.4 million. The new total is within approximately 14% of forecasted margins of $1.7 million.
Members have been informed on their June and July bills about the new rates going into effect July 1, 2009. Press releases have also been issued explaining the 1.84% decrease in Base Rates, the WPCRA increase from 3.970 cents to 4.439 cents per kWh and the Regulatory Cost Charge (RCC) increase from .0362 cents to .0432 cents per kWh.

2. Alaska Energy Authority (AEA) Railbelt Integrated Resource Plan (RIRP) – AEA held their Technical Conference July 8th and 9th. As of this writing, I attended the first day of the program that included a status report on the Regional Integrated Resource Plan (RIRP) from AEA and Black & Veatch, reports from representatives of Chugach Electric Association and an update from Usibelli Coal. Several HEA Directors, along with myself, will have additional comments on this conference at the Board Meeting. Some interesting tidbits presented include:

By the end of 2010, enough data will have been collected to indicate whether a 100 MW geothermal project is a viable option on Mount Spur;

400 MWs of new generation will be required to replace the currently aging fleet over the next 15 years;

Tidal and wave technology is expected to be commercialized within the next 5-7 years;

The South Central Alaska Power Project (SCAPP or South Anchorage) is expected to be online sometime in 2013 at a cost of $450M;

Stored hydro electric energy used to meet demand during peak periods is extremely valuable;

Long term, we must reduce our expose to the price volatility of natural gas;

Natural gas will continue to be a significant component in meeting our future energy

3. Natural Gas Supply Company – As I mentioned last month, representatives from HEA met with the Alaska Natural Gas Development Authority (ANGDA) about the creation of the Natural Gas Supply Company (NGSC). We recently received a Confidentiality Agreement from NGSC which would permit disclosure of confidential information that has been acquired by ANGDA. By next week staff should have a recommendation on HEA’s membership in the not-for-profit natural gas supply and/or services cooperative.

4. Power Supply Update – Great news! HEA was able to secure the services of the Owner’s Engineer position with the individual mentioned last month. We are excited to bring Mr. Flynt on board and we expect his arrival around or before mid August. Filling this position at the present time is key if we are to stay on schedule. In addition to filling this position and working on several other related tasks, we have initiated the process of obtaining required environmental permits. As with any generation project, obtaining permits in a timely manner will be critical.

5. Renewables Update:

Wind Power Update – Significant activity continues on two projects in particular. The first being Fire Island whereby Wind Energy Alaska (WEA) continues their efforts to obtain the permits necessary to expand the project to roughly 50 MWs and work out the challenges of integrating the non-firm source of energy into the transmission grid. Last I heard the completion date has been pushed back to 2011.
The other wind project that is gaining momentum is the Kenai Winds (i.e. BQ Energy) Project located in Nikiski. Compared to Fire Island, this project is much smaller and therefore should be much easier to integrate with the existing electrical infrastructure. This project is expected to be on-line before Fire Island and is worth getting excited

Small Scale Hydro (Kenai Hydro, LLC) Update – Field data collection activities continue at Grant Lake and Falls Creek. As mentioned last month, these activities will include foot surveys for fish aggregation, stream gauging and instantaneous water flow measurements. Data collected over the next 4 months will assist in re-establishing stream hydrology and assist with building the stream flow model required by the agencies to determine project impact. In addition, work continues on two FERC required documents (Notice of Intent and the Preliminary Application Document). The permit application is lengthy and I would anticipate that if after two years of analysis and successful receipt of all required permits, the economics of these projects will be the same as almost all other hydro projects. Grant funding, or some creative financing, will be necessary to make them economically viable. Updates on this hydro project can be found at

6. BOD Workshop – Special thanks to all the directors who found time to attend the Board Workshop held two weeks ago. Mr. Aadland had nothing but complements describing the participating Directors and I was very pleased with the questions and discussion during the afternoon session that I attended. I hope everyone in attendance felt the workshop was a good use of their time.

7. Chugach Electric Association (CEA) Rate Case – It appears CEA is projecting the following
increase to their members:
CEA Retail customers 5.4%
HEA 7.8%
MEA 2.0%
Seward 9.7%
MEA’s projected increase is lower because:

Their increase was larger in the previous rate case and as a result, CEA sees us as just “catching-up”; and

HEA’s load has not materially increased, while MEA’s has. As a result, MEA has more kWh & W to spread the fixed costs over. There are decided advantages to a growing electrical system. CEA is very interested in settling the issues between us. They realize how beneficial it was in the previous rate case. There will be $450,000 included in the 2010 budget for the CEA rate case.

8. Facilities Plan – At the July Operations Committee meeting, I anticipate having a Facilities Evaluation/Plan completed for Committee review. Our goal is to continue with ongoing required maintenance between now and 2014 with the intent of not making any significant investment in building facilities until after our new generation resources have been constructed.

9. HEA Rate Case Update – The Depreciation Study, the first component of the Rate Case, is finalized and upon acceptance by the Board of Directors will be filed with the RCA. As a result of the Study, we anticipate a reduction in depreciation expense in future years. Data collection continues for the Equity Management Plan which is the second component of the Rate Case. Using projected power costs, load forecasts and our long range capital plan, RW Beck will forecast our equity levels over the next 10 years. This is an essential tool needed to determine our revenue requirements portion of the HEA Rate Case. RW Beck will present an update of the Equity Management Plan at the August Board meeting. The Cost of Service and Rate Design elements follow the Equity Management Plan for presentation later this fall.

As usual, please feel free to give me a call anytime with questions. I look forward to seeing you next Tuesday evening in Homer.


Thursday, July 2, 2009

Net Metering Comments Needed

Alaska State Net Metering Standards Proposed
The Regulatory Commission of Alaska (RCA), seeks comment (Docket R-09-001).

Your input is needed by 4:00 PM Monday, July 13, 2009

Proposed Net Metering Standards require HEA and other large utilities to allow you to reduce home or business electric bills by installing wind turbines, solar panels, or other alternative technologies.

How does net metering work?
Your renewable energy system is connected to the HEA grid. You save money by subtracting the value of the energy you create from your utility bill. If you produce more energy than you use, you receive a credit for the next billing cycle.

Write your comments today -- request these 3 changes:

No special charges for customers who produce renewable energy. As proposed, standards allow utilities to charge net metering customers an added fee. This undermines the point of net metering and will discourage participation.

Adopt an annual billing cycle for net metering. The proposed billing cycle is monthly. It should be annual to give you maximum benefit from high seasonal solar and wind production peaks.

Cap the number of renewable energy systems based on peak demand. The proposed standards limit net metered energy to 1.5% of the utility’s average demand. Total capacity limit for net metered systems should be set at 1% of the utility’s peak demand (when power use is highest). A larger cap means more people benefit and it will allow our renewable energy economy to grow.

Submit your comments to:
(scroll down to R-09-001 and click far right box, “submit comments”) or mail them to:

The Regulatory Commission of Alaska
701 W. Eighth Ave. Suite 300
Anchorage, Alaska, 99501

For alternative communication formats to comment, please contact Joyce
McGowan at (907) 276-6222, toll-free at 1-800-390-2782, or TTY (907) 276-4533, or
send a request via electronic mail to rca.mail (email @)