Tuesday, April 20, 2010


Unlimited Debt
While HEA has a $450 million debt cap, it turns out the Alaska Electric and Energy Cooperative (AEEC), HEA's separate generation and transmission corporation. has none.
All major projects such as Independent Light take place under AEEC.

Being a completely separate legal entity, AEEC is not directly accountable to HEA members -- you have no rights or privileges with respect to it. AEEC meeting agendas are not published on the HEA website and, at least recently, most meetings have been closed to HEA members. You can only influence AEEC indirectly through appeal to HEA Directors. In a recent e-mail exchange, one HEA Director wrote, "I'm aware of the smoke-and-mirrors aspect of that distinction with AE&EC being a one-member co-op, but that is the legal structure. That said, HEA+AE&EC's debts don't and won't exceed HEA's debt cap."

Getting Steamed Up
On April 6th AEEC approved a $5,017,900 design contract for addition of a steam turbine to the Nikiski facility. The contract has been awarded to Stanley Consultants, Inc., an Iowa-based company. This is the first step in implementing the Independent Light project. Most sources seem to agree that retrofitting the Nikiski plant for cogenration makes technical and economic sense. There is room, however, for significant disagreement over plans to follow up with installation of two new single cycle natural gas gererators in Soldotna.

HEA Website Upgrades
At the April 6 meeting, the HEA Operations committee approved our request that HEA Board Policies be posted on the website. They are available at http://www.homerelectric.com/ by clicking Board of Directors and Elections/Board Policies on the left side menu. You will see that bylaws, the district map, a meetings calendar and other Board related information are available there as well.

Unfortunately, so far none of our suggestions for improving the Independent Light Frequently Asked Question page have been acted on and our responses to answers posted there have not been addressed.

HEA Board Perks
You may have read the recent Peninsula Clarion article on HEA Board Reimbursements (April 9 -- $140,000 in director payments in 2009). This is a valid topic for discussion. Throughout the country there have been examples of rural electric cooperative Boards of Directors partaking of unethical and insupportable levels of payment, often amounting to millions of dollars. Is $140,000 excessive? One would need to look closely at how the money was used. HEA Directors are expected to put in an enormous amount of time and asked to travel often on behalf of the cooperative. Most join the Board with limited knowledge of energy issues or the workings of a utility. Professional development workshops and classes help them develop a working understanding to underpin decisions they are asked to make. The $200 per meeting stipend is among the lowest in the state yet the Board recently voted against increasing it. In addition to this stipend, tuition for professional development courses, travel and lodging for HEA business trips and reimbursement of related out of pocket expenses account for part of the money spent on Directors. Can this process be abused? Probably. Perhaps it would be helpful to HEA members concerned about this issue if HEA took steps to clarify how a budget is determined for these activities, how priorities for which events Directors should participate in are set, and what safeguards are in place to guard against abuse.

Net Metering
Although the RCA is still waiting for the State Attorney General to sign of on the Net Metering standards approved in January, HEA is moving to transition from from SNAP to net metering. HEA filed a net metering tariff with the RCA requesting immediate implementation and may be the first railbelt utility to have done so. May 27 is the earliest expected date for RCA approval.

Renewable Energy
An April 6 presentation by Chris Rose of the Renewable Energy Alaska Project (REAP) to the HEA Operatins Committee on Alaska's renewable energy potential was well received. There was specific reference to how HEA and other railbelt utilities can work toward incorporating renewables into their energy mix. HEA Directors showed interest in the potential of Mt. Spurr geothermal and Lake Chakachamna Hydroelectric projects and in tidal generation technology. Unfortunately, there was no discussion of how HEA would integrate the Independent Light project with these sources should they become available. Chris was invited to return and report after taking a first-hand look this spring at a tidal power prototype off the coast of Ireland.

HEA continues to consider how to utilize power from the Fire Island wind farm and Nikiski Kenai Winds projects when they come on line. Because wind power is intermittent it poses problems of load balancing and dispatch that are challenging. Studies of potential sites for small wind projects on the southern peninsula are ongoing. The Grant Lake component of the Kenai Hydro project is still being considered, though it will require additional funding before significant effort can take place.

GRETC on the Ropes
At the April 13 HEA Board meeting the consensus of Directors was that legislation to create a Greater Railbelt Energy & Transmission Corporation (HB 182, SB 143) will not pass the legislature this session. We suspect this is correct. The issue is very complicated, involving a complete reorganization in the way all railbelt utilities and regulators would operate. While both ratepayers and utilities have stated support for the concept of a GRETC, it's become clear that the two interest groups do not agree on some very basic elements and the RCA recently weighed in with it's own questions and reservations. The HEA Board still wants to work with other railbelt utilities and the next legislature on GRETC legislation.

No comments: