Have You Voted That HEA Election Ballot?

If so, give yourself a pat on the back. 

If not, you still have time. 

Mail-in ballots must be received by HEA no later than May 2. 

Elect capable, responsible, Directors to the Homer Electric Association Board.

David Thomas (District 1)    Ed Oberts (District 2)    Jim Levine (District 3)

HEA Members may also vote in person at the Annual Meeting on May 3 at Homer High School.

Regular HEA/AEEC Meetings

Regular HEA/AEEC Meetings
Tuesday, January 10, 2012

10:00 AM -- Operations and Special Projects
1:00 PM -- Finance Committee
3:00 PM -- AEEC Board Meeting
5:30 PM -- HEA Board Meeting

Warning: On the meeting calendar page of the HEA website when you "hover" the cursor over a meeting title an incorrect time is displayed. For example, 9:00 AM will be shown as the Operations Committee starting time. Click on the meeting title to get the right time.

Location: Meetings take place in the Kenai Offices at 280 Airport Way. Video conferencing is available in the Homer Offices at 3977 Lake Street, 907-235-8551. Draft agendas are available on the HEA website at http://www.homerelectric.com/BoardofDirectorsElections/BoardMeetingInformation/Agendas/tabid/220/Default.aspx

. There are sometimes last minute changes in scheduling, so check the website.

Electronic Voting
Resolution 45.2012.02, proposing an amendment to HEA bylaws to allow electronic voting in annual elections is on the January 10 Operations Committee and HEA Board meeting agendas. If passed, an electronic voting option would not eliminate traditional paper ballots. At the October meeting, Operations Committee Chairman Jim Levine reported  members' concerns about potential vote tampering.  Hopefully, if electronic voting is approved, effective protection against hacking and vote manipulation will be incorporated into the system. If you are interested in this topic you should attend the 10:00 AM Operations Committee Meeting.

Energy from Garbage (thanks to Sustainable Homer for this reminder)
Wednesday the 11^th:  REAP Forum: Anchorage Landfill Methane Power Plant  Get the live podcast online at: https://www1.gotomeeting.com/register/830056584 to hear from 6-8pm about the latest on Alaska's FIRST EVER Landfill Methane Power Plant, which in 2012 will tap methane produced by the Anchorage Regional Landfill to power Joint Base Elmendorf Richardson (JBER). There are many such plants around the country, but this will be the first in Alaska. Their speaker will be MARK MADDEN, Solid Waste Services Director for the Municipality of Anchorage. More info:  907.929.7770, www.REalaska.org

New HEA Rate Structure
If you received your January HEA bill you probably noticed the new rate structure. The components of residential electric bills include:

New customer charge -- $15.00
New Blended energy charge -- 16.917 cents per kWh (HEA base rate + Cost of Power Adjustment)
Regulatory charge
Sales tax

The $15.00 customer charge is a bit low. It covers less than half the amount the RCA allows a utility to charge for its fixed costs (basically, everything needed to provide service to a customer except the electricity). This leaves HEA still recovering a large part of those fixed costs through the per kWh energy charge. That's why the monthly 150 kWh minimum energy charge was added. The minimum is really just an additional, but variable, customer charge disguised as an energy charge. That's why the RAPA and the RCA were reticent to approve it. When they finally did, the RCA capped the combined minimum energy charge and customer service charge at $38.38. HEA can't exceed that amount no matter how much the per kWh energy rate increases without going back to the RCA.

According to HEA the typical residential member uses an average 630 kWh a month and will see a 7.2% decrease in their bill under the new plan. The lowest consumption members will see an increase in their rates, however. See the news story at http://homernews.com/stories/010412/news_nhrpa.shtml#.TwovSSNqNZg or the HEA press release at http://www.homerelectric.com/ for more information.

Renewable Energy Money for HEA Members
HEA has offered relatively low interest loans (up to $5,000) through its "Line of Credit Program" for a number of years.  These are designed to help members upgrade to more efficient appliances, improved electrical and plumbing systems and much more. At the December Board meeting, small scale renewable generation equipment and services were added to the list of acceptable uses for the loans. Learn more about the program at http://www.homerelectric.com/Residential/HEALoanProgram/tabid/93/Default.aspx.

Heating with Lower Cost Off-peak Electricity
HEA General Manager Brad Janorschke has proposed investigating an Electronic Thermal Storage (EST) pilot program for 2012. It would enable members to offset higher cost propane and fuel oil with lower cost off-peak electricity. Off-peak energy sales allow dispatchers greater flexibility in maximizing system efficiency. For example, shifting demand from peak use hours to lower demand times can avoid the need to fire up additional generation or purchase power from other producers -- both expensive options. This strategy was not a practical option under HEA's present power purchase agreement with Chugach Electric Association, however. Once HEA is generating most of our power, reduced off-peak electric rates become a real possibility. 

ETS units are designed to be used as energy storage devices that can help us incorporate fluctuating renewable energy resources like wind power by evening out and balancing energy demand. An out-of-budget expenditure will be presented to the HEA Board for approval prior to proceeding with the project. If you are interested in this kind of project you should attend the 5:30 PM HEA Board meeting to ask questions and tell the Board what you think.

Regular July HEA/AEEC Meetings

Meetings take place this week at the Homer Offices, 3977 Lake Street. Video conferencing is available in the Kenai Offices at 280 Airport Way, 907-283-5831.

Tuesday, July 12, 2011

10:00 AM -- Operations and Special Projects
1:00 PM -- Finance Committee
3:00 PM -- AEEC Board Meeting
5:30 PM -- HEA Board Meeting

Draft agendas are available on the HEA website at http://www.homerelectric.com/BoardofDirectorsElections/BoardMeetingInformation/Agendas/tabid/220/Default.aspx

. There are sometimes last minute changes in scheduling.

Excerpts from the June HEA Manager's Report

Regulatory Commission of Alaska (RCA) Docket regarding the HEA/AEEC relationship – The RCA docket that questions the relationship between HEA and AEEC is still open. The deadline of May 27 was extended until June 27, 2011. It appears that questions posed by the petitioners are related to governance and legal matters. [This matter is the subject of a formal compliant filed by seven HEA members concerned about possible inappropriate management practices.]

Renewables
Tidal Power – HEA staff met with ORPC [Ocean Renewable Power Company] representatives on June 1 to discuss
how to continue to develop a tidal power pilot project in Cook Inlet. The discussion went well as the parties look to conduct research, develop project plans, indentify grid interconnection, update project costs, and establish a legislative strategy prior to the end of this year.

Watana [proposed Susitna Dam] – Alaska Energy Authority and their engineering contractor met with some of the Railbelt engineers June 8 to discuss the proposed project. Most of the discussion centered on establishing the appropriate size of project for the Railbelt. The 600 MW size identified in the Railbelt Integrated Resource Plan appears to be acceptable amongst the utilities.

Fire Island – Based on a June 10 press release, Chugach Electric Association (CEA) and Cook Inlet region, Inc. (CIRI) have come to terms on wind energy output from the Fire Island Project. CEA has agreed to pay CIRI a net cost of $97.00 per MWh for 25 years beginning December 31, 2012. The proposed power purchase agreement will require Regulatory Commission of Alaska (RCA) approval.

Bernice Lake Generation –Chugach Electric Association’s (CEA) board of directors has approved the sale of the Bernice Lake Generation Facility located in Nikiski to AEEC. At this time negotiation of final documents is substantially complete, but the documents have not been executed. Although HEA/AEEC and CEA have agreed to the sale, the final sales transaction is contingent on several things including approval from the Regulatory Commission of Alaska (RCA). Assuming the asset sale takes place, the roughly 67 MW facility will be used to supplement the peaking and backup generation planned for Soldotna. The Bernice Lake generation does not replace the current LM6000 [single cycle gas turbine generator] scheduled for the Soldotna site. [Hopefully this will eliminate future purchase of a second turbine for Soldotna, however.]

HEAMF clarification notes and comment were added in [brackets]. HEA Manager's reports can be downloaded from the HEA website at http://www.homerelectric.com/BoardofDirectorsElections/BoardMeetingInformation/ManagersReports/tabid/222/Default.aspx. 

Election and Meeting Reminder

A Final Reminder!

2011 Annual HEA Meeting of the Members

Thursday, May 5 at Soldotna High School
Registration 4:30 PM - 6:30 PM, Membership Meeting Starts 6:00 PM

Don't Forget to Vote
District 1: incumbent David Thomas of Kenai
District 2: Dick Waisanen of Soldotna
District 3: Malcolm Gaylord of Homer

HEA must receive mail-in ballots by 4:00 PM, May 4. Members can also vote at the Annual Meeting but need to register there first. 

Where is Soldotna High?
425 W. Marydale Ave. Soldotna, AK 99669
907-262-7411 

Check out the Google map:
http://high-schools.com/schools/8791/soldotna-high-school.html

Turn west on Maydale Dr. from N. Binkley St. or the Kenai Spur Highway. Continue west to Sohi Ln. and you should be able to see the school. If you come to Ridgewood Dr. or River Watch Dr. you've gone to far.

HEAMF Election Update

HEA Board of Directors Election Ballots will be mailed to members on Friday.  Your vte is vitally important.  We believe these superior candidates deserve your support:

David Thomas
(District 1: Kenai, Nikiski, parts of Soldotna area)

Dick Waisanen
(District 2: Soldotna, Sterling, part of Kasilof)

Malcolm Gaylord
(District 3: part of Kasilof and south to Kachemak Bay area)

For too many years our electric coop Board was pretty much a closed club simply because few HEA members took much interest. Most didn’t even bother to vote on who would represent them. Consequently, members were provided little information and management did pretty much what it wanted, decisions rubber stamped by the Board. We believe that cost us all a lot of money in the form of higher rates and questionable management practices and almost entangled us in the failed Healy 2 coal plant.

Things have improved since then. The Healy 2 debacle opened a lot of eyes and encouraged many HEA members to speak out for more open governance and better accountability. Over the last three or four years almost all new people have come to serve on the HEA Board of Directors. Communication with the membership is getting better.

But there’s still room for improvement. After Healy 2, the largest change in HEA history was made without significant input from the membership. The Independent Light project committed us to converting our Distribution Cooperative into a Generation and Transmission Cooperative, $180 million in new debt, and continuing dependence on natural gas. Its merits or flaws aside, such a huge change should have been proposed and explained to HEA members in advance and approved or rejected by their vote.

Let’s keep moving toward more open governance and better member involvement by electing Directors truly dedicated to member control -- people capable of independent thinking who will not simply follow management’s lead.

Vote for

David Thomas (District 1) Dick Waisanen (District 2) Malcolm Gaylord (District 3)

HEA Members Forum Update

January HEA/AEEC Meetings
These meetings will take place in Kenai at the Central Peninsula Offices, 280 Airport Way. Video conferencing is available in the Homer Offices at 3977 Lake Street.

Tuesday, January 18, 2011 (tentative)
10:00 AM -- Operations and Special Projects

1:00 PM -- Finance Committee
3:00 PM -- AEEC Board Meeting
5:30 PM -- HEA Board Meeting

Check for meeting calendar updates and draft agendas on the HEA website at http://www.homerelectric.com/BoardofDirectorsElections/BoardMeetingInformation/Agendas/tabid/220/Default.aspx.

No More Secrets for Now
Last November HEA/AEEC filed a petition with the Regulatory Commission of Alaska to classify it’s 2010 Equity Management Plan as confidential. This would keep a lot of information about how the coop conducts business out of the hands of HEA members -- or anyone else for that matter. Several HEA members followed up with a request for a stay pending resolution of a previously filed informal complaint. On December 17, 2010 the RCA denied the HEA/AEEC petition for confidentiality (U-10-85, Order No. 2). The coop may reapply if willing to supply meaningful justification for such blanket confidentiality.

HEA/AEEC Rate Plan on Hold
The proposed new rate design was filed with the RCA on November 9, 2010. Under the plan, the present $11.00 monthly residential customer charge would increase to $15.00 and a minimum monthly 150 kWh energy charge would be added. After receiving 22 public comments, all but one opposing the plan, the RCA suspended the HEA/AEEC request for approval (Order U-10-97, Order No. 1). The December 17, 2010 stay requires HEA/AEEC to submit a brief addressing how the proposed “minimum energy charge” complies with relevant Alaska Administrative Code. It also schedules further investigation, invites petitions to intervene from interested parties and participation by the Attorney General, and appoints an administrative law judge to conduct the docket. The deadline for petitions to intervene is 4 p.m., January 18, 2011. A prehearing scheduling conference for the matter will be held in the Commission’s East Hearing Room at 9 a.m. on February 4, 2011. Go to the RCA website at http://rca.alaska.gov/RCAWeb/Entity/EntityDetails.aspx?id=883fd287-5437-45c3-ac93-6611db2d87b0 for documents relating to HEA/AEEC.

WPCRA vs. COPA -- Say What?
Given the RCA stay of HEA/AEEC’s proposed rate plan this might be moot but here goes anyway. One of the complaints against the rate plan was a move to replace the Wholesale Power Cost Rate Adjustment (WPCRA) with a Cost of Power Adjustment (COPA). Remember, the WPCRA is that fluctuating cost HEA has to pay for energy, mostly reflecting the price of natural gas. It’s passed through to you. According to a December 6, 2010 letter from RCA staff, unlike the WPCRA, the COPA would allow HEA/AEEC to change rates associated with fuel and purchased power absent the normal RCA rate proceeding. It looks like going to the COPA would result in an instant rate increase as well. When the new rate plan was presented to HEA members the WPCRA was less than one cent (.00715) per kWh. The figure given for the COPA under the new plan was 2.862 cents per kWh -- much higher. What extra things does it include? While this information has been requested many times, there has as yet been no side-by-side comparison of these two computations. HEA’s Joe Gallagher is trying to get this for us but has so far been unable to deliver.

Independent Light $$
Phase One of the Independent Light project, upgrade of the Nikiski plant, is proceeding as planned according to the December 14, 2010 update from the HEA/AEEC engineering staff. At that time design work was 90 percent complete and construction bids were expected to go out last month. A contract should be awarded in February 2011, work should be completed by 2012, and the new steam turbine should be in commercial operation by the 4th quarter of that year. This upgrade is expected to improve efficiency of the plant by 40 percent without burning any extra fuel, allowing it to generate most of the baseload requirements for the HEA/AEEC service area.

Phase Two of the project, addition of new gas generation facilities at Soldotna to supply “peaking” and reserve energy, is moving forward as well. Additional property has been purchased at the old “Soldotna 1” site, Stanley Consultants was awarded a contract for up to $3,300,000 for facility design, and purchase of one gas turbine generator for approximately $22,700,000 was authorized. HEA/AEEC Directors declined to authorize purchase of two units as originally envisioned by management. Discussion of the enabling resolution (10-34) indicated that some Directors have misgivings about investing so much money in new natural gas hardware and would like to investigate other renewable energy sources. This decision will be revisited in the near future.

Cook Inlet Natural Gas Storage Alaska (CINGSA)
With diminishing Cook Inlet natural gas supplies, keeping the heat and lights on during winter cold snaps is becoming iffy. This is a growing concern for HEA/AEEC, especially with at least one new gas turbine slated for Soldotna. As a partial solution, CINGSA proposes an underground storage facility in Kenai to hold natural gas during times of low demand and then withdraw the gas during peak demand (winter). At the December 14, 2010 HEA/AEEC meetings AEEC Resolution 10-31 was approved authorizing HEA General Manager Janorschke to sign a contract committing HEA/AEEC as a customer of the CINGSA project. Other CINGSA customers include Enstar, Municipal Light and Power of Anchorage, and Chugach Electric Association. If the project is successfully developed HEA/AEEC commits to a 20-year contract. The coop would pay monthly fees for its share of storage capacity and the amounts of gas it injects or withdraws. It will also need to supply (purchase) gas and pay for the energy used to inject or withdraw it. There will be added charges if amounts of gas stored, injected, and withdrawn exceed that allowed by the contract. While speculative, estimates of cost to HEA/AEEC range between $900,000 and $1,988,000 per year.


AEEC Board Meeting Minutes and Voting Record
A small concession was won at the December 14, 2010 HEA/AEEC meetings. In response to a HEAMF request, Directors approved a motion to start posting Alaska Electric and Energy Cooperative Board meeting minutes on the HEA website as is already done for HEA Board meetings. This is important because the minutes contain a record of how Directors vote on various resolutions. It’s one way for HEA members to evaluate Director performance and make good decisions at annual Board elections. But more needs to be done.

Since inception in 2002 the AEEC has been more or less invisible to HEA members. There is little information provided on the HEA website -- only meeting notices and agendas. Considering that the present conversion from a distribution utility to a generation &transmission utility is likely the largest, most costly event in our coop’s history and is being accomplished primarily through the AEEC, this seems like a significant omission. For some time we have requested that HEA fully disclose and explain to members the HEA/AEEC relationship. This should include posting of AEEC organizational documents such as bylaws, Board policies, Board member information, and other pertinent materials on the HEA website -- or on a new AEEC site. HEA members are not also AEEC members. AEEC has no debt limit. Consequently, it should be made clear how HEA members can have a voice in AEEC affairs, what measures are in place to prevent unlimited borrowing through the AEEC, and what checks and balances preclude bad decisions by those who conduct AEEC business.

HEA Members Forum Update

Last Chance to Comment on the New HEA Rate Plan
The new HEA rate plan was filed with the Regulatory Commission of Alaska on November 2, 2010. It is undergoing a 45-day review by RCA staff. At the end if this period (around December 17) staff will present recommendations to Commissioners and a docket will be open for further investigation. This will likely include a 20-day public review process. Watch for notice of this if you have concerns or suggestions about the proposed rate plan that you would like to bring before the RCA.

Weigh in on New Energy Efficiency Standards
The RCA is considering adoption of new amendments to the Public Utilities Regulatory Policies Act which are intended to encourage energy efficiency, among other things. As might be expected, the RCA staff suggests against adopting the federal standards but does propose some modest increase in state regulatory support for energy efficiency. You have until December 9 to submit comments. See the attached summary for more information and go to the source at http://rca.alaska.gov/RCAWeb/Dockets/DocketDetails.aspx?id=ccbcfb40-5010-41c7-af3d-d2e42b57241d.



Independent Light -- Not the Brightest Bulb
Through it’s shadow corporation, the Alaska Electric and Energy Cooperative, Inc., HEA approved spending another $4.5 million on equipment and design engineering services for the Nikiski facility and old Soldotna 1 site. Most of this, $3.3 million, went to the latter. For the most part people see the logic in spending money to improve efficiency of the Nikiski plant. But to many, in a situation where the natural gas supply is questionable, spending millions on new stand-by gas turbines for Soldotna seems like a bad choice. All the more so, given that Anchorage Municipal Light & Power offered a power purchase agreement that one HEA Board member reputedly deemed “a pretty good deal.” As one former HEA electrical engineer recently pointed out, it’s unlikely we can ever recover the cost of new Soldotna turbines. With no one but ourselves to sell power to, they will stand idle most of the time and never generate revenue.

Alaska Railbelt Cooperative Transmission and Energy Company (ARCTEC)
HEA and other railbelt utilities continue to work on draft articles of incorporation for this potential confederation aimed at improved collaboration. The stated intent is to improve prospects for dealing with natural gas supply problems, better address transmission issues, and pursue utility scale alternative energy opportunities. According to HEA General Manager Brad Janorschke, utilities hope to come to agreement and file the articles by the end of this month (November). We agree that better collaboration will be needed to effectively meet railbelt energy needs in the coming years. Such efforts are to be commended, assuming that ratepayer interests are being taken into consideration. Unfortunately, as is so often the case, this process is being conducted behind closed doors.

Renewable Double Speak
While all of the HEA Directors say they favor adding more renewable energy sources to our energy mix, General Manager Janorschke has joined with other railbelt utility managers in signing the attached letter to the RCA and legislative leaders complaining that integrating renewable energy into the existing generation scheme is just too difficult. While the letter claims it isn’t a rejection of renewable technologies, it sure comes out reading like one. These utilities have failed to work with each other or potential independent power producers like Fire Island Wind (CIRI) or Kenai Winds to find ways to overcome integration challenges. HEA has committed to spending $180 million (plus) on natural gas generation but only $2-3 million on a single, very controversial, small hydroelectric project and not a dime on technology to balance fluctuations from wind generators. Railbelt utilities predict potentially high costs associated with integrating renewable energy but think nothing of increasing our dependency natural gas, even if we need to import it in liquefied form from outside. Wonder what that’s going to cost?



December HEA/AEEC Meetings
These meetings will all take place in Kenai at the Central Peninsula Offices, 280 Airport Way.

Tuesday, December 7, 2010
2:00 PM -- Operations and Special Projects

Tuesday, December 14, 2010
1:00 PM -- Finance Committee
3:00 PM -- AEEC Board Meeting
5:30 PM -- HEA Board Meeting

Download draft agendas at http://www.homerelectric.com/BoardofDirectorsElections/BoardMeetingInformation/Agendas/tabid/220/Default.aspx. Video conferencing is available in the Homer Offices at 3977 Lake Street -- call either HEA office at 283-5831 (Kenai) or 235-8551 (Homer).

This Week's HEA/AEEC Meetings

These meetings will take place in Kenai at the Central Peninsula Offices, 280 Airport Way.

Tuesday, September 14, 2010
9:00 AM -- Operations and Special Projects
1:00 PM -- Finance Committee
3:30 PM -- AEEC Board Meeting
5:30 PM -- HEA Board Meeting

Download draft agendas at http://www.homerelectric.com/BoardofDirectorsElections/BoardMeetingInformation/Agendas/tabid/220/Default.aspx.
Video conferencing is available in the Homer Offices at 3977 Lake Street.

Next Week's Area Meetings
The proposed new rate structure will be the main focus of the General Manager's presentation.

Anchor Point, 5:30 PM, Monday September 27, Chapman School
Kasilof, 5:30 PM, Tuesday September 28, Tustumena School
Sterling, 5:30 PM, Wednesday September 29, Senior Center
Nikisiki, 5:30 PM, Thursday September 30, Community Center

These meetings are typically a venue for HEA management to express it's point of view in a controlled situation, absent divergent outlooks. Free food and the promise of drawing prizes seem to be uppermost in attending HEA members' minds. Nonetheless, it is an opportunity for you to raise questions and express your own opinions regarding any HEA issue.

August HEA Meeting Schedule

All meetings will take place in the Board room of the HEA offices in Homer at 3977 Lake Street. Video conferencing is available at the HEA offices in Kenai at 280 Airport Way. Meeting agendas can be found on the HEA website at http://www.homerelectric.com/. Contact Joe Gallagher at jgallagher (email at) homerelectric.com or 907-283-2324 for more information.

Tuesday, August 17, 2010
10:00 AM -- HEA Operations Committee Meeting
12:30 PM -- HEA Finacne Committee Meeting
3:00 PM -- AEEC Board Meeting
5:30 PM -- HEA Board Meeting

Wednesday, August 18, 2010
9:00 AM Final Ratemaking Presentation by Consulting Firm RW Beck

Rate Design Process

Attached is HEA General Manager Brad Janorschke's announcement of the the rate design process along with a related discussion of some of the things to be considered in designing a sound rate structure. Don't forget about this week's informational workshop -- open to the membership.

Wednesday, July 14, 10:00 AM, Homer HEA offices -- R.W. Beck Rate Making Workshop
For video conferencing to Kenai HEA Offices contact Teresa Gamble at
tgamble ( email@ ) homerelectric.com

Rate Design Article

HEA Members Forum Update

Rate Creep
On July 1 rates go up .154 of a cent per kWh. According to HEA that's about 97 cents a month for the "average" member. That's better than the 2 percent increase we were expecting -- stay tuned for that one.

Secret Rate Redesign Process
The HEA Board and management have started the process of redesigning how your electric rates are computed. This summer HEA Directors will have "how to" workshops and background documents on the subject. Unfortunately HEAMF requests to participate in the learning process were turned down. In e-mail and telephone contacts with several HEA Directors we urged that the wider membership be informed of this process and provided an overview of what it’s about and how it will unfold. So far management and most Directors don't seem to want ordinary HEA members involved. One thing under review for sure will be the "customer charge." That's the monthly fee all HEA members pay for just being connected to the system. Management has already advised Directors that the present charge is way too low and needs to be increased.

Alternative Energy Smackdown
In his wisdom Governor Parnell vetoed money the Legislature allocated for community natural gas and alternative energy projects for our state. Among these was the $7 million grant for HEA to utilize wind power from the 14.4 MW Kenai Winds project being pursued by APEX energy. Unfortunately for us, at the June 1 special Board meeting HEA General Manager Brad Janorschke told Directors we should give up altogether on trying to integrate wind energy without the $7 million.

Small Hydro Pumpup
On June 1 a special meeting of the HEA Board was sandwiched between the Alaska Electric & Energy Cooperative(AEEC) and HEA Operations Committee meetings to consider Resolution 10-25, allocation of $2 million from the HEA budget for site studies and completion of the Federal Energy Regulatory Commission (FERC) construction permit application process. After a presentation by HEA engineering staff and several minutes of Board discussion the resolution was approved. This came out of the blue with little or no advance notice -- HEA members and organizations with strong interest in the project such as the Kenai Watershed Forum were not made aware of the resolution. If approved, construction cost is estimated at $30 million and the project would produce about 4.5 MW of electricity. Questions remain regarding potential negative impacts to fish and habitat.

Next Week’s HEA Meetings
Tuesday June 15, 2010, Homer HEA Offices (video conferencing available from the Kenai offices).

Closed Board Workshop 12 Noon
Finance Committee Meeting 3:00 PM
Full Board Meeting 5:30 PM

Agendas have not been posted on the HEA website at this writing. Go to the following pages within the next several days to look for meeting and agenda information.
http://www.homerelectric.com/BoardofDirectorsElections/BoardMeetingInformation/Agendas/tabid/220/Default.aspx
http://www.homerelectric.com/BoardofDirectorsElections/MeetingCalendar/tabid/240/Default.aspx

HEAMF Call in Reminder

DON'T FORGET!!! CALL THE COFFEE TABLE PROGRAM
KBBI/KDLL this Wednesday, May 19 at 9:00 AM

The focus will be all things HEA with guests HEA General Manager Brad Janorschke and Public Relations Coordinator Joe Gallagher.

Call 235-7721 on the southern peninsula, 1-800-979-7405 from elsewhere.

ASK QUESTIONS
TELL THEM WHAT YOU WANT AS AN HEA MEMBER

1. ANTI-COOPERATIVE PRACTICES
Why were HEA members excluded from the planning of the Independent Light project?

Shouldn’t the HEA membership be given a chance to approve, modify, or reject this historic change?

Shouldn’t HEA members have more opportunities for planning and approving or rejecting other proposed projects such as small hydroelectric and wind?

Was the Alaska Electric and Energy Cooperative (AEEC) formed with approval of the HEA membership or simply by the HEA Board and staff?

2. ALASKA ELECTRIC & ENERGY COOPERATIVE (AEEC)
Is it true that HEA members are not also AEEC members? Who is an AEEC member?

Who runs AEEC?

Who is AEEC responsible to?

Does the HEA Tariff also apply to AEEC or does it have it’s own?

3. LEVEL OF DEBT
Is it true that the combined HEA/AEEC debt is or soon will be at $339 million.

Is it true that AEEC is not bound by the $450 million HEA debt cap and has no such limit of its own?

Will $180 million cover all elements of the Independent Light project or will additional debt be required? If more, how much?

How will payment toward interest and debt retirement affect electric rates?

4. INDEPENDENT LIGHT AND OTHER PROJECTS
HEA management asserts that “studies indicate that the cost for HEA to own and operate the new assets will be about the same (perhaps slightly lower) as paying another utility for wholesale power.” Where can HEA members review these studies?

Even though the decision was made without their input, most HEA members seem to support upgrading the Nikiski plant. However, many question the wisdom of buying new gas turbines for Soldotna as the best way to meet peaking, reserve, and contingency demand. Would you be willing to bring the wider HEA membership into the decision process now?

If we invest hundreds of millions in Nikiski AND new gas turbines to meet ALL base load, peak, and emergency demands how will we afford to buy significant amounts of renewable energy as new projects come on line?

The Legislature appropriated $7 million to fund a 5 MW reciprocating generator or a battery bank to allow HEA to integrate the 14.4 MW of power from the Kenai Winds project into the existing grid. Why won’t that solve the problem of “following” this intermittent source of energy?

Recent News

Election Disappointment
At yesterday's Annual HEA Meeting incumbent Director Tony Garcia was voted out while Board President Debbie Debnam was reelected by a substantial margin. Debnam is the last of the "old guard" Directors who favored business by executive session while promoting involvement in HEALY 2 and other coal projects. HEAMF supported her opponent Ken Hepner who favors open governance and serious efforts to increase inclusion of alternative energy sources to meet HEA load requirements. William Warren defeated Garcia. HEAMF endorsed Garcia largely because he had shown steady growth in supporting our objectives and we lacked knowledge about Warren. Subsequently, Ken Hepner and others who have known him suggest that Warren will make a good Director who will promote open governance and renewable energy. Bill Fry, the only District 3 candidate on the ballot was easily elected in spite of a write-in campaign.

Total Ballots Cast = 5,141 (23.8% of the 21,586 HEA Members)
Total Ballots Voided for Cause = 163
Total Ballots Counted = 4,978
District 1 -- Warren 918, Garcia 702, write-ins 32
District 2 -- Debnam 1,215, Hepner 592, write-ins 46
District 3 -- Fry 1,350, write-ins 93

Manager's Moment
HEA General Manager Brad Janorschke presented a much better overview than the fiasco of 2009. This time he gave a decent summary of the Independent Light project, a brief discussion of the nature of AEEC (Alaska Electric & Energy Cooperative, Inc.), and provide some updated information on the Kenai Winds, Kenai Hydro, and potential large hydroelectric and geothermal projects that might one day supply railbelt energy. Theoretically, his PowerPoint presentation should be posted to the HEA website some time today (http://www.homerelectric.com/). If you want more detailed information check it out. Several things Janorschke said are worth noting here, however:

Independent Light consists of two phases.

Phase I -- HEA/AEEC has already committed to this. It involves upgrade of the Nikiski plant. Contracts have been awarded for design work ($5,017,900), a GE steam turbine ($9,420,000), and related substation upgrades($3,813,697). This phase addresses "baseload," the ongoing 40 to 70 MW consumed by all HEA members.

Phase II --This phase will address "peaking, reserve, and contingency" power sources. Additional power is needed if energy requirements exceed normal baseload capacity, should the Nikiski plant or Bradley Lake fail or be shut down for maintenance, or during unforeseen situations such as a disaster. Three options are being investigated: build new generating capacity ourselves, buy an existing plant from another utility, purchase agreements for buying power from other power producers. No commitment has yet been made to any one or combination of these.

Independent Light and efforts to adopt renewables are now linked. Janorschke said that whatever HEA/AEEC chooses for phase two of Independent Light, the administration doesn't want it to constrain our ability to adopt new or better options as they become available.

HEA Members' Moment
During his explanation of AEEC Janorschke failed to mention that HEA members are not also AEEC members and, consequently, have no rights or authority with AEEC. During the member comment period I pointed this out as something all members should be aware of. It is a significant problem considering that all decisions about Independent Light are being made by AEEC, including plans to take on over $200 million in debt to finance the project. President Debnam ask HEA attorney Rick Baldwin to elaborate on my statement but he declined, saying that no further explanation was warranted.

Another member made a motion from the floor that Board of Director expenses be published in the Kilowatt Courier from now on. I made a friendly amendment that they also be posted on the HEA website. On a vote of the assembled membership the motion and amendment were passed. If memory serves, these floor votes are considered advisory and the Board may choose to accept or reject them. Stay tuned.

HB31 MAY STILL THREATEN NET METERING

Testimony will be taken Tuesday, Feb. 23th starting at 3pm at the House Special Committee on Energy hearing on HB 31.

Last week's hearing was canceled and significant language changes made to the bill. The Amended version is attached. There are still concerns that this legislation could reduce the ability of net metering proponents to work with the RCA on future improvements to the regulations passed on January 15, 2010. The best place to deal with net metering is the RCA, not the Legislature.

If you plan to attend, please let the LIO know.

Homer Legislative Information Office
345 W Sterling Hwy, Ste 102A
Homer, AK 99603
Phone: 235-7878 Fax: 235-4008

Kenai LIO
145 Main St Lp, Ste 217
Kenai, AK 99611
(907)283-2030/phone (907)283-3075/fax

email: Kenai_Lio(email@)legis.state.ak.us

Invitation - Pizza, Refreshments, Meet & Greet

HEA Members Forum will host an informal gathering to welcome new HEA District 3 Board Directors Bill Fry and Mike Wiley. This is a chance for you to get to know your HEA representatives and discuss your feelings about the direction our coop should take.

Please join us.

5:00 PM
Friday, February 12
Homer Chamber of Commerce Visitor Center
201 Sterling Highway
Homer, AK 99603

RCA ADOPTS ALASKA NET METERING REGULATIONS

On October 14, 2009, the Regulatory Commission of Alaska (Commission) voted to adopt new regulations establishing net metering requirements for economically regulated utilities. A final version of the regulations was formally adopted on January 15, 2010.

Net metering serves as an important incentive for consumer investment in renewable energy generation. It allows a customer of a regulated utility to interconnect eligible onsite generation facilities with their electric utility's distribution system. Customer-generated electricity can then offset electricity consumption on a kilowatt-hour (kWh) basis. In general, the new regulations:

1. Apply to electric systems owned by economically regulated electric utilities with total retail sales of 5,000,000 kWh or more (that includes HEA).

2. Affected utilities are required to interconnect with eligible customer generation systems up to a system-wide total capacity of 1.5% of their average retail demand. Customer interconnection can be refused if it would cause the total net metering capacity to exceed 1.5%.

3. Eligible customer generation systems are limited to a total on-site capacity of 25 kilowatts.

4. Net metering customers are billed for net monthly consumption. If the customer uses 800 kWh and generates 600, he or she will be billed for 200 kWh.

5. When more electricity is generated during a given month than is consumed, the customer is credited for the excess at the wholesale power rate. If the customer uses 800 kWh and generates 1,000, he or she will receive a credit for 200 kWh at the wholesale rate. Credits will be applied to reduce the dollar amount of subsequent monthly billings. Credits do not expire or revert to the utility.

6. The RCA must now establish interconnection requirements for eligible customer generation systems. In early 2010 a workshop will be scheduled on RCA Matter Number: R-09-002, Consideration of the Adoption of Regulations Implementing an Interconnection Standard, to determine what these requirements will be.

7. Technologies eligible for net metering generation are limited to solar photovoltaic, solar thermal, wind, biomass, hydroelectric, geothermal, hydrokinetic, ocean thermal, landfill gas and biogas energy, along with other sources as approved by the commission that generally have similar environmental impact.

This is a good start. There are some exceptions possible as outlined in the "fine print" of the regulations and through an RCA waiver process. It will be important now to assure that the interconnection standards favor individuals and businesses wanting to install alternative energy systems. Find more information at the RCA website (http://rca.alaska.gov/RCAWeb/home.aspx/).

Self Regulation (& more)

Self Regulation
At last night's meeting the HEA Board voted to indefinitely suspend all efforts to pursue deregulation of our coop. While several Board members expressed continuing interest in looking at the option at some point in the future, all agreed this was not the time to do so. During discussion of the motion the Board acknowledged that questions raised by a number of HEA members made them realize they lacked adequate knowledge of the potential costs and benefits of "self regulation." It was also recognized that there are many more pressing priorities confronting the HEA Board and management in the coming months. Clearly, member knowledge of this issue and willingness of some to communicate questions and concerns made a difference.

Continuing HEA Website Upgrades
Also at last night's meeting the Board approved placing voting records of all Board members on the HEA website. This will be done on a "rolling" three-year basis and will include attendance and absence information. Such information can be valuable if you wish to understand the way a given policy developed and where each Board member stands on important issues. Such knowledge will be especially useful to you during Board elections.

Board Meeting Schedule Revised
The Board of Directors has reduced the number of meetings it will hold in Homer from 6 to 4. They will now meet at the Kenai offices 8 months out of the year. The reason given for this change is that they want to accommodate members from all 3 Board districts equally. One wonders how meeting 8 times in Kenai achieves this goal -- no meetings are planned within the Soldotna/Sterling district. We have been told that the Homer meetings will occur during summer months. Unfortunately, specific dates and locations are yet to be listed on the HEA website.

HEA Energy Fair
HEA will hold the second Energy and Conservation Fair in Home at the Islands and Ocean Center on Saturday, November 14, between 10 AM and 4 PM. There will be presentations, workshops, and a chance to visit with various vendors of energy and conservation goods and services. By all accounts, the first fair held last Saturday in Kenai was well attended and many participants considered it a great success.

HEA Extends Application Deadline for Board Appointments (& more)

HEA Extends Application Deadline for Board Appointments
At yesterday's HEA Operations Committee meeting the Board voted to extend the deadline to apply for the vacant seats until January 22. So far there are five names on the list of applicants. HEAMF is making an effort to learn enough about each person to recommend which seem most qualified. If you are interested in applying you must be a resident of HEA District 3. Applications are available on the HEA website (http://www.homerelectric.com/) or at HEA offices in Homer and Kenai. They must be returned by Friday, January 22, 2010 at 5 PM. Contact Teresa Gamble at 283-2334 or tgamble(email@)homerelectric.com for additional information.

Net Metering
The Net Metering Regulation adopted by the Regulatory Commission of Alaska (RCA) in October was sent to the Alaska Department of Law for review. It could be signed into law by March 2010. The next step is for the RCA to adopt regulations governing how to tie your alternative energy system to the electric grid. The RCA will probably schedule a workshop on interconnection for some time in February. Public notice must be given 30 days before the workshop. Look for Matter Number: R-09-002, Consideration of the Adoption of Regulations Implementing an Interconnection Standard, on the RCA website (http://rca.alaska.gov/RCAWeb/home.aspx).

Operation "Independent Light"
This is HEA's alternative to the Healy 2 coal plant. The plan includes adding a Steam Turbine Generator (STG) at Nikiski to take advantage of waste heat (formerly used by the now closed Agrium plant). This would greatly increase the electricity produced without burning any added fuel. In addition, a new natural gas fired generation facility would be installed in Soldotna to generate even more power. Finally, appropriate upgrades would be made to existing substations at each location. A pre-bid conference was held for interested vendors in November and bids are due back by January 15. HEA staff hopes to conduct bid evaluations and make a recommendation to the full Board by late January or early February.

None of this comes cheap. HEA will need to borrow as much as $130 million to complete all parts of this proposal. Watch for more information on this in coming updates.

Alaska Railbelt Regional Integrated Resource Plan (RIRP) Report
This study was commissioned by the Alaska Energy Authority to help assess and guide railbelt utility planning for the next 50 years. The report is long and comprehensive but, in addition to recommending that the Healy 2 plant remain mothballed, includes the following among its general recommendations:

1. The State should work closely with the utilities and other stakeholders to make a decision regarding the formation of GRETC [Greater Railbelt Energy and Transmission Company]and to develop the required governance plan, financial and capital improvement plan, capital management plan and transmission access plan, and address other matters related to the formation of the proposed regional entity.

2. The State should establish certain energy-related policies, including:
o The pursuit of large hydroelectric facilities
o DSM/EE [Demand Side Management/Energy Efficiency] program targets
o RPS (i.e., target for renewable resources), and the pursuit of wind, geothermal, and tidal...projects in addition to large hydroelectric projects
o System benefit charge to fund DSM/EE programs and or renewable projects

The whole report can be downloaded from the Alaska Energy Authority website (http://www.aidea.org/AEA/regionalintegratedresourceplan.html).

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.

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.