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
Showing posts with label press release. Show all posts
Showing posts with label press release. Show all posts
Tuesday, July 13, 2010
Tuesday, May 19, 2009
The HEA Board Needs Our Support
The May 12 vote against further participation in plans to restart the Healy 2 coal plant was both prudent and courageous.
By refusing to be manipulated into taking the risk and paying the costs for GVEA to acquire the Healy 2 plant, the HEA Board:
* Saved $47.5 million of HEA members’ money,
* Eliminated risk of significant added costs due to new mercury and CO2 emission control requirements,
* Avoided long-term electric rate hikes due to rising coal prices.
Unfortunately, the Alaska Industrial Development & Export Authority really wants to dump Healy 2 on someone else. Under a 2006 agreement with AIDEA, HEA committed to managing work required for restarting the plant. It's unclear how this will be resolved. AIDEA might use that agreement to pressure HEA to reconsider the May 12 vote. Our Board needs to know we are behind them 100% in withdrawing from Healy 2.
Please send HEA Board members a short message thanking them for their decision to drop Healy 2 and letting them know that you will stand behind them during the process of pulling out.
Alan Bute, District 1, byrdave (EMAIL @) yahoo.com or (907) 776-8115
Jose (Tony) Garcia, District 1, tonygarcia43 (EMAIL @) hotmail.com or (907) 252-7790
David B. Thomas, District 1, davidthomashea (EMAIL @) gmail.com or (907) 283-4109
Deborah Debnam, District 2, debbie (EMAIL @) debnam.com or (907) 262-9277
Tim Evans, District 2, heatde (EMAIL @) gmail.com or (907) 262-3734
Ed Oberts, District 2, eoberts (EMAIL @) gci.net or (907) 398-8039
Brian Hirsch, hirsch (EMAIL @) alaska.net or (907) 235-7164
Jim Levine, District 3, jlevine (EMAIL @) jaybrant.com, (907) 299-0323
J. Michael Pate, Mike_Pate (EMAIL @) wellsfargois.com or (907)-235-8105
HEA General Manager, bjanorschke (EMAIL @) homerelectric.com
Joe Gallagher, HEA Outreach jgallagher (EMAIL @) homerelectric.com
By refusing to be manipulated into taking the risk and paying the costs for GVEA to acquire the Healy 2 plant, the HEA Board:
* Saved $47.5 million of HEA members’ money,
* Eliminated risk of significant added costs due to new mercury and CO2 emission control requirements,
* Avoided long-term electric rate hikes due to rising coal prices.
Unfortunately, the Alaska Industrial Development & Export Authority really wants to dump Healy 2 on someone else. Under a 2006 agreement with AIDEA, HEA committed to managing work required for restarting the plant. It's unclear how this will be resolved. AIDEA might use that agreement to pressure HEA to reconsider the May 12 vote. Our Board needs to know we are behind them 100% in withdrawing from Healy 2.
Please send HEA Board members a short message thanking them for their decision to drop Healy 2 and letting them know that you will stand behind them during the process of pulling out.
Alan Bute, District 1, byrdave (EMAIL @) yahoo.com or (907) 776-8115
Jose (Tony) Garcia, District 1, tonygarcia43 (EMAIL @) hotmail.com or (907) 252-7790
David B. Thomas, District 1, davidthomashea (EMAIL @) gmail.com or (907) 283-4109
Deborah Debnam, District 2, debbie (EMAIL @) debnam.com or (907) 262-9277
Tim Evans, District 2, heatde (EMAIL @) gmail.com or (907) 262-3734
Ed Oberts, District 2, eoberts (EMAIL @) gci.net or (907) 398-8039
Brian Hirsch, hirsch (EMAIL @) alaska.net or (907) 235-7164
Jim Levine, District 3, jlevine (EMAIL @) jaybrant.com, (907) 299-0323
J. Michael Pate, Mike_Pate (EMAIL @) wellsfargois.com or (907)-235-8105
HEA General Manager, bjanorschke (EMAIL @) homerelectric.com
Joe Gallagher, HEA Outreach jgallagher (EMAIL @) homerelectric.com
Monday, May 4, 2009
Alaska Coal Workshop
Wednesday May 6th, 2009
Homer
Islands and Ocean Visitors Center 7-9 PM
Join Goldman Prize award winner Judy Bonds and acclaimed lawyer Joe Lovett as they share lessons learned from fighting the destructive impacts of coal strip mining and coal power plants in Appalachia and the Southeast United States. Bonds and Lovett will pull back the curtain on the myth of “clean coal.”
Get information and tools needed to protect our lands, waters, fisheries and sustainable jobs.
Invite family and friends along to hear these two remarkable speakers discuss the true costs of coal!
Homer
Islands and Ocean Visitors Center 7-9 PM
Join Goldman Prize award winner Judy Bonds and acclaimed lawyer Joe Lovett as they share lessons learned from fighting the destructive impacts of coal strip mining and coal power plants in Appalachia and the Southeast United States. Bonds and Lovett will pull back the curtain on the myth of “clean coal.”
Get information and tools needed to protect our lands, waters, fisheries and sustainable jobs.
Invite family and friends along to hear these two remarkable speakers discuss the true costs of coal!
Sunday, May 3, 2009
HEA Board candidate Jim Levine
HEA Board candidate Jim Levine shares HEA Members Forum’s two major objectives:
1. Replace the present policy of exclusion and secrecy by HEA Management and Board with open governance offering greater opportunity for member participation.
2. Move HEA toward a fossil fuel free grid through increased efficiency, embrace of renewable energy technology, prompt phase-out of natural gas & oil, rejection of coal, and greater collaboration with other “railbelt” utilities.
Jim also has the professional expertise and organizational experience to effectively advocate for us during HEA Board policy discussions.
If you haven’t already done so, you can vote for Jim Levine at the Annual HEA Meeting on Thursday, May 7 at Homer High School.
1. Replace the present policy of exclusion and secrecy by HEA Management and Board with open governance offering greater opportunity for member participation.
2. Move HEA toward a fossil fuel free grid through increased efficiency, embrace of renewable energy technology, prompt phase-out of natural gas & oil, rejection of coal, and greater collaboration with other “railbelt” utilities.
Jim also has the professional expertise and organizational experience to effectively advocate for us during HEA Board policy discussions.
If you haven’t already done so, you can vote for Jim Levine at the Annual HEA Meeting on Thursday, May 7 at Homer High School.
Please Attend the Annual HEA Meeting
Thursday, May 7
Homer High School
Registration 4:30 – 6:30 P.M.
Business meeting starts at 6:00 P.M.
A large number of HEA members are needed to support passage of a resolution from the floor to
limit the Board’s ability to sign any binding agreement for purchase of power from the Healy 2 coal plant.
Still haven’t voted for your HEA Board representative? You can do so at the Annual Meeting.
You must register at the beginning of the meeting in order to vote on either issue.
Homer High School
Registration 4:30 – 6:30 P.M.
Business meeting starts at 6:00 P.M.
A large number of HEA members are needed to support passage of a resolution from the floor to
limit the Board’s ability to sign any binding agreement for purchase of power from the Healy 2 coal plant.
Still haven’t voted for your HEA Board representative? You can do so at the Annual Meeting.
You must register at the beginning of the meeting in order to vote on either issue.
Friday, February 13, 2009
Feb 11 HEA Press Release - Homer Electric to Study Power Supply Options
HEA
3977 Lake Street, Homer, AK 99603 (907) 235-8167
280 Airport Way, Kenai, AK 99611 (907) 283-5831
PRESS RELEASE - February 11, 2009
Homer Electric to Study Power Supply Options
The Homer Electric Board of Directors will be seeking proposals from power supply consultants to evaluate all possible power generation sources that may be available to the cooperative. The decision was made at the February 10th board meeting, following nearly two hours of comments from Homer Electric members.
The goal of the independent, third-party study will be to provide the HEA board with a complete cost-benefit analysis of different generation sources including natural gas, coal, and various types of renewable energy.
The study will be coordinated by the Homer Electric Board of Directors, with input from three members of the cooperative. The board will select a member from each of the three districts in the cooperative to participate in the design and implementation of the power supply study.
Board President Debbie Debnam said the results of the power supply study will be critical to determining HEA’s future power generation decisions.
"The Homer Electric board is committed to finding a mix of generation sources that will provide our members with reliable, affordable energy. We need to know, as best as possible, what the choices are and what each of them will mean to our rates. This study will give us direction on how to proceed with some very important decisions," said Debnam.
The timeline for completion of the power supply study is approximately six months, although it is possible it could be completed earlier.
There were several comments at Tuesday night’s board meeting regarding the possibility of Homer Electric purchasing power from the Healy Clean Coal Project (HCCP).
Homer Electric recently approved a Term Sheet with the state’s Alaska Industrial Development and Export Authority and Golden Valley Electric Association to purchase half of the power from HCCP, but a binding Power Sales Agreement has not been negotiated.
"The goal of the power supply study is to find out what our best options are. The study will consider all factors involved in power production, including possible future fuel costs, regulatory issues, reliability, and most importantly, the impact it will have on the rates paid by our members," said Debnam.
Debnam said the board hopes to be able to send out a request of proposals for a power supply study by the end of February.
For additional information regarding this press release, please contact Joe Gallagher, HEA public relations coordinator, at 907-283-2324
3977 Lake Street, Homer, AK 99603 (907) 235-8167
280 Airport Way, Kenai, AK 99611 (907) 283-5831
PRESS RELEASE - February 11, 2009
Homer Electric to Study Power Supply Options
The Homer Electric Board of Directors will be seeking proposals from power supply consultants to evaluate all possible power generation sources that may be available to the cooperative. The decision was made at the February 10th board meeting, following nearly two hours of comments from Homer Electric members.
The goal of the independent, third-party study will be to provide the HEA board with a complete cost-benefit analysis of different generation sources including natural gas, coal, and various types of renewable energy.
The study will be coordinated by the Homer Electric Board of Directors, with input from three members of the cooperative. The board will select a member from each of the three districts in the cooperative to participate in the design and implementation of the power supply study.
Board President Debbie Debnam said the results of the power supply study will be critical to determining HEA’s future power generation decisions.
"The Homer Electric board is committed to finding a mix of generation sources that will provide our members with reliable, affordable energy. We need to know, as best as possible, what the choices are and what each of them will mean to our rates. This study will give us direction on how to proceed with some very important decisions," said Debnam.
The timeline for completion of the power supply study is approximately six months, although it is possible it could be completed earlier.
There were several comments at Tuesday night’s board meeting regarding the possibility of Homer Electric purchasing power from the Healy Clean Coal Project (HCCP).
Homer Electric recently approved a Term Sheet with the state’s Alaska Industrial Development and Export Authority and Golden Valley Electric Association to purchase half of the power from HCCP, but a binding Power Sales Agreement has not been negotiated.
"The goal of the power supply study is to find out what our best options are. The study will consider all factors involved in power production, including possible future fuel costs, regulatory issues, reliability, and most importantly, the impact it will have on the rates paid by our members," said Debnam.
Debnam said the board hopes to be able to send out a request of proposals for a power supply study by the end of February.
For additional information regarding this press release, please contact Joe Gallagher, HEA public relations coordinator, at 907-283-2324
Saturday, January 31, 2009
HEA Healy Editorial
AN OPEN LETTER TO HEA MEMBERS REGARDING THE HEALY CLEAN COAL PROJECT (A similar letter was delivered earlier to representatives of Homer Electric Members Forum in response to questions about the Healy Clean Coal Project.)
To Homer Electric Members:
One of the principles of a cooperative is member participation and there is no doubt that Homer Electric is committed to that ideal. Recently, there has been much discussion, sometimes heated, about a decision to restart the Healy Clean Coal Project (HCCP). This discussion comes at the same time that Homer Electric members are feeling the effects of significant rate increases. While we may not have consensus on how to move forward with the Healy Clean Coal Project, there is no doubt in my mind that all involved have the same goal: reliable energy at an affordable price. The following is a synopsis of Homer Electric’s involvement with the Healy Clean Coal Project. As with any large project, there are some unanswered questions, but the following is what we know at this time.
BACKGROUND
Let me begin by telling you that it is HEA’s mission to provide its own independent generation starting in January, 2014. This means that in less than five years, HEA will have to obtain or construct approximately 70-80 MWs of new generation. In achieving this goal, HEA is seeking to diversify its generation portfolio to reduce our dependence on natural gas and the volatility associated with the pricing of this fuel source. To this end, HEA is pursuing renewable energy generation alongside more traditional generation technology, such as coal-fired power production.
Given HEA’s relatively short time to acquire new generation, HCCP has the advantage of being an existing facility. Upon acquiring HCCP from the Alaska Industrial Development and Export Authority (AIDEA), Golden Valley Electric Association (GVEA) expects to bring the facility online in approximately eighteen months to two years. GVEA has given HEA the opportunity to purchase, at cost, up to 50% of the power it generates from the plant. The contract to purchase power from GVEA will satisfy a portion of HEA’s need for new generation and will fulfill the goal of diversifying our generation portfolio. In the larger view, the GVEA transaction would provide approximately 22.5% of the 120-130 MWs of capacity that HEA will require in 2014.
A significant advantage to the GVEA transaction is that it provides HEA with needed capacity but requires no new capital (debt or equity) from HEA. According to HEA’s current power supply study, without the capacity provided by GVEA, HEA would strain its borrowing ability in order to acquire sufficient additional resources. As a result, HEA would not have the capital to use on other energy sources; including developing its own renewable opportunities.
TECHNOLOGY
HCCP was originally designed to burn “waste” coal, essentially a very low BTU content coal that contained a significant amount of impurities that caused undue wear and tear on the system. Complications associated with burning “waste” coal were at the heart of the dispute between GVEA and AIDEA. In spite of burning “waste” coal, the original HCCP did operate successfully for almost two years at full generation capacity. By contrast, when HCCP is restarted it will burn higher quality coal and will no longer try to burn “waste” coal.
As originally designed, HCCP employs an advanced slagging combustor technology that enables burning of the coal in stages to minimize the formation of nitrogen and sulfur oxides. Emissions are further reduced by injection of limestone downstream of the combustion process in conjunction with a Spray Dryer Absorber (SDA). At the time of its conception, it was on the leading edge of technology.
In preparation for restarting HCCP, HEA and AIDEA selected a nationally known engineering firm (Shaw) specializing in coal-fired power plants to perform a comprehensive assessment detailing all work necessary to restart HCCP. Shaw identified systems and tasks that needed modifications and updates prior to restart, but was confident that the plant could be successfully restarted and operated safely and reliably. Through Shaw’s comprehensive assessment of the present status of the plant, we are confident that the plant can be operated successfully.
REGULATIONS
HEA is aware that future regulations will likely affect HCCP; however, these regulations will take several years to develop and implement. In addition, future regulations can and will affect other forms of generation. The Environmental Protection Agency’s (EPA’s) latest attempt at regulating mercury emissions failed in the courts and the EPA is working on a redraft of these regulations. Under the failed regulations, HCCP would likely have qualified as a “low mass emitter” and would not have been required to implement any mercury removal technology. We are fortunate that Usibelli coal is relatively low in mercury content compared with Lower 48 sources of coal. Future regulations would have some impact on coal-fired generation, and perhaps other fossil fuel generation as well, but that impact is a matter of speculation at this time. What is likely to happen is that HCCP will operate, with or without HEA participation, under its existing permits.
Technology and equipment does exist for removing mercury from stack emissions. These technologies are effective and efficient and, if necessary, HEA is confident that mercury removal would not cause an unacceptable increase in the price of power out of HCCP.
On the subject of greenhouse gas emissions, HEA is aware that there may be future regulations. The technology to capture and sequester greenhouse gases is in its early developmental stage and a proven technology has not emerged. How any regulations, if implemented, might affect HCCP in the future is not known and HEA cannot quantify the cost of these regulations at this time. One must also recognize that if HCCP is not used to generate the required energy, that energy would be replaced with the use of gas fired generation. Gas fired generation, although it does not have as large a carbon footprint as coal, still has a significant impact on the total amount of emissions. Diversity of location and diversity of sources can only assist in making the emissions impact as small as possible. In a perfect world there would be a source that we could depend on for the base load energy requirements of our members that would have little or no carbon footprint. Unfortunately, that technology is not available at this time.
COAL PRICES
While coal is a non-renewable resource, Alaska is blessed with an abundance of coal resources. In fact, the source for HCCP’s coal (Usibelli Mine) is located in Healy and is expected to last at least 150 years, which is well beyond the expected life of HCCP. HEA, and our experts, expect less volatility in the price of coal than from other fuels such as gas or oil. While the price of coal will reflect the current economic conditions and trends, coal is insulated from radical price fluctuations because of the terms and long duration of typical coal purchase contracts. While coal may never be as cheap as state or federally subsidized hydroelectric power, it is not likely to exceed the price of natural gas or oil fired generation. Hence, HEA expects that HCCP will, over the long term, provide a stabilizing influence on our price of power. Again, this perfectly matches HEA’s strategy of balancing its generation portfolio to achieve stable long term rates for our members.
Your HEA Board and management are doing their best to bring HEA ratepayers the most cost effective and stable power possible. This challenge involves balancing a complex blend of interests, relationships and technologies. By agreeing to equally share both the cost and power output from HCCP with GVEA, HEA is effectively splitting any future risk for its members.
I appreciate the interest and concerns of all HEA members and hope this information will give you confidence that the HEA Board is making the best possible decision based upon solid engineering recommendations with due consideration given to future risks. While you may not be completely in support of the HCCP project, I hope you will find reason to support the Board’s action in delivering a project that provides diversity and long term stability to our average price for power.
Sincerely,
Brad Janorschke
General Manager
Homer Electric Association, Inc.
To Homer Electric Members:
One of the principles of a cooperative is member participation and there is no doubt that Homer Electric is committed to that ideal. Recently, there has been much discussion, sometimes heated, about a decision to restart the Healy Clean Coal Project (HCCP). This discussion comes at the same time that Homer Electric members are feeling the effects of significant rate increases. While we may not have consensus on how to move forward with the Healy Clean Coal Project, there is no doubt in my mind that all involved have the same goal: reliable energy at an affordable price. The following is a synopsis of Homer Electric’s involvement with the Healy Clean Coal Project. As with any large project, there are some unanswered questions, but the following is what we know at this time.
BACKGROUND
Let me begin by telling you that it is HEA’s mission to provide its own independent generation starting in January, 2014. This means that in less than five years, HEA will have to obtain or construct approximately 70-80 MWs of new generation. In achieving this goal, HEA is seeking to diversify its generation portfolio to reduce our dependence on natural gas and the volatility associated with the pricing of this fuel source. To this end, HEA is pursuing renewable energy generation alongside more traditional generation technology, such as coal-fired power production.
Given HEA’s relatively short time to acquire new generation, HCCP has the advantage of being an existing facility. Upon acquiring HCCP from the Alaska Industrial Development and Export Authority (AIDEA), Golden Valley Electric Association (GVEA) expects to bring the facility online in approximately eighteen months to two years. GVEA has given HEA the opportunity to purchase, at cost, up to 50% of the power it generates from the plant. The contract to purchase power from GVEA will satisfy a portion of HEA’s need for new generation and will fulfill the goal of diversifying our generation portfolio. In the larger view, the GVEA transaction would provide approximately 22.5% of the 120-130 MWs of capacity that HEA will require in 2014.
A significant advantage to the GVEA transaction is that it provides HEA with needed capacity but requires no new capital (debt or equity) from HEA. According to HEA’s current power supply study, without the capacity provided by GVEA, HEA would strain its borrowing ability in order to acquire sufficient additional resources. As a result, HEA would not have the capital to use on other energy sources; including developing its own renewable opportunities.
TECHNOLOGY
HCCP was originally designed to burn “waste” coal, essentially a very low BTU content coal that contained a significant amount of impurities that caused undue wear and tear on the system. Complications associated with burning “waste” coal were at the heart of the dispute between GVEA and AIDEA. In spite of burning “waste” coal, the original HCCP did operate successfully for almost two years at full generation capacity. By contrast, when HCCP is restarted it will burn higher quality coal and will no longer try to burn “waste” coal.
As originally designed, HCCP employs an advanced slagging combustor technology that enables burning of the coal in stages to minimize the formation of nitrogen and sulfur oxides. Emissions are further reduced by injection of limestone downstream of the combustion process in conjunction with a Spray Dryer Absorber (SDA). At the time of its conception, it was on the leading edge of technology.
In preparation for restarting HCCP, HEA and AIDEA selected a nationally known engineering firm (Shaw) specializing in coal-fired power plants to perform a comprehensive assessment detailing all work necessary to restart HCCP. Shaw identified systems and tasks that needed modifications and updates prior to restart, but was confident that the plant could be successfully restarted and operated safely and reliably. Through Shaw’s comprehensive assessment of the present status of the plant, we are confident that the plant can be operated successfully.
REGULATIONS
HEA is aware that future regulations will likely affect HCCP; however, these regulations will take several years to develop and implement. In addition, future regulations can and will affect other forms of generation. The Environmental Protection Agency’s (EPA’s) latest attempt at regulating mercury emissions failed in the courts and the EPA is working on a redraft of these regulations. Under the failed regulations, HCCP would likely have qualified as a “low mass emitter” and would not have been required to implement any mercury removal technology. We are fortunate that Usibelli coal is relatively low in mercury content compared with Lower 48 sources of coal. Future regulations would have some impact on coal-fired generation, and perhaps other fossil fuel generation as well, but that impact is a matter of speculation at this time. What is likely to happen is that HCCP will operate, with or without HEA participation, under its existing permits.
Technology and equipment does exist for removing mercury from stack emissions. These technologies are effective and efficient and, if necessary, HEA is confident that mercury removal would not cause an unacceptable increase in the price of power out of HCCP.
On the subject of greenhouse gas emissions, HEA is aware that there may be future regulations. The technology to capture and sequester greenhouse gases is in its early developmental stage and a proven technology has not emerged. How any regulations, if implemented, might affect HCCP in the future is not known and HEA cannot quantify the cost of these regulations at this time. One must also recognize that if HCCP is not used to generate the required energy, that energy would be replaced with the use of gas fired generation. Gas fired generation, although it does not have as large a carbon footprint as coal, still has a significant impact on the total amount of emissions. Diversity of location and diversity of sources can only assist in making the emissions impact as small as possible. In a perfect world there would be a source that we could depend on for the base load energy requirements of our members that would have little or no carbon footprint. Unfortunately, that technology is not available at this time.
COAL PRICES
While coal is a non-renewable resource, Alaska is blessed with an abundance of coal resources. In fact, the source for HCCP’s coal (Usibelli Mine) is located in Healy and is expected to last at least 150 years, which is well beyond the expected life of HCCP. HEA, and our experts, expect less volatility in the price of coal than from other fuels such as gas or oil. While the price of coal will reflect the current economic conditions and trends, coal is insulated from radical price fluctuations because of the terms and long duration of typical coal purchase contracts. While coal may never be as cheap as state or federally subsidized hydroelectric power, it is not likely to exceed the price of natural gas or oil fired generation. Hence, HEA expects that HCCP will, over the long term, provide a stabilizing influence on our price of power. Again, this perfectly matches HEA’s strategy of balancing its generation portfolio to achieve stable long term rates for our members.
Your HEA Board and management are doing their best to bring HEA ratepayers the most cost effective and stable power possible. This challenge involves balancing a complex blend of interests, relationships and technologies. By agreeing to equally share both the cost and power output from HCCP with GVEA, HEA is effectively splitting any future risk for its members.
I appreciate the interest and concerns of all HEA members and hope this information will give you confidence that the HEA Board is making the best possible decision based upon solid engineering recommendations with due consideration given to future risks. While you may not be completely in support of the HCCP project, I hope you will find reason to support the Board’s action in delivering a project that provides diversity and long term stability to our average price for power.
Sincerely,
Brad Janorschke
General Manager
Homer Electric Association, Inc.
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