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Press Release
Homer Electric
Association asking for 6.5% rate increase
03/14/08 Homer Electric
Association is asking the Regulatory Commission of Alaska
(RCA) to approve a 6.5% base rate increase. The increase,
if approved by the RCA, would go into effect on April 1,
2008.
Under the request submitted by
Homer Electric, the current rate would increase from
12.718 cents per kilowatt hour to 13.545 cents per
kilowatt hour.
The net result of the proposed
rate hike would be a $4.96 increase in the monthly
electric bill for a residential member using 600 kilowatt
hours per month.
The proposed increase is
necessary to cover rising costs in several areas,
including increased expenses related to capital projects.
In an effort to improve
reliability and provide better service to its members,
Homer Electric is currently upgrading a significant
portion of its facilities. The projects include replacing
aging overhead and underground lines around the service
territory. The cooperative is also moving ahead with the
replacement of the Diamond Ridge substation in Homer. In
addition, HEA is in the third year of a project that is
replacing mechanical meters with digital meters that can
be remotely read.
The construction projects will
increase the depreciation expense that HEA incurs. HEA has
also had to finance these projects with additional
long-term debt, thus incurring more interest expense.
“While Homer Electric has
strived to keep rates as low as possible, this increase is
needed to insure we are able to provide our members with
reliable electric service. We will continue to explore all
options that may help stabilize rates in the future,”
General Manager Brad Janorschke said.
Over the past decade, Homer
Electric’s base rate has increased from 8.8 cents in 1997
to the proposed 13.5 cents in 2008. During this same time
period, the cost of other types of energy sources such as
oil, natural gas, propane and gasoline has more than
doubled.
For additional information
contact:
Joe Gallagher
Homer Electric Association
283-2324 |
