05/19/06 State Capital Budget Contains Funds for Homer Electric

Homer Electric Association will benefit from appropriations in the state capital budget that was approved by the legislature. The $2.25 billion bill contains funding for a host of projects around the state, including upgrades to electric utility infrastructure. The major funding source for utility projects included in the capital budget is the Railbelt Energy Fund (REF). This fund was set up in the mid-1980’s after plans to construct the Susitna Dam were shelved.

The REF has been used over the past two decades to fund a variety of projects, but the utility improvements were done in Anchorage, Mat-Su, and Fairbanks. During the last legislative session, Homer Electric, with strong support from the Kenai Peninsula legislative delegation, urged the legislature to approve an REF allocation plan that includes a $12.5 million dollar appropriation to HEA. The funds will be used to upgrade existing HEA transmission lines and construct new facilities. The details of the improvements will be finalized this summer following a system analysis.

The REF allocation plan, supported by Homer Electric, Chugach Electric, Matanuska Electric, and the Alaska Industrial Development and Export Authority/Alaska Energy Authority (AIDEA/AEA) won legislative approval and was included in the final capital budget. The plan includes money for several other utilities and also provides AIDEA/AEA with a $12.5 million appropriation to assist in the re-start of the Healy Clean Coal Plant. While the legislature has signed off on the spending plan, it still needs to be approved by the Governor.

Also included in the state spending plan is $250,000 that HEA will use to continue its hazard tree removal program on the south side of Kachemak Bay. The money, in conjunction with funds appropriated earlier this year by the Kenai Peninsula Borough, will be spent clearing beetle-killed trees outside of HEA’s right-of-way. Again, Homer Electric would like to thank our legislative delegation, the Kenai Peninsula Borough administration and Assembly, the City of Seldovia, the Seldovia Native Association, and the Seldovia Village Tribe for their support in obtaining funding for this important work.