All posts by Melissa Carlin

HEA and Furie Sign Gas Sale & Purchase Agreement

Homer Electric Association has signed a Gas Sale and Purchase Agreement with Furie Operating Alaska LLC.

Furie is an independent oil and gas company that focuses on the exploration and production of natural gas in the Cook Inlet area.

Under the terms of the agreement, Homer Electric’s generation and transmission subsidiary, Alaska Electric and Energy Cooperative (AEEC), will receive natural gas from Furie beginning on April 1, 2016. The contract terminates December 31, 2018. Additionally, there are two one-year options to extend the term of the agreement through December 31, 2020.

The gas will be used to fuel HEA-owned power plants in Nikiski and Soldotna.

Currently, Homer Electric is purchasing gas from Hilcorp under terms of a contract that expires March 31, 2016. To secure a future gas supply beyond March 31, 2016, HEA contacted known Cook Inlet natural gas producers and began negotiations with those producers that expressed an interest and an ability to provide natural gas under the terms of a utility based natural gas supply contract. The agreement with Furie is the culmination of that effort.

The agreement calls for HEA/AEEC to purchase between 4.0 and 6.2 billion cubic feet of natural gas annually beginning in March 31, 2016.

With regard to gas pricing, HEA’s gas costs in 2016 and 2017 will actually be lower than what HEA is currently paying for gas under its existing Hilcorp contract. HEA General Manager Brad Janorschke said the agreement with Furie is a positive development for the Cook Inlet area.

“This contract will provide one of the Cook Inlet independent producers with a market for its gas, allowing them to move forward with significant investment in Cook Inlet offshore gas infrastructure. The contract brings to fruition the State of Alaska’s goal to incentivize offshore exploration and development in the Cook Inlet. The excess capacity that will result from this development and the pricing within this contract may lead to more competitive gas pricing within the Cook Inlet market,” said Janorschke.

Furie finished construction and installation of a new offshore platform, 16 miles of subsea pipeline and a natural gas processing facility in Nikiski this summer. They are currently connecting the Kitchen Lights Unit discovery well within the platform caisson to the production equipment. Furie has indicated that they plan to have production online by November of 2015. HEA has every confidence in Furie’s ability to deliver gas according to the terms of this contract.

Furie’s Senior Vice President Bruce Webb said the contract with HEA is an exciting step for Furie’s long-term success in the Cook Inlet.

“When we began drilling in 2011, the Cook Inlet was in the midst of a potential energy crisis. We are proud to be one of the companies to provide energy security to the residents of Southcentral Alaska. It seems fitting that our first natural gas deliveries will be to HEA who supplies electricity to the community where our onshore production facility is located. We look forward to supplying natural gas to other Cook Inlet utilities.”

The Gas Sale and Purchase Agreement does not become effective until approved by the Regulatory Commission of Alaska (RCA).

Strong Winds Cause Scattered Outages

August 26, 2015 – Homer Electric crews responded to several scattered outages, mostly due to strong winds, on Wednesday, August 26th.

The first outage occurred about 7:02 am on Irish Hills Avenue, between Soldotna and Kasilof, affecting 31 members and was restored by 10:00 am and was due to a faulty insulator.

HEA crews responded to an outage on Miller Loop affecting 63 members at 11:13 am. Power was restored to that area at approximately 1:27 pm. The cause of the outage was due to a fallen tree on the power line.

An outage on Farr Street off West Poppy Lane affected 74 members was also due to a fallen tree on the line. The outage began around 12:51 pm and was restored by 2:37 pm.

There was also an outage at 1:39 pm in the Robinson Loop and Swanson River Road area affecting 222 members. Power was restored to this area by 3:48 pm

In addition, approximately 369 members in Sterling off Monica Street were without power starting at 2:00 pm and power restored by 4:13 pm.

Thirty-nine members in Nikiski off Neighbors Drive also experienced an outage late in the afternoon and power was restored by 6:26 pm.

Like Homer Electric on Facebook and select “See First” on your Newsfeed to receive immediate outage notifications.  Outage information, via the Facebook feed, can also be found on HEA’s website at


August 21 Power Outage

Homer Electric Association (HEA) members experienced a brief widespread power outage Friday morning.

The outage started at approximately 11:00 am when there was a fault on Chugach Electric’s transmission line between Indian and Anchorage.

The disruption on the transmission tie-line, which connects the Kenai Peninsula to the rest of the Railbelt, resulted in frequency variations on Homer Electric’s system. As a result of the frequency swings, several HEA circuits automatically dropped off line affecting about 11,500 meters.

The outage was seen in several areas including Nikiski, Soldotna, Sterling, Kasilof, and Homer.

HEA was able to adjust the output at its generation plants on the Peninsula and the system was quickly stabilized. Power was restored to all the affected areas by 11:22 am.

The cause of the initial problem on the transmission line near Anchorage is unknown at this time.

June 24 Power Outage

Homer Electric Association (HEA) members experienced a systemwide power outage Wednesday morning.

The outage started at approximately 11:00 am when a problem at HEA’s Nikiski generation plant resulted in the plant going off line.

The loss of Nikiski generation resulted in a power outage that affected approximately 22,000 of the 33,000 meters on HEA’s system, from Nikiski south to Homer.

After the Nikiski plant tripped, HEA was able to start up the Bernice Lake generation plant as well as add load to the generation plant in Soldotna.

Restoration efforts began immediately and by 11:20 am power had been restored to all the affected meters.

Card Street Fire Update

June 19, 2015 – Homer Electric Association restored power to the Kenai Keys area on Saturday afternoon, as conditions in the area were safe to do so.

There were 169 meters in the area that were without power since the Card Street Fire started on Monday.

The fire burned in the Kenai Keys area, damaging electric facilities and leaving a number of charred and hazardous trees in its wake.

During the week, HEA crews were able to make temporary repairs to the electric equipment and are currently working with a tree contractor to remove trees that are burned and in danger of falling into the power lines.

With the fire conditions deemed safe, the power was  turned back on in the Kenai Keys area on Saturday.
HEA appreciates the patience and support of the Kenai Keys residents during this difficult time.

For additional information please contact Joe Gallagher at 907-283-2324

HEA Requests Rate Decrease for 3rd Quarter

Homer Electric Association, Inc. (HEA) is requesting a rate change in its quarterly filings with the Regulatory Commission of Alaska (RCA).

In its filing, HEA is proposing to decrease the Cost of Power Adjustment (COPA) from 7.846 cents per kilowatt hour (kWh) to 7.784 cents per kWh. COPA reflects the cost of the fuel (natural gas) used to generate electricity and is adjusted on a quarterly basis.

The requested rate change will result in a decrease of $0.39 in a monthly residential bill for HEA members using the average of 630 kWh.

If approved by the Regulatory Commission of Alaska, the proposed change will be effective for all billings beginning July 1, 2015.


Power Outage in Homer

Homer Electric Association responded to a power outage Monday afternoon in the Diamond Ridge and Old Sterling Highway area. The outage started at 2:37 pm and affected 638 HEA members.

The cause of the outage was a failed insulator on power pole along the Old Sterling Highway. The failure of the insulator caused a small fire at the bottom of the pole. HEA crews were able to contain the fire until the Division of Forestry and the Anchor Point Fire Department arrived on the scene.

The fire was quickly extinguished and did not spread beyond the immediate vicinity of the power pole.

Homer Electric crews made repairs and had power fully restored at 3:45 pm.

Phone Scams Reported in Southcentral Alaska

Utilities, including Homer Electric, are getting reports from businesses regarding suspicious phone calls.

The phone scam is targeting customers in Anchorage and on the Kenai Peninsula.

The fraudulent caller impersonates a utility representative and requests payment for the customer’s supposed past due bill and threatens immediate disconnection of electric service if the bill is not paid. The goal of the scammers is to obtain credit card or other financial information.

If a suspicious phone call is received, end the phone call and contact Homer Electric for verification and to check the status of your account. Homer Electric has a protocol for contacting members which includes advanced notification prior to a phone call.

Scammers are becoming smarter, so don’t be fooled by caller ID even if it says Homer Electric Association.

Never give anyone your personal information such as your Social Security number, bank account number or credit card number unless you initiated the conversation and you are confident the transaction is legitimate.

If you have questions or need additional information, please call 1-800-478-8551.

HEA Schedules Summer Project to Improve Reliability

Homer Electric will be working in Homer and Soldotna this summer on a project that will improve the reliability and extend the life of underground cable.

Homer Electric’s underground electrical cables are aging, which means that their protective insulation is beginning to deteriorate. This can cause cracks, which can lead to unplanned power outages. Homer Electric is working with a company called Novinium to repair the cables using a silicone injection process. The silicone fills the cracks in the cables and extends their useful life up to 40 years.

The cable injection work will take place in several Soldotna and Homer neighborhoods during the summer. The work will require intermittent power outages for HEA members in these areas where the injection is taking place. The number of power interruptions will be kept to a minimum and every effort will be made to limit the duration of the outages.

HEA will provide advance notice to affected neighborhoods prior to the start of the work.

If you have questions about this project in the Soldotna area, please call HEA Engineering Services Supervisor Chris Edgar at 283-2350 in Kenai. For questions regarding the Homer project, please contact HEA Engineering Services Supervisor Dale Marsengill at 235-3353 in Homer.

Reduction in HEA Work Force

Homer Electric Association (HEA) has implemented a reduction in force due to declining energy sales.

The cooperative has seen its energy sales decline over the last several years. To try to mitigate the downward trend in sales, approximately $9 million in expenses were cut during the 2015 budget process. Despite these efforts and continued attempts to control costs through operating efficiencies, it became necessary to reduce the number of employees.

In 2012, HEA energy sales were 490,000 megawatt hours. In 2013, the number fell to 482,000 megawatt hours and in 2014 the total sales number dropped to 465,000 megawatt hours.
The trend has continued in 2015 and actual revenues from energy sales in the first three months of the year are nearly one million dollars less than projected. The decline in energy sales, along with the fact there are few capital projects planned, has forced the cooperative to reduce its work force in order to avoid any additional rate increases.

The reduction in force resulted in the layoff of nine HEA employees. The decision was based solely on budgetary concerns.

“The decision to eliminate the positions was extremely difficult, particularly because of the impact it would have on valuable, hard-working employees whose efforts have not gone unnoticed. It is anticipated these reductions will provide HEA with the financial stability we need at this time,” said HEA General Manager Brad Janorschke.

As of May 17, 2015, HEA has 140 full-time and 2 part-time employees located in at HEA offices in Homer, Kenai, and Nikiski.