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.