RCA Approved Gas Pipeline Rate Increases

October 12, 2016 –  Homer Electric Association members did see a rate increase effective October 1st to the Cost of Power Adjustment (COPA), which is the fuel purchased by HEA to generate electricity and is adjusted on a quarterly basis. A major driver in the increase was the Regulatory Commission of Alaska (RCA) granting of an interim and refundable rate increase to the Kenai Beluga Pipeline LLC (KBPL). HEA did intervene in this rate case to represent the Cooperative’s interests. The RCA approved increase to the pipeline rate was based on an anticipated reduction in pipeline through-put volumes and an increase in capital costs from new equipment installed to aid in shipping gas off the Kenai Peninsula. The pipeline interim rate, approved by the RCA, increased 119%, from $0.2915 to $0.6398 per Mcf.

As a result, HEA had to submit a quarterly filing with the Regulatory Commission of Alaska (RCA) to increase the Cost of Power Adjustment (COPA) from $0.06286 per kilowatt hour to $0.07614 per kilowatt hour. The new rate will mean an increase of $7.30 per month for the average HEA member using 550 kilowatt hours a month. HEA is researching opportunities to reduce the impact of the pipeline tariff increase on our members. The final pipeline rate is subject to further RCA approval and may differ based on the findings at future proceedings.