Monthly Manager’s Report

Posted: May 12, 2022, 9:49 am

May 10, 2022


What a nice feeling it is to have just wrapped up a very successful Annual Meeting. Events have looked very different for the past two years and I am grateful that we were able to be back in person. However, as with any large project there tends to be a sigh of relief when it is over. This year’s event was well attended and thanks to the terrific planning and participation from many of the employees, the event flowed extremely well.

Congratulations to Wayne, Dan, and Erin who all won in their respective districts. Thank you to all the members who ran for a seat on the HEA Board of Directors (BOD). Your willingness to participate in the process is valued and is what makes Cooperatives positively unique. Furthermore, I wanted to take a moment to express my sincerest gratitude to Director Chay and Director Oberts who are stepping off the board this year. Their contributions to the HEA Board were greatly appreciated…thank you.

Due to my membership presentation last week, I will keep this month’s report brief.


Unfortunately, we did have an Occupational Safety and Health Administration (OSHA) recordable incident in April. The full safety report is included in this month’s Board packet.


The first quarter of 2022 ends with margins slightly behind budget. Year-to-date, operating revenue is just 2% under budget with March revenues of $10 million helping to recover from lower-than-expected February sales. Total cost of service for the month was $8.8 million, bringing the monthly operating margins to just over $1.23 million, slightly below the budgeted $1.9 million.

The retirement of $3.58 million in capital credits is in full process as approved by the board in March. Approximately 8,800 members and former members will receive the distribution. Members with an active HEA account will receive a credit on their May energy bill statement. Members who do not have an active account or whose check is more than $1,000 will receive a check by mail to their address on file. Checks are scheduled to be mailed on May 16, 2022.



April’s Heating Degree Days (HDD) indicates that the month was slightly cooler than average. While cool, it was warmer than last year and significantly warmer than 2013, the coldest of the past 15 years. Loads were around what should have been expected with the temperatures we experienced.

Like last month, economy energy was purchased from Chugach Electric Association (CEA) to minimize generation costs during the brief islanding event that occurred on April 26th. Historically we use our stored Bradley Lake water for these events, but there was none available due to the 2021-2022 water allocation plan. Lake levels continue to be at historically low levels however, we are nearing the beginning of the inflow season.

This month has been a busy month on the fuels front. Hilcorp held a meeting with their stakeholders to inform them that while they have sufficient gas for their existing fuels contracts, they did not have firm gas available beyond that. Additionally, any future contracts would be dependent on current drilling programs to secure additional reserves. We are following this closely as HEA’s current contract terminates at the end of the first quarter of 2024.

Battery Energy Storage System (BESS)

As I mentioned during my Annual Meeting presentation, the Department of Law has approved classifying HEA’s BESS at Soldotna as “required project work.” Details of the transfer will take Board approval later this year as details of the transaction are identified.


Engineering Services

The month of April brought 47 new service applications to the Engineering Services department. Although lower than the previous year, we expect these numbers to trend toward the historical average.

The charts below plot the new service applications, for non-HEA jobs only, and provides a comparison to the previous five years.

Annual Meeting of the Members

Due to all the detailed planning and support from HEA staff and Board, this year’s annual meeting was, yet again another success. The overall satisfactory member survey results have been compiled along with historical voting statistics, which will be provided to the Board for review. Any suggestions or changes you may have or have heard to make next year’s 73rd Annual Meeting of the Members even better, are very much welcomed.


April is CCIT planning and prep month for our big summer projects which kick off in May and this season is no different.

Annual meeting prep and planning was a major endeavor in April with digital marketing, virtual meeting design, auditor technical needs, venue issues, & road crew support requiring substantial amounts of time and energy and collaboration with Member Relations.

Lastly, several issues dealing with a new type of malware that does not require a click to infect stressed our protection systems. These events use paid ads on news and weather websites and infect just by viewing a graphic image or video. We increased our security protocols outside of normal business hours from 6 p.m. – 6 a.m. Monday -Thursday and 6 p.m. Friday – 6 a.m. Monday to reduce our risk for these types of attacks which require immediate staff support to defend. In addition, internet access is highly restricted to business need locations only and requires allowed-list evaluations by IT during restricted hours.


Legislative Update

With about two weeks left in the regular legislative session, Legislators are working on budget bills, and some committees have signaled they might start shutting down as the end of session nears. Legislative committees are tackling a range of bills related to the electric utilities in Alaska. House Bill 301, which began its life as a Renewable Portfolio Standard for Railbelt electric utilities, was modified significantly in the House Energy Committee and is now a Clean Energy Standard bill. A bill extending the termination date of the Regulatory Commission of Alaska to 2030 (SB 190) was also scheduled this past week in the House Finance Committee. This bill must pass by the end of this session, or the RCA will terminate on July 1 of this year. Lastly, Senate Bill 177 (SB 177), which streamlines the State approval process for micronuclear reactors now heads to the House, after passing the upper body earlier this week.


Regular HEA Board Meeting

  • Regular Meeting Minutes of April 12, 2022 & May 4, 2022
  • Resolution 45.2022.09, Election District Boundaries
  • Resolution 45.2022.10, Appointment of Alaska Power Association (APA) Government Affairs Committee Representative – 1 Year Term
  • Resolution 45.2022.11, Appointment of Alaska Power Association (APA) ACRE/CARE Representative – 1 Year Term
  • Resolution 45.2022.12, Appointment of Alaska Power Association (APA) Railbelt Issues Forum Representative – 1 Year Term
  • Resolution 45.2022.13, Appointment of Alaska Power Association (APA) Ad Hoc Scholarship Representative – 1 Year Term
  • Resolution 45.2022.14, Appointment of ARECA Educational Foundation, Inc. (AEF) Representative – 1 Year Term
  • Resolution 45.2022.15, Appointment of National Rural Electric Cooperative Association (NRECA) Voting Delegates – 1 Year Term
  • Resolution 45.2022.16, Appointment of National Rural Utilities Cooperative Finance Corporation (CFC) Voting Delegates – 1 Year Term
  • Resolution 45.2022.17, Appointment of Northwest Public Power Association (NWPPA) Voting Delegates – 1 Year Term
  • Resolution 45.2022.18, Appointment of Alaska Electric & Energy Cooperative, Inc. (AEEC) Voting Delegate
  • Resolution 45.2022.19, Bank & Facsimile Signatures
  • Board Policy 209, Board Member Fees and Reimbursement of Expenses – Annual review completed with housekeeping revisions approved.
  • Quarterly Board & General Manager Expenses
  • HEA Committee Appointments were as follows:

Future Strategies Committee

  • Jim Duffield, Co-Chair
  • Louie Flora, Co-Chair

Renewable Energy Committee

  • Jim Levine, Co-Chair
  • Erin McKittrick, Co-Chair

Scholarship Committee

  • Louie Flora, Co-Chair
  • Robert Wall, Co-Chair
  • C.O. Rudstrom, Co-Chair
  • Erin McKittrick, Co-Chair

Youth Rally Committee

  • Robert Wall, Co-Chair
  • Dan Furlong, Co-Chair

Regular AEEC Board Meeting

  • Regular Meeting Minutes of February 8, 2022
  • Resolution 01.2022.07, Certificate of Authority to Submit or Grant Access to Data
  • Official Notice of the AEEC Annual Meeting