October 11, 2022
SUMMARY
Good afternoon! With the snow slowly creeping down the mountains and the increasingly dark mornings, the fall season is finally here. Actually, the last few months of the “summer” have felt more like fall with the consistent wet weather. As is usually the case, the combination of the hunting season and travel to various affiliate meetings, the last month has gone by quickly. Speaking of travel, last month I was able to attend the Northwest Public Power Association’s (NWPPA) Strategic Planning Meeting in Park City, Utah; the National Rural Electric Cooperative Association (NRECA) / Cooperative Finance Corporation (CFC) Region 7 & 9 Meeting in Portland, Oregon; and finally, a CFC Board Meeting in Dulles, Virginia. The following are brief updates on HEA’s current business activities and strategic goals.
SAFETY
September was a great month with no Occupational Safety and Health Administration (OSHA) lost time or recordable incidents. For the first time since early 2020, inside staff were able to participate in monthly safety meetings in-person. As usual, a complete safety summary is included in this month’s board packet.
FINANCIAL OVERVIEW
Strong sales continue as we head into fall. The increased sales combined with continued efforts to reduce costs resulted in a good month. August had an operating margin of $438,000, bringing our year-to-date operating margin to $1.9 million, which is ahead of expectations. Revenue for the month was $8.8 million with the cost of providing electric service at $8.4 million.
RELIABILITY
Distribution
The 2022 scheduled distribution clearing is near completion in the Beaver Creek area, with a small portion around Knight Drive in Soldotna remaining. Contractors have also completed approximately 50 percent of the Pollard Loop area in Kasilof.
I have mentioned it before and it is worth mentioning again, our vegetation maintenance is crucial for managing electric safety risks to the public and preventing wildfires.
Generation
August was fairly uneventful, as HEA’s generation facilities operated with little to no issues. As mentioned in last month’s report, the pending spill condition at Bradley Lake allowed the Nikiski Combine Cycle (NCC) plant to operate at minimum combined cycle loads to enable optimizing water from Bradley Lake. During these pending spill events, HEA increases its use of hydro generation to the maximum possible. However, the impact on a normal daily schedule, results in 120% more hydro generation but a 5% decrease in thermal generation efficiency. Lastly and of note, Battle Creek flows this year are 91% higher than last year and 28% higher than 2020, the first year of operation.
Regarding the copper limits, NCC’s outfall permit official sample for September was a non-detect for copper, which is great news! Staff continues to monitor and maintain the process to the highest standards possible as test results continue to be unpredictable.
Fall maintenance outages last month affected Soldotna Combustion Turbine (SCT), which was out of service for cyber security upgrades, Emerson Distributed Control System (DCS) turbine controls upgrades, the semi-annual turbine generator maintenance, and a borescope investigation. SCT has completed full load firing and emission mapping is in progress. In addition to the SCT outage, the BESS (Battery Energy Storage System) has been scheduled for an outage for maintenance that requires Tesla to be on site from October 18 – 20.
Transmission
Transmission clearing remains focused on clearing areas from Bradley Lake Junction to our generation facilities located near Soldotna, as well as areas across the bay in Sadie Cove & Tutka Bay.
Lastly, the AEEC Transmission Pole Inspection project is complete, and data and reports are being prepared.
MEMBER | CUSTOMER SERVICE
Engineering Services
In September, 53 applications were received, which is slightly above the 5-year average. As evidenced by the chart below, the 445 applications received this year is the highest number of applications received over the same period in recent history.
Member Relations
The remaining area meetings in Anchor Point, Funny River, Nikiski, Soldotna, and Sterling are scheduled for later this month (October). In addition to the dates listed at the end of this report, an event flyer will be distributed during the regular board meeting on Tuesday.
In celebration of Co-op Month and National LED Light Day, Member Services staff handed out LED light bulbs to the first 50 members in both the Homer and Kenai offices on Friday, October 7, 2022.
CYBER SECURITY & INFORMATION TECHNOLOGIES
Happy Cyber Security Month! Cyber security is not only a shared responsibility, but also an individual responsibility. If everyone does their part – implementing stronger security practices, raising community awareness, educating vulnerable audiences, and training employees our interconnected world will be safe and more secure for everyone.
John’s Tip of the Month: Use Multi Factor Authentication (MFA) everywhere to confirm identity by turning on text, fingerprint, face id, call me back or even a safe-word to protect yourself from identity theft. One of the latest scams is to use social media to get information to impersonate a family member or friend and then call, text, or email stating “I’m in jail, can your wire me money for bail” which many families are falling victim to. Setup a safe word that only you and your family member know to use in case of emergency to protect you and to confirm the identity of the conversation. Asking “what’s our safe-word” normally will stop these pesky scammers.
Stay tuned…John will be presenting his annual Scared Straight presentation to the HEA Board in November. (insert evil laugh – muahahahaha).
BUSINESS & COMMUNITY RELATIONSHIPS
Federal Legislation
Energy Independence and Security Act of 2022 – On Wednesday, September 21, 2022, Sen. Joe Manchin (D-W. Va) introduced the Energy Independence and Security Act of 2022, a permitting reform bill. The legislation is a follow-on bill to the Inflation Reduction Act (IRA) and was part of the compromise that allowed the IRA to proceed in the Senate. The proposed permitting reform bill is expected to be included in a continuing resolution necessary to keep funding the federal government when the federal fiscal year ends on September 30.
According to a summary from the Senate Energy and Natural Resources Committee, the bill:
- Sets a 2-year target for National Environmental Policy Act (NEPA) reviews for major energy and natural resource projects that require a full environmental impact statement and reviews from more than one federal agency and a 1-year target for projects that require an environmental assessment. Also requires issuance of all other permits within 180 days of finishing the NEPA process.
- Designates a lead agency to coordinate project reviews and expands the use of shared interagency environmental review documents and concurrent agency reviews.
- Sets the 150-day statute of limitations for court challenges, requires random assignment of judges to cases consistent with current practice, and requires courts to set and enforce reasonable schedule (of no more than 180 days) for agencies to act on remanded or vacated permits.
- Establishes dispute resolution procedures for resolving project disagreements without delays.
To read the 8-page summary of the Energy Independence and Security Act of 2022, click: Energy Independence and Security Act of 2022 Summary. For the full 91-page bill, click: Energy Independence and Security Act.
Electric Vehicle Infrastructure Deployment Plans for all 50 states – The Biden-Harris Administration announced on Tuesday, September 27, 2022, that it has approved Electric Vehicle Infrastructure Deployment Plans for all 50 states. The National Electric Vehicle Infrastructure (NEVI) Formula Program was authorized and funded in the Bipartisan Infrastructure Law (BIL) passed last year. Alaska will receive about $55 million over five years through the program for EV charging infrastructure.
The Alaska Energy Authority (AEA) in coordination with the Alaska Department of Transportation, submitted its required state NEVI plan on July 29, 2022. To read the state’s plan, click: Alaska NEVI Plan
According to the U.S. Department of Energy, the NEVI funding can be used to fund projects directly related to the charging of a vehicle, including:
- Upgrade of existing and construction of new EV charging infrastructure
- Operation and maintenance costs of these charging stations
- Installation of on-site electrical service equipment
- Community and stakeholder engagement
- Workforce development activities
- EV charging station signage
- Data sharing activities
- Related mapping analysis and activities
For a Federal Highway Administration guide on federal funding for EV charging infrastructure, click: Federal Funding is Available For Electric Vehicle Charging Infrastructure On the National Highway System (dot.gov)
For more information from AEA on electric vehicles in Alaska, visit: Electric Vehicles (akenergyauthority.org)
Regulatory Commission of Alaska (RCA)
Now that the Electric Reliability Organization (ERO) is approved, the next step is the ERO budget filing which is due October 10. Discussions among utilities are scheduled for this month to provide recommendations on financing the activities of the newly formed ERO.
Board of Directors’ Meeting Approvals | October 11, 2022
Regular HEA Board Meeting
- Regular Meeting Minutes of September 13, 2022
- Board Policy 217, Scholarship Program – Periodic review completed with housekeeping revisions approved.
- Board Policy 701, Bargaining Unit Agreements – Periodic review completed with no new revisions approved.
- Board Policy 704, Wage & Salary Administration for Non Bargaining Employees – Periodic review completed with housekeeping revisions approved.