November 15, 2022
Greetings! I would suspect everyone is as relieved as I am that the general election is over. It is nice not having to hear the endless supply of campaign ads on the radio. Congratulations to everyone whose candidate of choice won. Regardless of the election’s outcome, one thing is for sure…as a country we still have interesting times ahead.
It is a busy time at HEA, but this is nothing you have not heard from me so many times before. In the spirit of Thanksgiving, it is important to occasionally slow down and reflect on where we are and how we got here. With some thought, it is very easy to identify past and present influences that have had a positive impact on our lives and our Cooperative.
Speaking of November, the month looks to be quite busy as we focus on the 2023 budget, multiple activities on the Railbelt, federal legislative activities, and the typical numerous weather induced outages. The following are brief updates on HEA’s current business activities and strategic goals.
We did have an Occupational Safety and Health Administration (OSHA) recordable incident last month. Details can be found in the full Safety Report in the board packet.
Employees participated in several safety training courses throughout the month of October, which included the Outside Group participating in the Battery Energy Storage System (BESS) Emergency Response Plan (ERP) Review and Forklift Certification. Additionally, and as part of Cybersecurity Month, the Inside Group completed Cybersecurity Awareness Training. The board will be treated to Director of Cyber Security, Communications and Information Technologies, John Jungling’s “Scared Straight” presentation on Tuesday. His cyber security presentation is an annual favorite.
Lastly, Alaska Rural Electric Cooperative Association’s (ARECA) Safety and Loss Prevention Observation was completed with the final report delivered November 3rd. Overall, the Cooperative did very well and in the areas where potential safety issues were discovered, most of these issues will be remedied in the near future.
Revenues for the month of September were $7.3 million and cost of electric service was $8.4 million resulting in an operating margin loss of $1.1 million. The operating loss is not unexpected during this time of year when energy sales typically decline while maintenance costs continue as we wrap up our work in advance of the snow flurries. Our year-to-date operating margin remains at just over $770,000 and beats the revised forecast for YTD margins through September.
In addition, the month of October was one of the coldest months on record for the Kenai Peninsula since 2014, the graph below indicates that kWh sales are picking up and remain slightly ahead of last year’s numbers.
Lastly, staff has been working hard to prepare the draft 2023 budget for Board review and consideration during Tuesday’s meeting.
It was a relatively quiet month with no significant issues to report. The highlight of the month was the continued high inflows from Bradley Lake which resulted in 17 days of pending spill operations. These pending spill conditions keep the Kenai-Anchorage tie fully loaded. In addition, Battle Creek diversion flows ended on October 26th.
The BESS continues to operate well and the great attendance for our ribbon cutting ceremony was greatly appreciated.
MEMBER | CUSTOMER SERVICE
The Member Relations department had a busy October. We wrapped up our Annual Community Area Meetings and National LED Light Day. A big thank you to staff and board for contributing to the success of this year’s Area Meetings.
Lastly, the Member Relations team and the Kenai Peninsula Borough filed a joint Right of Way Clearing (ROW) Grant in early October. We look forward to seeing the outcome of this collaborative effort. The full details of the Member Relations activities can be found in this month’s Key Account Report in the board packet.
I am pleased to report the number of new service jobs year-to-date through October 2022 (total: 482) is up about 5 percent as compared to October 2021 (total: 464). The 32 new service applications in October are consistent with the past five years and conclude an excellent construction season.
CYBER SECURITY & INFORMATION TECHNOLOGIES
Extortion-ware is the largest growing segment threat that actors/scammers are pursuing. Extortion-ware is when a “Bad Actor” gets access to your data such as your pictures, then downloads and deletes them from your phone, computer, and the cloud. They will happily give your data back after you pay an extortion fee. According to the FBI, extortion-ware and ransom-ware payments totaled $1.2 billion in 2021. Moral of the story…back up your data outside of the cloud.
BUSINESS & COMMUNITY RELATIONSHIPS
Alaska Power Association (APA)
Several HEA employees attended the NWPPA/APA 2022 Alaska Electric Utility Conference held in Anchorage at the Dena’ina Center last week. The conference provides a great mix of learning and networking opportunities along with more than 80 trade show booths. This year’s event, aptly themed Public Power: Regenerating Your Communities, did not disappoint.
Alaska Energy Authority (AEA)
The Alaska Energy Authority (AEA) Board of Directors unanimously approved an estimated $175 million in bond financing to improve the efficiency and capacity of power from the Bradley Lake Hydroelectric Project. The bonding by AEA, in partnership with the Railbelt utilities, will be at no additional cost to ratepayers and with no burden on the State treasury. Closing of the bond transaction is expected to take place on or before December 2, 2022.
The bond proceeds will be used solely to pay for transmission line upgrades and battery energy storage systems that will reduce the constraints on the Railbelt grid by improving the Kenai Peninsula’s transmission capacity to export power from Bradley Lake, while also allowing for the integration of additional renewable energy generation. Funding for the projects is coming from the excess payments made by the five Railbelt utilities after the Bradley Lake bonds were paid off.
Multiple staff and departments are collaborating on federal grant preparations for funding opportunities as they arise. As you all know, the funding opportunities from recent legislation including the Infrastructure Investment and Jobs Act of 2021, the Inflation Reduction Act of 2022 (IRA), as well as long-standing agency programs, are extensive. Agencies are currently setting guidelines and criteria for programs funded through the IRA, therefore specific award information is unavailable at this time.
Board of Directors’ Meeting Approvals | November 15, 2022
Regular HEA Board Meeting
- Regular Meeting Minutes of October 11, 2022
- Board Policy 309, Capital Credits – Periodic review completed with housekeeping revisions approved.
- Board Policy 708, Holidays – Periodic review completed with housekeeping revisions approved.
- Resolution 45.2022.26, Appointment of General Counsel
Regular AEEC Board Meeting
- Regular Meeting Minutes of August 9, 2022
- Special Meeting Minutes of August 30, 2022
- Resolution 01.2022.13, Grant Funding Authorization for a Geothermal Project Located on the West Side of Cook Inlet
- Resolution 01.2022.14, Grant Funding Authorization for Cook Inlet Oil Platform Wind Project
- Resolution 01.2022.15, Appointment of General Counsel