May 2023 Monthly Manager’s Report

Posted: May 19, 2023, 11:13 am



May 9, 2023


Good afternoon. Congratulations on another successful Annual Meeting of the members and welcome to the Board of Directors Dan Green and incumbents Jim Duffield and Jim Levine. I also think it is important to recognize HEA members Robert Ernst and Michael Jones for taking the time and having the interest in running for the HEA Board. Furthermore, I wanted to take a moment to express my sincerest gratitude to Director C.O. Rudstrom who is stepping off the board this year. His contributions to the HEA Board are greatly appreciated. At the June Board meeting, will be set aside some time to honor C.O.’s service with a plaque commemorating his time on the HEA Board. Thank you C.O.

The following are brief updates on HEA’s current business activities and strategic goals that have taken place over the last month. As always, a more detailed report will be given on the day of the meeting.


We had a very safe April and for the second month in a row, HEA experienced no Occupational Safety and Health Administration (OSHA) recordable incidents. The full safety report is included in this month’s Board packet.


As our cold spring continues, revenues for the month of March came in just over $9.2M. YTD revenues exceed budgeted revenue expectations by about $400,000 and were driven by slightly colder weather than the average Heating Degree Day forecast. Total cost of service YTD also trails budgeted expectations generating YTD margins of $2.3M. This trend did continue into April which remained snowy and cold, generating revenues, and further delaying the start of the crews’ maintenance activities.

Finance completed all remaining year end 2022 regulatory and compliance filings for during the first quarter of 2023 including Long Form 12, Long Form 7, AEEC FERC, HEA FERC, annual RCC, Greenhouse Gas Emission Compliance and EIA filings.

HEA received its 2022 allocation of ARECA (Alaska Rural Electric Cooperative Association) patronage capital in the amount of $112,372, which contributed positively towards margins and was a welcome change from last year’s allocated loss of $172,000.


Generation – Bradley Lake started their annual outage on April 17th. ABB was on site to upgrade the GIS switch actuators. We met with Emerson regarding the 2024 Steam Turbine Controls Project. We also reviewed new APDES permit application for Nikiski Combined Cycle (NCC).

Distribution – Switching was conducted on the 115 kV lines between Soldotna-Bradley-Diamond Ridge. Fritz Creek substation was offloaded. New sync settings were installed in the relays at Diamond Ridge. There were several issues with the switching conducted at Bradley that are currently being addressed. The annual OPS146, Distribution and Transmission Switching procedure training is 100% complete. The class will be given to any incoming contractors for the upcoming construction season. Nikiski substation switch maintenance can begin in conjunction with the plant outage beginning on May 6th. Soldotna BESS Maintenance is scheduled for May 22 through June 2 at the request of Tesla


Annual Meeting of the Members & Election

The 2023 Annual Meeting & Election is behind us and we learned a lot working with a new election vendor. Overall, the meeting and the election were successful. The overall satisfactory member survey results have been compiled along with historical voting statistics and detailed election reports, which will be provided to the Board for review. Any suggestions or changes you may have or have heard to make next year’s 74th Annual Meeting of the Members even better, are very much welcomed.

Engineering Services – New Service Applications

The chart plots new service applications, for member jobs only, since 2017. There were 30 new service applications in April which is below the average of 51 for this month over the last 6 years. Applications for new service dipped below those seen in prior years.

Member Services

Review of Board Policy 203, Delegations of Authority: Board to General Manager and Board Policy 209, Board Member Fees and Reimbursement of Expenses are up for review at this month’s Board meeting. Board Policy 203 was established to define the delegations of authority from the Board to the General Manager to enable the General Manager to adequately direct the operations of the Cooperative and to report to the Board on the results achieved. Board Policy 209 was established to determine the meetings and expenses for which Board members will receive fees and/or be reimbursed expenses pursuant to Article IV, Section 7, of the HEA Bylaws.


Cyber Security & Information Technologies

Many Alaskans have a portal username and password. It’s used for unemployment benefits, student aid, loans, taxes, reporting and of course to register for your PFD. Threat actors are now targeting this system to change the direct deposit information to third party bank accounts by harvesting your credentials. Just a reminder to change this password at least annually sometime after you filed for your PFD.


Alaska State Legislature

The Alaska Energy Security Task Force held its first meeting with the goal of developing a comprehensive statewide energy plan to evaluate generation, distribution, and transmission needs for Alaska. Governor Dunleavy’s goal is to produce $0.10 per kWh power in Alaska by 2030. A recording of their meeting schedule can be located at Alaska Energy Security Task Force Meeting Schedule (

Alaska Energy Authority (AEA), Executive Director Curtis Thayer testified during a House Committee hearing on AEA’s agency’s FY24 capital budget appropriations. There are a wide variety of projects proposed in the current version of the State’s capital budget which is expected to narrow as session comes to a close. The presentation is located at (see slide 5 for the AEA project list): Alaska Energy Authority Overview ( A recording of the Thayer’s testimony before the House Finance Committee is located at Alaska State Legislature (

We are tracking two bills in the final weeks of the legislative session. Senate Bill 98 (SB 98) transfers management of the Power Cost Equalization (PCE) Endowment Fund from the Department of Revenue to the Alaska Permanent Fund Corporation. SB 98 was passed by the Senate and is scheduled for a hearing before the House Finance Committee in mid-May House Bill 62 (HB 62), permanently extends the Renewable Energy Grant Fund (REF) program. HB 62 was passed by the Senate. HB 62 will return to the House for a concurrence vote required after the Senate revised the version of the bill that passed the House to remove the expiration of the REF. The House-passed version only extended the REF program for 10 years.

Seward Special Election

In a Special Election held May 2, 2023, a majority of Seward residents voted in favor of Proposition 1 to sell the Seward Electric Utility to HEA. City residents voted 41.6% against selling the Seward Electric Utility and 58.4% in favor of selling the utility. After all ballots were tabulated, 227 City Residents voted to sell the utility and 162 City Residents voted not to sell. Proposition 1 failed by 7 votes. For Proposition 1 to pass, 3/5 (60%) of City residents needed to vote in favor of selling the utility.

While we are disappointed with this result, we remain proud of our entire team that encompasses both utilities. The team worked incredibly hard to make this happen and for that we are so thankful. Our ultimate goal was not achieved, but we are truly grateful for the unparalleled and coordinated efforts of our departments and each individual within those departments. Once again, you have proven that we truly are Stronger Together.


Regular HEA Board Meeting

  • Regular Meeting Minutes of April 11, 2023 & May 4, 2023
  • Resolution 45.2023.09, Bank and Facsimile Signatures
  • Resolution 45.2023.10, Ratification of the Generation Bargaining Unit Collective Bargaining Agreement
  • Board Policy 203, Delegations of Authority: Board to General Manager – Annual review completed, and housekeeping revisions approved.
  • Board Policy 209, Board Member Fees and Reimbursement of Expenses – Annual review completed, and housekeeping revisions approved.

Regular AEEC Board Meeting

  • Regular Meeting Minutes of February 14, 2023
  • Resolution 01.2023.01, Certificate of Authority to Submit or Grant Access to Data
  • Official Notice of the AEEC Annual Meeting