September 12, 2023
SUMMARY
Good afternoon. Amazing how we are already into September and the feel of fall is in the air! Summer seems to have transitioned rather quickly into hunting season and cooler weather. Our fall schedule already began with our first Area Meeting in Seldovia.
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.
SAFETY
We had another good month for safety. HEA has worked 111 days without experiencing an Occupational Safety and Health Administration (OSHA) recordable incident in August. The full safety report is included in this month’s Board packet. With the line crews working long hours during the Labor Day weekend windstorm, I am very happy we had no injuries during the event that peaked with over 19,000 members out of power!
FINANCIAL OVERVIEW
Total revenue for the month of July was $8.76M. Cost of service was 9.11M and resulted in a monthly operating loss of $349k. This brings HEA’s total year to date operating margin to $1.32M and total margins to $1.58M with HEA’s Modified Debt Service Coverage (MDSC) ratio to 1.39.
The Simplified Rate Filing for the year ending June 30, 2023, was filed as an informational filing with a TIER (Times Interest Earned Ratio) of 1.201.
The Regulatory team continues to monitor the Chugach Rate Case. CEA’s proposed, transmission rate increases, merit further investigation and intervention and HEA plans to file its petition of intervention by the September 17, 2023 deadline.
RELIABILITY
Generation – Staff met again with Emerson about the Steam Turbine Generator (STG) controls replacement project and reviewed proposals for the STG outage contract. AEGIS on-site facility property insurance inspections and reviews were completed, and State of Alaska (ARISE) facility reports were received. The units operated well, and additional improvements will be included in the proposed 2024 budget.
Distribution – The Homer Meter Techs have been changing failing Cannon meters to the new TWACS meters in the Sterling area, addressing service orders, and have also started the Diamond Ridge Transmission substation Real-Time Automation Controller (RTAC) commissioning. RTAC’s are used in substations as a communication hub. Line apparatus inspections on the north end of the system were completed with the assistance of HEA’s Safety Coordinator..
CUSTOMER SERVICE
Engineering Services – New Service Applications
The chart below plots new service applications since 2017. There were 48 new service applications in August which is well below the average of 72 for this month over the last 6 years. The number of applications to date in 2023 continues to lag 13-16% behind the last two years for cumulative applications through this month.
Member Services
HEA recently began our annual Area Meetings. We hosted a lunch time event in Seldovia last month. These events are great opportunities for our members to visit with HEA representatives and ask questions about their electric cooperative.
Cyber Security & Information Technologies
Ransomware attacks made a strong comeback in August impacting thousands of companies worldwide, but the attackers are now targeting individuals as well. The FBI shut down Qakbot which impacted over 200,000 individuals with ransomware extortion targeting phones and iPads encrypting access to photos, emails, and contacts. Cloud backup will not protect you from this attack! Purchase a flash drive and backup offline your phone or tablet which is your only protection from this type of attack. As a reminder, if you don’t use the app delete it and if you don’t trust the link don’t click it!
BUSINESS & COMMUNITY RELATIONSHIPS
Recent News
The Biden Administration announced that it is canceling legally issued leases for oil and gas in the section of the Arctic National Wildlife Refuge (ANWR) designated for oil and gas development. The Secretary of the Department of the Interior has the authority to cancel oil and gas leases issued in violation of statute or regulation, but there is no such violation in the ANWR leases. The leases that the Alaska Industrial Development and Export Authority (AIDEA) holds were issued properly as mandated by Congress in the Tax Cuts and Jobs Act of 2017.
The Biden Administration has also proposed new regulations for the National Petroleum Reserve in Alaska that prohibits oil and gas development – in an area initially created by Congress to provide a source of oil for the U.S. Navy and later congressionally designated for oil and gas development.
Alaska Power Association (APA) Annual Meeting
The APA Annual Meeting was held in Valdez last month and was an excellent experience for Keriann Baker, Director of Member Relations, President Furlong, Director Wayne Ogle, and myself. It was great to have support and attendance from our Board of Directors, thank you. Golden Valley Electric Association (GVEA) will host next year’s APA Annual Meeting in Fairbanks.
National Rural Electric Cooperative Association (NRECA) & Cooperative Finance Corporation (CFC) Regional Meeting
As a reminder, I will be attending the NRECA & CFC District 7/9 Meeting in Omaha, Nebraska, which is scheduled for September 26-28, 2023.
BOARD OF DIRECTORS’ MEETING APPROVALS | September 12, 2023
Regular HEA Board Meeting
- Regular Meeting Minutes of August 8, 2023 and Special Meeting Minutes of August 29, 2023
- Board Policy 207, Meeting Attendance – Annual review completed, and housekeeping revisions approved.
- Board Policy 502, Energy Diversion – Annual review completed, and housekeeping revisions approved.
