April 9, 2024
SUMMARY
I hope everyone had a joyful Easter. Nevertheless, this year, numerous members and staff on the north end of the system faced the impact of a powerful windstorm. The relentless gusts caused notable damage to power lines, poles and other equipment that resulted in hundreds of outages and left thousands of members in the dark. Nearly 95 percent of these outages were caused by hazard trees outside the right-of-way corridors. The saying “out like a lion and in like a lamb” proved to be quite fitting.
March & April traditionally prove to be busy months for us! We’re now in the final stages of planning for our Annual Meeting, a significant event where we come together as a cooperative to discuss important matters, celebrate our achievements, and make decisions for the future of HEA. Additionally, we are closely monitoring various energy-related discussions in Juneau that may have implications for us. Meanwhile, we are preparing for the upcoming construction season which is quickly approaching.
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
Unfortunately, I must report one recordable injury and a vehicle accident involving an employee and a moose. On a positive note, both the staff member and the moose were unharmed and walked away from the scene.
As mentioned earlier, the Easter Windstorm required our linemen to work long shifts in challenging conditions, and I am happy to report that there were no accidents! Safety remains our highest priority, and we will continue to reinforce the importance of vigilance and caution in our operations.
FINANCIAL OVERVIEW
In February, our revenues amounted to $10.1 million, with a cost of service totaling $9.1 million, resulting in an operating margin of $1.0 million. February was exceptionally cold compared to prior periods with the distribution system peaking at 76.6 MWh, the highest in 8 years. Please refer to the graph illustrating HEA’s retail energy usage to date compared to previous years.
Furthermore, the Cost of Power Adjustment (COPA) was filed with the Regulatory Commission of Alaska (RCA) in late March. The COPA rate for the second quarter of 2024 is set to decrease from the current rate of $0.08868/kWh to $0.008521/kWh. This is a decrease of $1.91/mo on the typical residential bill. This change is effective as of April 1, 2024.
RELIABILITY
Generation – HEA’s generation assets operated smoothly this month. At Nikiski Combined Cycle (NCC), efforts were concentrated on coordinating outages and acquiring necessary parts ahead of the scheduled outage starting on April 20. Over the span of seven weeks, 25 different contractors will be on-site for continuous work. NCC addressed a minor gas leak between the 414 meter and a damaged valve with a temporary solution, scheduling a full repair during the upcoming outage. The Battery Energy Storage System (BESS) remains in Automatic Generation Control (AGC) mode, providing system regulation power. Tesla conducted maintenance on Megapacks, resolving issues and restoring service, with the exception of one experiencing intermittent communication loss. Tesla also identified a potential defect in existing battery modules, planning to replace all 508 modules under warranty from April 8 to June 3. During this period, one group of Megapacks (12) will be offline while others remain operational. Progress was made in collaboration with Strategic Services and Accounting on the GRIP application, and the RCA’s approval of our Gas Supply Agreement (GSA) and aggregation/procurement contract with Enstar, effective from April 1, 2024, marked a significant achievement.
Distribution / Transmission – In the ongoing efforts to address hazard trees posing risks outside HEA’s rights-of-way, the Operations department is finalizing a plan to mitigate potential dangers. As part of this effort, our tree-clearing contractor completed the removal of 330 trees along Tote Road in Soldotna. Further, the department is actively pinpointing additional areas prone to outages due to hazardous trees. In addition to distribution clearing, our contractors have finalized transmission clearing in Anchor Point along the Old Sterling Highway.
The Easter Windstorm, as previously highlighted, lasted for 60 hours, affecting 9,679 members, and causing 144 outages, predominantly due to trees from outside the right-of-way interfering with lines. An additional 152 incidents of tree interference were reported, involving trees on primary lines or services without fuse disruptions. Our response included 18 linemen, three contract crews, warehouse employees, and mechanics. The Kenai Dispatch center operated round-the-clock with dispatchers, superintendents, and operations managers ensuring efficient management. The dedication and effectiveness of our teams were evident in their impressive response and restoration efforts.
Lastly, I am pleased to announce that we have received an offer from Seldovia Village Tribe (SVT) to assist in offsetting tree-clearing costs, generously contributing $181,000 for SVT rights-of-way. We extend our sincere gratitude for their remarkable generosity.
CUSTOMER SERVICE
Engineering Services, New Service Applications – The adjacent chart illustrates new service applications since 2017. Through February, there were 37 applications for new service…about average.
Member Services – Annual Meeting of the Members
It’s that time of year again and the Annual Meeting is just around the corner. This year’s Annual Meeting will be held on Thursday, May 2, 2024, at Homer High School. Registration, as well as complimentary snacks and refreshments, will begin at 4:30 p.m. and the membership meeting begins at 6:00 p.m. Additional information is on our website.
As a friendly reminder, the HEA Board of Directors’ election ballots were mailed to the membership on March 29, 2024. Completed ballots must be received by mail no later than the close of business on May 1st to be validated. Additionally, there will be an opportunity to vote in-person at the Annual Meeting.
Scholarship Program – The scholarship deadline closed on Monday, April 1, 2024, and we are currently in the process of reviewing all submissions. The scholarship committee is scheduled to convene in the next couple of weeks to deliberate and finalize the selection of recipients. The winners will be officially announced during the upcoming Annual Meeting. It is important to note that these scholarships are not funded by HEA members; instead, they are made possible through the earnings on investments with the Alaska Rural Electric Cooperative Association (ARECA). We are grateful for this partnership, which enables us to support the educational aspirations of deserving students within our community.
Electrical Safety Posters – We continue to receive safety posters for the Electrical Safety Poster contest. The contest deadline is April 15, 2024. The winners for Best Safety Message, Most Creative, and Most Humorous posters will be highlighted during the Annual Meeting.
Youth Rally Program – The Youth Rally Leadership Camp application is live on the website with a deadline for submission on May 1, 2024. The camp dates are July 8 – 13, 2024, in Nampa, Idaho. The Youth Rally participants will be awarded during the Annual Meeting.
CYBER SECURITY & INFORMATION TECHNOLOGIES
As technology continues to advance, we must remain vigilant against emerging threats. One such concern is “Deepfake Technology,” which utilizes sophisticated AI to create highly realistic videos and audios, potentially leading to impersonation for fraudulent activities. I urge all members to exercise caution and verify unexpected communications through trusted channels before responding. With election season approaching, it is crucial to critically evaluate the authenticity of videos, maintaining a healthy skepticism. For a better understanding of the risks posed by Deepfake Technology, I encourage you to watch this informative video: https://www.youtube.com/watch?v=nb3R30b-uhc.
BUSINESS & COMMUNITY RELATIONSHIPS
Alaska State Legislature – The final week of March saw a slowdown in legislative activity at the state capital, as many legislators took a break for Easter. Despite the session passing the 75-day mark, there was little movement on any legislation. This customary break can often mark the start of a more hurried pace as the May end of session deadline nears.
House Bill 227, sponsored by Rep. George Rauscher, R-Sutton, aims to shield electric utilities from liability arising from vegetation damage outside the right-of-way. After amendments, the bill advanced from the House Judiciary Committee to the House floor and onward to the Senate.
The Senate Finance Committee heard a presentation from the state’s infrastructure investment coordinator Shareen Crosby the Bipartisan Infrastructure Law (BIL) and Alaska’s allocation. Alaska has received $5.9 billion of BIL funds to date, the highest per capita in the U.S. Of that $5.9 billion, 4 percent has gone toward energy projects at $259,994,000. To view the presentation (slide 13 shows Alaska’s key BIL awards), visit: https://www.akleg.gov/basis/get_documents.asp?session=33&docid=32293.
Additionally, more than 90 amendments have been filed for the FY25 operating budget (HB 268). Rep. Andy Josephson, D-Anchorage, offered an amendment (number 14 on page 34 of this document) to the budget bill that would have shifted $172 million from AIDEA receipts to the general fund to use as state match for the Grid Resilience and Innovation Partnerships (GRIP) grant that the state received to make upgrades to the Railbelt transmission system. The amendment failed 4-7 after some finance committee members expressed discomfort with moving that much money away from AIDEA. Those who spoke against the amendment said they are supportive of matching the grant as required, just not in the form offered.
In April, attention turns to House Bill 349, which addresses state land leases for renewable energy projects, and bills concerning natural gas storage regulation (HB 394) and the Railbelt transmission system (HB307, HB368, and SB 257). Lastly, a representative from the National Renewable Energy Laboratory (NREL) presented on “Achieving an 80 percent Renewable Portfolio Standard in Alaska’s Railbelt” in various committees during the first week of April.
BOARD OF DIRECTORS’ MEETING APPROVALS | April 9, 2024
Regular HEA Board Meeting
- Regular Meeting Minutes of March 19, 2024
- Board Policy 106, Cooperative Mailings & Related Assistance – Periodic review completed, and housekeeping revisions approved.
- Board Policy 304, Investments – Periodic review completed, and housekeeping revisions approved.