November 12, 2024
SUMMARY
Hello, everyone! I imagine many of us are relieved the general election has wrapped up. It’s a nice break from the constant stream of campaign ads and texts. Congratulations to those whose candidates came out on top. Regardless of the results, one thing is certain—we’re moving into a time of new challenges and opportunities.
It’s a busy season here at HEA, as always. With Thanksgiving around the corner, it’s a good time to pause and reflect on where we are and the people and decisions that have positively shaped our journey as a Cooperative.
Looking ahead, November is shaping up to be a like every other month…very busy. We’re hard at work finalizing the 2024 budget, addressing initiatives affecting the Railbelt, updating our strategic plan, and, of course, continuing to prepare for winter weather. Here is a look at HEA’s current business activities and strategic priorities.
SAFETY
We had another strong month in safety, with HEA working 101 days without an Occupational Safety and Health Administration (OSHA) recordable incident in October. However, an incident initially not classified as a recordable or lost-time injury at the end of October was reclassified in early November due to the results of some additional testing. The full safety report in this month’s Board packet includes all the details.
FINANCIAL OVERVIEW
Financial Update – Total revenue for the month of September was $9.16M. The cost of service was $9.24M and resulted in a monthly operating loss of about $76,000 for HEA. Year-to-date operating margins are around $884,000, and total margins are $1.65M for a modified debt service coverage ratio of 1.43, compared to 1.45 last year. Equity to assets continues to hold at 46%, the same as last month, and within the target range. The adjacent graph represents monthly energy usage.
RELIABILITY
Generation – It was a relatively quiet month with all generation assets performing smoothly and no significant issues to report. Following the recent Alliance for Energy Services (AEGIS) insurance inspections, our team has focused on winter preparations, including organizing inventory, managing critical spares, and completing plant cleanup. The annual servicing of fire extinguisher equipment is also now complete. Additionally, staff from Generation, Dispatch, and Public Relations participated in Enstar’s Emergency Functional Exercise, which simulated scenarios involving restricted or lost natural gas supply.
Bradley Lake energy remains a key resource that we are conserving for the major islanding planned in 2025. In October, HEA’s share of Bradley generation was used primarily for islanding events, while other utilities have been utilizing Bradley to reduce their reservoir allocation. To support this, CEA purchased 36 MW of Bradley capacity from HEA, allowing them greater use of their share of the water. As of the end of October, we have exceeded 70 days of being islanded.
Distribution/Transmission – As mentioned last month, we continue to see a significant number of outages caused by trees located outside the designated right-of-way. Although these trees are not on our within our easement, they pose a serious safety risk and potential to damage our power lines and infrastructure, especially during the windy weather conditions we have frequently experienced on the north end of our system. In addition, our right-of-way clearing program is as important as ever, as we have completed over 75% of our clearing efforts in the Diamond Ridge area in Homer.
I would like to take a moment to thank our staff in Operations – dispatchers, lineworkers, warehouse personnel – for their hard work and dedication as they continue to restore service quickly, even in challenging conditions.
CUSTOMER SERVICE
Member & Public Relations – October was a busy month for the Member Relations department as we continued our Annual Community Area Meetings. I want to extend a sincere thank you to the staff and board members who helped make this year’s meetings a success. We have two remaining meetings scheduled:
- Wednesday, November 13 – Kenai Chamber Luncheon Presentation | 12:00 p.m. | KCCVC
- Thursday, November 14 – Joint Rotary Luncheon Presentation | 12:00 p.m. | Addie Camp
Engineering Services, New Service Applications – the chart below illustrates new service applications and provides a historical comparison.
CYBER SECURITY & INFORMATION TECHNOLOGIES
Regularly backing up your data is crucial for protecting against unexpected events like ransomware attacks, which can lock you out of your files and demand payment to regain access. By maintaining up-to-date backups, you will have copies of your important files available to restore without facing these risks. Consider using an external hard drive or a secure cloud service and make it a habit to update your backups frequently.
BUSINESS & COMMUNITY RELATIONSHIPS
Alaska Power Association (APA) – As we prepare for the upcoming 2025 legislative session, Deputy Director Michael Rovito will be stepping into the role of lobbyist for APA. This transition follows the retirement of APA’s longtime lobbyist, Larry Markley, who served Alaska’s electric utility industry at the state and federal levels for 33 years. Michael brings extensive experience from his time as a chief of staff in the Alaska State Legislature and as a legislative liaison for a state agency. We wish him every success in his new role.
BOARD OF DIRECTORS’ MEETING APPROVALS | NOVEMBER 12, 2024
- Regular HEA Board Meeting
- Regular Meeting Minutes of October 8, 2024
- Resolution 45.2024.19, Authorizing the Amendment of the 401(K) Pension Plan Adoption Agreement “A” and The Retirement Security Plan RUS#: 02005-001, 02005-002, 02005-003, 02005-004
- Board Policy 107, Organizational Planning – Periodic review completed, and housekeeping revisions approved.
- Board Policy 303, Equity Management – Periodic review completed, and housekeeping revisions approved.
- Quarterly Board & General Manager Expenses
Regular AEEC Board Meeting
- Regular Meeting Minutes of August 13, 2024
- Resolution 01.2024.03, Bank and Facsimile Signatures