June 10, 2025
SUMMARY
Hello, and welcome to June! Summer has officially arrived in Alaska—that unique season where we all work to balance professional responsibilities with time spent enjoying the outdoors. Over the past month, we’ve stayed busy with travel, meetings, and a few opportunities to appreciate the long days and natural beauty of our state.
Last week, I had the opportunity to attend the Alaska Sustainable Energy Conference in Anchorage alongside Directors Dan Furlong, Wayne Ogle, Erin McKittrick, and Jim Levine. It was a valuable event, offering timely insights and networking opportunities that will support our strategic goals moving forward.
Below is a summary of current activities and updates. A more detailed report will be provided at the meeting.
SAFETY
June is National Safety Month, a time to emphasize the importance of staying safe at work, at home, and in our communities. HEA remains committed to fostering a strong safety culture, and this month provides a great opportunity to reinforce that commitment with our employees. The full safety report is included in your board packet.
FINANCIAL OVERVIEW
Financial Update – In April, total revenues reached $9.67 million, with the cost of service totaling $9.44 million, resulting in a contribution to operating margins of $222,000. Year-to-date operating margins of $1.62 million are tracking $263,000 ahead of budgeted expectations. This puts HEA in a good position as we roll into construction season, when operations and maintenance spending increase and revenue declines, a trend that all winter-peak utilities face.
Additionally, HEA submitted its informational Simplified Rate Filing on May 30, 2025 with a regulatory tier of 1.492 and no requested changes to rates.
Lastly, David Williams has joined the HEA finance team as our new Controller as of May 2, 2025. Bringing over 30 years of experience in accounting, financial reporting, budgeting, investments, and cash management, he is uniquely qualified to maintain the high bar of excellence held by Finance’s liaison with the Board selected independent auditor.
RELIABILITY
Generation – May was a busy and productive month for HEA’s generation operations. The Nikiski Combined Cycle (NCC) plant was offline for its scheduled annual maintenance outage from May 2 to May 16. During this time, the Soldotna Combustion Turbine (SCT) and Bradley Lake Hydro (BLH) were used to meet system load. SCT operated as the primary baseload unit during the outage, with additional BLH capacity purchased from other project participants to support demand. Even with these resources, there were times when load exceeded available generation, and HEA’s battery energy storage system (BESS) was cycled to cover the shortfall. More than 228 megawatt-hours were dispatched from the BESS during this period, helping avoid the need to run higher-cost generation.
Operations at NCC resumed on May 16 as scheduled. During the outage, contractors and plant staff completed a wide range of maintenance projects, including inspection and repair of key systems, valve replacements, steam turbine repairs, safety system testing, and relocation of the 414-meter building to meet updated safety standards.
In addition to the NCC work, staff and contractors supported other generation and infrastructure efforts including:
- Seldovia Genset Replacement: The new Unit 1 generator was delivered to Homer in April and will remain in storage until the contractor is ready to begin installation. Final design and construction planning are underway, with work scheduled to begin in late July and finish by mid-September; and
- Port Graham Controls Upgrade: Programming and system configuration are in progress, with installation planned for July or August.
The weather in May was cooler than average. The cooler weather, combined with the outage at NCC, led to an increased reliance on hydroelectric resources and battery storage. Refinery loads remained high in May due to the continued outage of one of their on-site generation units. Elevated refinery demand is expected to persist through June and into July. HEA staff continue to plan for future generation needs. Other highlights from the month include:
- Placing the Battle Creek Diversion project into service on May 10. Although the road to the site remains snow-covered in some areas, the project is now operational and contributing to our system; and
- The public boat dock at Bradley Lake saw high usage over Memorial Day weekend, with several groups of spring bear hunters accessing the area.
Distribution/Transmission – Right-of-way (ROW) maintenance is underway for several key projects across the service area. These areas include:
- Soldotna – Clearing has begun on the Billy Thompson 814 (BTD814) substation corridor, which includes the area from the Funny River Airport to Kalifornsky Beach Road. Member mailers have been sent, and on-the-ground work is scheduled to begin the week of June 16.
- South Kachemak Bay – As part of the Community Wildfire Distribution Grant (CWDG) Project crews have completed approximately 80% of the road-accessible clearing in and around Seldovia. Also, in Halibut Cove, roughly 90% of the clearing is complete. Work is now progressing along the feeder line from Halibut Cove toward Seldovia.
- Kenai Peninsula Borough – Community Wildfire Prevention Plan Implementation Project (CWPPi) Danger Tree and Fuel Mitigation Project will start later this month. This project, targeting areas outside the ROW in the BTD814 area with a history of tree-related outages, has been awarded. Fieldwork is set to begin the week of June 16.
- Transmission ROW Planning – Planning is underway to identify and prioritize 2025 transmission maintenance needs. In addition, staff are developing a long-term Transmission ROW Clearing Business Plan to guide maintenance efforts from 2025 through 2030.
CUSTOMER SERVICE
Engineering Services – The Engineering Services department received 57 new service applications in May. While this reflects a slight decrease compared to the same month last year, activity remains steady as we move into the summer construction season.
CYBER SECURITY & INFORMATION TECHNOLOGIES
Cybercriminals use Artificial Intelligence (AI) too, creating highly convincing phishing scams that make them harder to spot. Always verify the source before clicking on links or sharing sensitive information. When in doubt, don’t click.
BUSINESS & COMMUNITY RELATIONSHIPS
Legislative Update—The Alaska State Legislature adjourned one day ahead of schedule. Alaska Power Association Deputy Director Michael Rovito distributed a comprehensive end-of-session report summarizing legislation relevant to the electric utility industry. To read the full wrap-up report, visit: https://alaskapower.org/apa-2025-legislative-session-wrap-up/.
BOARD OF DIRECTORS’ MEETING APPROVALS | JUNE 10, 2025
Regular HEA Board Meeting
- Regular Meeting Minutes of May 13, 2025
- Resolution 45.2025.20, Appointment of Alaska Electric & Energy Cooperative, Inc. (AEEC) Voting Delegate (1-Year Term)
- Resolution 45.2025.14, Appointment of Alaska Power Association (APA) ACRE/CARE Representatives (3-Year Term)
- Resolution 45.2025.16, Appointment of Alaska Power Association (APA) Ad Hoc Scholarship Representatives (3-Year Term)
- Resolution 45.2025.21, Appointment of Alaska Power Association (APA) Board of Directors (3-Year Term)
- Resolution 45.2025.24, Appointment of Alaska Power Association (APA) Government Affairs Representative (3-Year Term)
- Resolution 45.2025.15, Appointment of Alaska Power Association (APA) Railbelt Issues Forum Representatives (3-Year Term)
- Resolution 45.2025.25, Appointment of Alaska Rural Electric Cooperative Association (ARECA) Educational Foundation, Inc. Representative (3-Year Term)
- Resolution 45.2025.26, Appointment of (ARECA) Insurance Exchange Board of Trustees Representative (3-Year Term)
- Resolution 45.2025.18, Appointment of National Rural Utilities Cooperative Finance Corporation (CFC) Voting Delegates (1-Year Term)
- Resolution 45.2025.17, Appointment of NRECA Voting Delegates (1-Year Term)
- Resolution 45.2025.19, Appointment of Northwest Public Power Association (NWPPA) Voting Delegates (1-Year Term)
- Resolution 45.2025.22, Destruction of Election Ballots
- Resolution 45.2025.23, Election District Boundaries
- HEA Board Committee Assignments
- Board Policy 402, Employee Purchase Program – Periodic review completed, and rescission approved.
- Board Policy 404, Use of Cooperative Vehicles – Periodic review completed, and housekeeping revisions approved.
AEEC Annual Meeting of the Member
- Annual Meeting Minutes of June 11, 2024
Regular AEEC Board Meeting
- Regular Meeting Minutes of May 13, 2025
- AEEC Board Officers:
- Wayne Ogle, President
- Robert Wall, Vice President
- Jim Duffield, Secretary/Treasurer
- Jim Levine, Deputy Secretary
- Resolution 01.2025.03, Appointment of National Rural Utilities Cooperative Finance Corporation (CFC) Voting Delegates
- Resolution 01.2025.04, Appointment of National Rural Electric Cooperative Association (NRECA) Voting Delegates