SUMMARYIt’s been a great summer on the Peninsula—and like most summers, it seems to have flown by in a flash. I hope you had a chance to enjoy the second half of July, especially during the record-setting sockeye run. It was one for the books. With the incredible fishing and a steady stream of visitors, I imagine our local businesses saw a welcome boost. We say it every year, but this season felt especially busy with tourists.
As we shift from a full summer into what’s shaping up to be an equally active fall, we’re preparing for several important annual events, including wrapping up the construction season, kicking off our local Community Meetings, and participating in the Alaska Power Association’s Annual Meeting in Cordova.
The following provides a snapshot of HEA’s current business activities and progress on key strategic initiatives over the past month.
SAFETY
I’m pleased to share that we had no OSHA recordable incidents last month, which is a testament to everyone’s continued focus and commitment. For a broader look at our recent safety performance, the 2025 Quarter 2 Safety Summary is included in this month’s board packet.
Our team continues to make safety a top priority, with staff actively participating in monthly self-paced online training. This ongoing program has been a strong addition to our safety culture—boosting awareness and helping us stay ahead of potential hazards before they become issues.
FINANCIAL OVERVIEW – For the month of June, HEA received operating revenue of $10.0 million with a total cost of electric service of $10.5 million, resulting in an operating loss of $0.5 million. While year-to-date revenue figures are coming in under budget, 72% of this shortfall reflects lower than expected fuel costs, and those savings are directly passed through to the membership through the Cost of Power Adjustment (COPA). Tesoro’s increased load and reliance on the HEA system is expected to continue through the month of August as they repair their two self-generating units.
COPA – HEA members will see a slight decrease in the third-quarter COPA rate. The rate, which took effect July 1 at $0.107023 per kWh, was reduced through a filing with the RCA effective August 1. The new rate of $0.106897 per kWh will be in place for August and September
AUDIT SERVICES – HEA issued a Request for Proposal (RFP) for audit services on July 22, 2025, soliciting seven firms for bids for audit services for the years ending 2025, 2026, & 2027. Bids are due on August 22, 2025. Board review of the RFP results and staff recommendation for award will be discussed at the September 9 Board Meeting.
RELIABILITY
GENERATION – The team has had a full month, managing day-to-day operations while also staying engaged in regional planning efforts.
At the Railbelt Reliability Council (RRC), discussions around the Integrated Resource Plan (IRP) remain front and center. These conversations have been lively, with different perspectives from utility and non-utility members. To help address utility-specific concerns, our staff continue to participate in weekly Railbelt Utilities Caucus meetings.
On the operational side, the Nikiski Combined Cycle (NCC) Re-power Project is moving ahead. We issued and awarded Requests for Proposals (RFPs) for bypass damper and transformer design services, and follow-up meetings have been held to address permitting questions and other RFP details.
We’re also seeing a sharp increase in refinery demand, averaging 18.4 MW, approximately 10 MW more than usual, due to the failure of both Marathon cogeneration units. Fortunately, our NCC and Bradley Lake generation assets have been able to meet the increased load. However, if usage stays this high into September, this increased demand will push our natural gas use higher than we have seen in the past several years. Additionally, the Battery Energy Storage System (BESS) continues to perform well, responding as intended to changes in Railbelt system frequency during several events this month.
Finally, at the Bradley Lake Hydro project, the Federal Energy Regulatory Commission (FERC) conducted a routine inspection, which concluded with no findings requiring follow-up action—great news for the site and the team.
DISTRIBUTION/TRANSMISSIUON – Removing trees and vegetation near power lines—is an important part of keeping electricity reliable and reducing wildfire risk. Here’s the latest on our active ROW projects:
- Soldotna Airport to Central Emergency Services Fire Station along Kalifornsky Beach Road: Clearing is about 60% complete.
- South Kachemak Bay – Community Wildfire Distribution Grant (CWDG) Project: 90% of the road-accessible clearing is done. Crews are now working from Halibut Cove toward Seldovia along the feeder line.
Kenai Peninsula Borough Community Wildfire Prevention Plan Implementation Project (CWPPi) Danger Tree and Fuel Mitigation Project: As stated in previous reports, this project will remove hazardous trees and excess vegetation outside the ROW from the airport at Funny River through K-Beach —an area that has had many tree-related outages. The contractor is currently gathering property owner signatures in the Gas Well Road area before starting work.
CUSTOMER SERVICE
ENGINEERING SERVICES, NEW SERVICE APPLICATIONS – Engineering Services has been busy as evidenced by the 60 new service applications received in July. This is well above the monthly average over the past six years. The chart adjacent shows the new service applications and provides a historical comparison.MEMBER SERVICES – Chief Operating Officer Rob Montgomery and I are preparing for the first area meeting of the year, scheduled for Thursday, Aug. 28, in Port Graham from noon to 1 p.m. Additional meetings are planned for October and November.
In July, three local students from the Kenai Peninsula attended the Youth Rally Leadership Camp at Northwest Nazarene College in Nampa, Idaho. HEA sponsored Shauna Koch and Ryder Maguire, and last year’s participant, Kendra Rose, returned as a Student Director. The Alaska Power Association also provided sponsorship support.
The week was filled with leadership activities, utility-focused learning sessions, and plenty of sunshine and fun alongside more than 90 students from across the West Coast. Amanda Shipman of Copper Valley Electric Association served as chaperone and shared her praise: “We received numerous compliments about our group, and I couldn’t be prouder!”
CYBER SECURITY & INFORMATION TECHNOLOGIES
Google recently released important security updates for the Chrome browser to fix several serious vulnerabilities. If you haven’t updated Chrome in a while, now is the time to do it. Keeping your browser up to date is one of the simplest ways to block potential threats and protect against hackers trying to exploit security gaps.
BUSINESS & COMMUNITY RELATIONSHIPS
FEDERAL LEGISLATIVE UPDATE – On July 4, 2025, President Trump signed the “One Big Beautiful Bill Act” (OBBBA), introducing significant changes that affect credit timelines and qualification standards for clean energy investments. Relevant to HEA’s pursuit of a solar installation, the new legislation phases out ITC for solar and wind on an accelerated timeline and requires that projects begin construction by July 4, 2026, and be completed by December 31, 2027. The IRS is expected to issue new guidance on what constitutes the start of construction on August 18, 2025. In addition, the Secretary of the Interior has directed his agencies to not participate in NEPA (National Environmental Policy Act) reviews for solar and wind projects, which are necessary before projects are able to start construction.
RENEWABLE ENERGY FUND ROUND 18 – The Alaska Energy Authority (AEA) is accepting applications for Round 18 of its Renewable Energy Fund (REF) competitive grant program through Sept. 12, 2025. The program, created in 2008, provides state grant funding for renewable energy projects that reduce fuel use and strengthen Alaska’s energy portfolio.
Since its start, the fund has awarded $333 million to 296 projects, supporting more than 110 operational projects statewide. Round 18 offers up to $2 million in grant funding for communities with low energy costs and up to $4 million for those with high energy costs. Proposals will undergo a four-stage review process, with final funding decisions made by the Governor and Legislature.
NET METERING INCENTIVE PAYMENT PILOT PROGRAM – AEA has launched the Net Metering Incentive Payment Pilot Program to encourage greater participation in utility net Metering. The program offers additional compensation to residential members who generate more electricity than they consume and provide the excess back to the grid. Payments are calculated on a per-kilowatt-hour basis for this excess energy, above and beyond what is required under state net metering rules.
Goals of the pilot include expanding customer-owned renewable generation, reducing reliance on Cook Inlet natural gas, easing short-term peak demand on utility systems, and gaining a better understanding of the long-term impacts of increased net metering participation.
Participation is voluntary for utilities that operate net metering programs under state regulations. Eligible utilities can enroll through an agreement with AEA and may withdraw at any time with written notice.
BOARD OF DIRECTORS’ MEETING APPROVALS | AUGUST 12, 2025
Regular HEA Board Meeting
- Regular Meeting Minutes of July 8, 2025
- Resolution 45.2025.28, Approval of the Sale of Real Property
- Board Policy 701, Bargaining Agreements – Periodic review completed, and housekeeping revisions approved
- Board Policy 704, Wage & Salary Administration for Non-Bargaining Employees – Periodic review completed, and housekeeping revisions approved
- Quarterly Board & Chief Executive Officer Expenses
Regular AEEC Board Meeting
- Regular Meeting Minutes of June 10, 2025
- Resolution 01.2025.05, Certificate of Authority to Submit or Grant Access to Data
August 2025
Posted: August 13, 2025, 2:33 pm