SUMMARY
Good afternoon. Amazing how we are already into September, and the feel of fall is in the air! Summer seems to have transitioned quickly into hunting season and cooler weather. Our fall schedule has already begun with our first Area Meeting in Seldovia. We’re especially looking forward to celebrating Member Appreciation Month in October and hosting local Community Area Meetings.
The following provides a snapshot of HEA’s current business activities and progress on key strategic initiatives over the past month.
SAFETY
We did have an incident last month, which was considered an Occupational Safety and Health Administration (OSHA) recordable. The good news is that the incident was not serious. A complete safety summary is included in this month’s Board packet.
FINANCIAL UPDATE – July’s operating revenue came in at $10.5M, which fell short of covering total cost of service and resulted in a net operating loss of $29K for the month. Year-to-date margins stand at $500,000, slightly ahead of budget. Looking ahead, we anticipate stronger months as colder weather increases demand, and revenues once again outpace the higher operating and maintenance costs typical in summer.
Capital Credit retirement – This month, the Board will also consider the retirement of capital credits to members. Last year’s retirement totaled $3.37M on a first-in, first-out basis, maintaining a 32-year rotation and retiring patronage capital from 1992 and part of 1993. The 2025 budget contemplated a retirement of $3.26M to continue that cycle.
AUDIT SERVICES – This month’s agenda includes consideration of the Request for Proposal (RFP) for Audit Services, as noted in last month’s report. Seven firms were solicited, and four provided responsive proposals to provide audit services for years ending 2025, 2026, and 2027.
RELIABILITY
The Nikiski Combined Cycle (NCC) plant operated as baseload throughout August with no interruptions. Overall system demand was steady, with non-refinery loads down slightly and refinery demand remaining higher than normal. Refinery load averaged 16.5 megawatts for the month, peaking at 18.2 megawatts early in August before one of their on-site generation units returned to service. Refinery electric demand has since averaged 14.9 megawatts, with an additional unit expected to be back in service soon.
Work continues on several major generation projects. At NCC, the Repower project remains a primary focus, with engineering and vendor coordination underway on diverter dampers and generator rewind activities. In Seldovia, Unit 1 is out of service for replacement construction; however, I am happy to report that contractor crews are fully mobilized, and progress is ongoing.
Planned maintenance at the Soldotna Combustion Turbine plant was completed during the summer outage. Inspections of the gas turbine and related systems confirmed the unit is in excellent condition, with no new issues identified.
The Battery Energy Storage System (BESS) experienced a coolant leak in early August. The affected unit was safely discharged, and six battery modules were removed and prepared for return to the manufacturer.
Despite the maintenance activities, overall system reliability remained strong throughout August.
CUSTOMER SERVICE
ENGINEERING SERVICES, NEW SERVICE APPLICATIONS – The chart adjacent shows the new service applications and provides a historical comparison.
PUBLIC RELATIONS COMMUNITY MEETINGS – Homer Electric Association’s annual Community Area Meetings are underway, providing an opportunity to connect with members, share updates on cooperative activities, and highlight strategic goals for the year ahead. A lunchtime event was held in Seldovia last week. Thank you to Director McKittrick for attending.
Additional meetings are scheduled from October through early December in Soldotna, Nikiski, Funny River, Anchor Point, Sterling, Port Graham, and at local Rotary and Chamber luncheons. These gatherings remain an important way for us to hear directly from members and strengthen our community connections.
CYBER SECURITY & INFORMATION TECHNOLOGIES
Cybercriminals are increasingly using fake QR codes, known as “quishing” attacks, to direct people to malicious websites or harmful apps. These codes are often placed over legitimate ones in public spaces. Members and employees are reminded to avoid scanning unfamiliar QR codes and to verify any website link before clicking or entering personal information.
BUSINESS & COMMUNITY RELATIONSHIPS
Alaska Power Association (APA) Annual Meeting – The APA Annual Meeting in Cordova is quickly approaching. We appreciate the dedicated support and participation from our Board of Directors and staff. This year’s attendees will include me, Rob Montgomery, John Jungling, Director Chenault, President Furlong, and Director Flora. Special thanks to Cordova Electric Cooperative for serving as host.
National Rural Electric Cooperative Association (NRECA) Regional Meeting – The National Rural Electric Cooperative Association’s Regional Meeting is scheduled for Oct. 6–8, 2025, in Bellevue, Washington. President Furlong and I plan to attend on behalf of HEA.
BOARD OF DIRECTORS’ MEETING APPROVALS | SEPTEMBER 9, 2025
Regular HEA Board Meeting
- Regular Meeting Minutes of August 12, 2025
- Resolution 45.2025.27, Award Audit Services Contract
- Resolution 45.2025.29, Authorization to Secure Production Slot for Critical Spare Transformer
- Resolution 45.2025.30, Retirement of Capital Credits and Capital Credits Retirement Method
- Board Policy 309, Capital Credits Retirement Method – Annual review completed, and housekeeping revisions approved.
- Board Policy 501, Service Rules & Regulations – Periodic review completed, and housekeeping revisions approved.