SUMMARY
Good afternoon. March brought a demanding mix of weather, system events, planned maintenance activities, and the final stages of planning for the Annual Meeting. Despite the coldest March in more than two decades, our system performed reliably. At least it is nice to see the longer days settling in. Teams across the organization remained focused on maintaining service, preparing for construction season, and ensuring we are well-positioned for the months ahead.
Below is a summary of recent business activities and progress toward our strategic goals. A more detailed report will be provided during the board meeting.
SAFETY
Unfortunately, March included one Occupational Safety and Health Administration (OSHA) recordable incident and one minor personal injury. Additional details are provided in the Safety report.
FINANCIAL OVERVIEW
In February, our revenues amounted to $11.6 million, with a cost of service totaling $9.8 million, resulting in an operating margin of $1.8 million. Weather conditions played a significant role in system demand. Interestingly, March was the coldest month in the past 22 years. Despite this, first-quarter totals were not record-setting, and overall winter conditions, while cold, remained below historic peaks seen in prior years. Please refer to the graph illustrating HEA’s retail energy usage compared to previous years.
The Cost of Power Adjustment (COPA) filing was submitted to the Regulatory Commission of Alaska (RCA) in late March. The second-quarter COPA rate will increase from the current rate of $0.09317/kWh to $0.10922/kWh, effective as of April 1, 2026.
Looking ahead, the commission is evaluating the COPA and similar mechanisms, including weighted average cost of gas (WACOG) structures used by utilities such as ENSTAR Natural Gas Company, for potential fixed cost components. Any required changes to the structures could result in an additional COPA adjustment later this quarter.
RELIABILITY
Nikiski Combined Cycle (NCC) remained online and operated reliably throughout March. HEA was islanded twice to accommodate Chugach Electric Association (CEA) repair work, requiring coordination across utilities to maintain service continuity.
The plants saw several key operational and project milestones during the month. Planning, coordination, and procurement efforts are underway for the 2-week outage at NCC beginning April 18th, with long-range planning also in progress for major outages in 2027 and 2028. In addition, negotiations were successfully completed for the purchase of a new aeroderivative turbine as part of the NCC Repower project.
The Soldotna Combustion Turbine (SCT) was out of service from March 23rd through April 3rd for its semiannual outage. TransCanada Turbines was onsite March 24th and 25th to complete a borescope inspection and scheduled preventative maintenance activities.
A scheduled 12-day maintenance outage for the Tesla Battery Energy Storage System (BESS) is planned to begin April 6th. A purchase order was also issued to replace the faulted Seldovia generator (not engine); with an estimated 26-week lead time, the unit is expected to return to service this fall.
March also included several system events. On March 23rd, a transmission trip on the Soldotna–Anchor Point 115 kV line resulted in an outage affecting approximately 10,000 members after a guy wire was struck by a member. Although the outage was only a few hours, repair efforts extended into the following day. Additional system events from interconnected utilities occurred throughout the month, requiring coordinated response and system adjustments.
Distribution and transmission Right-of-Way (ROW) clearing contracts are in place, with work commencing on April 1st. Lastly, work under the Community Wildfire Defense Grant (CWDG) remains ongoing and will support approximately $1.277 million in ROW distribution maintenance work as part of Phase 2. This work continues to make meaningful progress in reducing wildfire risk and improving system reliability.
MEMBER/CUSTOMER SERVICE
ENGINEERING SERVICES, NEW SERVICE APPLICATIONS – The chart below shows the new service applications and provides a historical comparison.
MEMBER SERVICES – As mentioned, 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 inform our members of anticipated future decisions that impact their cooperative. Please mark your calendar: this year’s Annual Meeting of the Members is set for May 7, 2026, at Soldotna High School. Registration and dinner will begin at 4:30 p.m. in the lobby, followed by the 75-minute membership meeting at 6 p.m. in the auditorium. More details are available in this month’s board packet and on the HEA website.
Electrical Safety Posters – HEA staff are currently reviewing safety posters submitted by local third- and fourth-grade students. Winners will be selected in the categories for Best Safety Message, Most Creative, and Most Humorous, with winning posters featured during the Annual Meeting.
Scholarship Program – All student scholarship applications have been reviewed, scored, and a resolution drafted for board consideration this month. Staff will attend scholarship award ceremonies at local schools and recognize each recipient at the Annual Meeting. As a reminder, these scholarships are not funded by HEA members and instead, funded through investment earnings with the Alaska Rural Electric Cooperative Association (ARECA).
Youth Rally Program – HEA is once again sponsoring two local high school students to attend the NRECA Youth Rally Leadership Camp, held July 6–10, 2026, in Idaho. This all-expenses-paid leadership experience is open to students in our service area. The application period has closed, and the selection committee has completed interviews.
A huge thank you to our board members for their participation on the Scholarship Committee and the Youth Rally Committee. We appreciate the time and dedication of Directors Duffield, Levine, McKittrick, and Wall for their work on the Scholarship Committee, and to Director Green for his participation on the Youth Rally Committee.
CYBER SECURITY & INFORMATION TECHNOLOGIES
Cyber threats continue to evolve, with attackers increasingly using coordinated tactics across email, text messages, and phone calls to appear more credible. Board members, employees, and members are reminded to remain cautious when receiving unexpected communications, even if they appear to come from multiple sources. Avoid clicking links or sharing information without verification. When in doubt, contact the individual or organization using a trusted method rather than relying on the contact information provided in the message.
BUSINESS & COMMUNITY RELATIONSHIPS
State Legislative Activity – While much of the public attention has focused on the size of the Permanent Fund Dividend, the budget also includes several appropriations relevant to the electric utility industry.
The House Energy Committee advanced a committee substitute (CS) for House Bill 164, sponsored by Mike Dunleavy, addressing net metering programs for Railbelt electric cooperatives. Key provisions in the CS include:
- Requiring utilities to offer standardized net metering credits at the retail rate, with unused credits expiring annually on March 31.
- Establishing limits on utilities’ ability to restrict participation unless necessary for reliability or to protect nonparticipating ratepayers, as determined by the RCA.
- Creating a Net Metering Reimbursement Fund to offset utility revenue impacts.
- Allowing utilities to seek regulatory approval to adjust rates for consumer generators to limit impacts to nonparticipants to no more than 2% annually.
- Establishing a long-term phase-out, with no new net metering eligibility after April 1, 2037, and varying grandfather provisions based on installation date.
House Bill 164 now moves to the House Finance Committee. A companion measure, Senate Bill 150, remains under consideration in the Senate Labor and Commerce Committee.
Additional bills are discussed every Friday during the legislative session during a Teams call with Alaska Power Association’s (APA) Director of Member & Public Relations, Michael Rovito. The call is open to all APA member directors and staff.
National Rural Utilities Cooperative Finance Corporation (CFC) – I was honored to be invited to serve on the CFC Board Alumni Committee. This opportunity allows HEA to stay engaged with national cooperative leadership and contribute to ongoing industry collaboration.
BOARD OF DIRECTORS’ MEETING APPROVALS | APRIL 14, 2026
Regular HEA Board Meeting
- Regular Meeting Minutes of March 17, 2026
- Resolution 45.2026.05, Annual Scholarship Awards
- Resolution 45.2026.06, Ratification of the Inside Bargaining Unity Collective Bargaining Agreement
- Board Policy 216, Designated Spokesperson – Periodic review completed, and housekeeping revisions approved.
- Board Policy 307, Records Retention – Periodic review completed, and housekeeping revisions approved.