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. As a friendly reminder, for those who love spending time on or around water, please remember to wear a life jacket to stay safe.
The following are brief updates on HEA’s current business activities and strategic goals that have taken place over the last month. As always, a more detailed report will be given on the day of the meeting.
SAFETY
June is National Safety Month, a time to focus on keeping each other safe at work, on the road, and in our homes and communities. We are committed to promoting a culture of safety and encouraging our employees to stay vigilant to ensure a safe working environment for everyone. We look forward to using this month as an opportunity to reinforce our dedication to safety in all aspects of our lives.
I am happy to report there were no Occupational Safety and Health Administration (OSHA) recordable incidents in May.
FINANCIAL OVERVIEW
In April, total revenues reached $11.03 million, with the cost of service totaling $9.98 million, resulting in a contribution to operating margins of $1.02 million. Year-to-date operating margins of $2.64 million are tracking $630,000 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.
Simplified Rate Filing (SRF) – On May 29th, HEA submitted an informational Simplified Rate Filing (SRF) for the period ending March 31, 2026 (rolling twelve months) with a Regulatory TIER of 2.06. HEA’s approved target TIER is 2.00 and a rate reduction would be mandated should HEA’s TIER exceeds 2.10 (5% above the target TIER).
RELIABILITY
Generation staff managed several planned outages and unexpected operational events throughout May while maintaining system reliability during continued colder-than-average weather conditions. The month included scheduled maintenance activities, support for system voltage control and continued progress on major capital and reliability projects across HEA’s generation assets and remote facilities.
The Nikiski Combined Cycle (NCC) plant returned from its scheduled outage and resumed normal operations May 6. The facility operated as baseload generation through most of the month. On May 19, both the combustion turbine (CT) and steam turbine (ST) tripped offline during a period when Bradley Lake units and the Soldotna Static Var Compensator (SVC) were out of service for scheduled maintenance. During the May 19 event, the transmission system experienced elevated voltage conditions due to limited reactive resources during a period of light electrical load. Plant operators and system personnel worked throughout the night to bring generation resources online and stabilize grid conditions. Bradley Lake Unit 1 was returned to service on the 20th, ahead of schedule to provide additional system support.
The Soldotna Combustion Turbine plant and Bernice Lake Combustion Turbine units were operated during the month to support generation needs and system voltage control. Plant Air Compressor No. 2 at Bernice Lake was replaced to restore operational capability.
Maintenance and repair work at the Soldotna Battery Energy Storage System (BESS) was completed, including firmware updates, and all modules were returned to service. Planning is underway for the annual preventive maintenance outage scheduled for July 27 through Aug. 7.
On May 2, Bradley Lake Unit 2 experienced a forced outage after tripping on low governor hydraulic oil pressure. During the annual maintenance outage, crews replaced thermal overloads and a pressure switch that was unable to maintain calibration. Battle Creek was returned to service June 1.
Work on the Nikiski Combined Cycle Repower Project continued with weekly coordination meetings and ongoing engineering support. Final drawings for the heat recovery steam generator bypass damper system were submitted for review and approval.
A replacement generator end for Seldovia Diesel Unit 2 was purchased with delivery expected in October. Generator testing and inspections for Unit 1 were completed May 18 with excellent results. Installation of a new 200-kilowatt generator in Kenai was completed, including successful transfer switch testing. Preparations also continue for the Port Graham generator controls upgrade, with installation planned for June pending weather and coordination with other departments.
MEMBER/CUSTOMER SERVICE
ENGINEERING SERVICES, NEW SERVICE APPLICATIONS – the Engineering Services department received 42 new service applications in May. While this reflects a decrease compared to the same month last year, activity remains steady as we move into the summer construction season.
CYBER SECURITY & INFORMATION TECHNOLOGIES
Entering member records, internal documents or grid-related information into personal artificial intelligence (AI) tools can expose sensitive information outside the company’s control. Before entering information into any AI platform, ask yourself: “Would I email this to a stranger?” Employees should use only approved AI tools and contact Information Technology staff if they are unsure which platforms are authorized.
BUSINESS & COMMUNITY RELATIONSHIPS
Legislative Update — The regular session of the Alaska Legislature concluded in May without much movement on energy related bill proposals. During the session, bills focusing on net metering, wildfire liability, balcony solar, and data centers were discussed in various committees but never formally introduced on the floor. Lawmakers have returned to Juneau for a special session focused on oil and gas property tax legislation related to the Alaska liquefied natural gas project. Special sessions may last up to 30 days, though it remains unclear whether an agreement will be reached.
Attention now turns to Gov. Mike Dunleavy as he considers legislation and budget items passed during the regular session. The governor may sign bills into law, allow them to become law without his signature or veto them. For budget bills, the governor also has the authority to reduce or remove individual appropriations.
Alaska Power Association (APA) Deputy Director Michael Rovito distributed a comprehensive end-of-session report summarizing legislation relevant to the electric utility industry. If you are interested in a copy of the report, please contact Jenniffer.
Northwest Public Power Association Board (NWPPA) and Annual Meeting — HEA representatives attended the Northwest Public Power Association Annual Meeting in Spokane, Washington. The conference featured presentations on a variety of timely industry topics, while also providing valuable opportunities to exchange ideas and best practices with utility peers from across the region. In addition to myself, President Dan Furlong and Chief Operating Officer Rob Montgomery also attended. Montgomery serves on the NWPPA Board of Trustees.
Alaska Sustainable Energy Conference — HEA staff and board members attended the Alaska Sustainable Energy Conference in Anchorage last month. Staff participated in the HEA booth, attended presentations, and connected with utility professionals, vendors, and industry partners from across the state.
BOARD OF DIRECTORS’ MEETING APPROVALS | June 9, 2026
Regular HEA Board Meeting
- Regular Meeting Minutes of May 12, 2026
- HEA Board Committee Assignments
- Resolution 45.2026.07, Appointment of Alaska Electric & Energy Cooperative, Inc. (AEEC) Voting Delegate (1-Year Term)
- Resolution 45.2026.08, Appointment of Alaska Power Association (APA) ACRE/CARE Representatives (1-Year Term)
- Resolution 45.2026.09, Appointment of Alaska Power Association (APA) Ad Hoc Scholarship Representatives (1-Year Term)
- Resolution 45.2026.10, Appointment of Alaska Power Association (APA) Government Affairs Representative (2-Year Term)
- Resolution 45.2026.11, Appointment of Alaska Power Association (APA) Railbelt Issues Forum Representatives (1-Year Term)
- Resolution 45.2026.12, Appointment of (ARECA) Insurance Exchange Board of Trustees Representative (4-Year Term)
- Resolution 45.2026.13, Appointment of National Rural Utilities Cooperative Finance Corporation (CFC) Voting Delegates (1-Year Term)
- Resolution 45.2026.14, Appointment of NRECA Voting Delegates (1-Year Term)
- Resolution 45.2026.15, Appointment of Northwest Public Power Association (NWPPA) Voting Delegates (1-Year Term)
- Resolution 45.2026.16, Destruction of Election Ballots
- Board Policy 305, Receipt & Consideration of Offers – Periodic review completed, and housekeeping revisions approved.
AEEC Annual Meeting of the Member
- Annual Meeting Minutes of June 10, 2025
Regular AEEC Board Meeting
- Regular Meeting Minutes of May 12, 2026
- AEEC Board Officers:
- Wayne Ogle, President
- Robert Wall, Vice President
- Jim Duffield, Secretary/Treasurer
- Dan Green, Deputy Secretary
- Resolution 01.2026.04, Appointment of National Rural Utilities Cooperative Finance Corporation (CFC) Voting Delegates