December 13, 2022
SUMMARY
Good afternoon and Happy Holidays! As I write this, it is hard to believe 2022 is coming to an end….and we have another winter storm heading our way. Compared to the previous pandemic impacted two years, it has been a wonderful year as we get some normalcy back into our routine. Our industry continues to evolve and in doing so work life seems to get busier each year as “crunch time” has become business as usual.
A huge thank you to all the employees and directors who again have done so much this past year in contributing to HEA’s success. I am very proud to be part of a wonderful, caring organization that does so much for our communities…often unnoticed. Thank you for a wonderful year! I look forward to moving into 2023 with the enthusiasm and confidence we need to meet our members needs.
I tried to shorten up my report for the holidays...you are welcome. Please ask questions as we have a lot going on and I suspect next month I will go back to my lengthy reports. 😊 The following are brief updates on HEA’s current business activities and strategic goals that have taken place over the last month.
SAFETY
Another great month to report there were no personal injuries in November. A complete safety summary is included in this month’s Board packet.
FINANCIAL OVERVIEW
Strong financial performance continues as we head into the winter months. Energy (kWh) sales for the month of October increased as expected over the previous month. Revenues for the month of October were $8.96 million and cost of service was $8.78 million, resulting in a monthly operating margin of $178,560. The margins for the month pushed our year-to-date operating margins to just under $950 thousand, which is just shy of budgeted expectations.
The 2023 operating and capital budgets for HEA and AEEC will be presented for final review and approval during the December Board meetings. Many thanks to our employees for preparing realistic budgets and to the Board for a thorough review.
The HEA Retail Energy Usage graph below provides a comparison of the previous six years. As illustrated in the graph, data for 2022 is running in line with the 5-year historical average.
RELIABILITY
Distribution
Over the past few weeks, the Kenai Peninsula has experienced winter weather that included heavy snowfall. Although heavy, we were fortunate enough to avoid the 24” dump Anchorage recently received. Nonetheless, HEA’s line crews and dispatchers have been working long hours responding to outages…kudos to their hard work and dedication in these challenging conditions. As discussed during the Area Meetings this last fall, real time outage information can be found by visiting HEA’s Outage Map on our website.
Generation
The month of November went relatively smooth at the Nikiski Combined Cycle (NCC) plant with the only issue being some arcing on the CT (combustion turbine) Collector Ring. Operators were able to catch the issue early and unlike the resulting one-month outage for the same issue in 2016, the vendor was able to make the repairs without an outage. Great job to the NCC staff for catching the issue early!
HEA Staff continues to work with the Railbelt utilities and fuel suppliers as we attempt to secure a fuel supply beyond March 31, 2024. Many options are being considered and is a priority for all large natural gas users on the Railbelt.
MEMBER | CUSTOMER SERVICE
Member Relations
In true Christmas spirit, every December for the past four years the Member Relations team has launched their HUG (Home Utility Gift) program. Members can nominate a family in need to receive one of six $100 HUG energy credits by submitting an online nomination form via the HEA website or in-person at one of the HEA offices. Two winners are announced each week from December 2 through December 16.
Engineering Services
The chart below plots the new service applications, for HEA contractor jobs only, and provides a comparison to the previous five years. As illustrated in the chart, 2022 was a good year as we hit a new 6 year high in new service installations!
STRATEGIC SERVICES
can potentially provide a competitive cost of energy. On December 5th, proposals for potential offshore wind and two geothermal sites were submitted in Round 15 of the Alaska Energy Authority (AEA) Renewable Energy Fund (REF) grant program in the hopes of securing funds to further study these sites. The REF provides reconnaissance and feasibility grants for selected renewable energy projects around the state. AEA evaluates and ranks grant applications recommendations to the governor and legislature for inclusion in the state’s budget.
BUSINESS & COMMUNITY RELATIONSHIPS
Alaska Power Association (APA)
The 2023 Alaska legislative session is set to begin the last week of January and into the first two days of February. Please watch for emailed updates from Alaska Power Association’s (APA) Deputy Director Michael Rovito, who will be keeping us appraised of all state and federal legislative activities. Please let Miranda Boehmler know if you would like to join APA’s legislative email updates.
As usual, HEA plans to host our annual Legislative Dinner and we will provide more details as this popular event comes together. We look forward to another good turnout at the dinner and conference. Please let Miranda know if you plan to attend the APA Legislative Conference. We plan to make personal visits with all our local representatives.
BOARD OF DIRECTORS' MEETING APPROVALS | DECEMBER 13, 2022
Regular HEA Board Meeting
- Regular Meeting Minutes of November 15, 2022
- Resolution 45.2022.27, Approval of the 2023 Operating Budget
- Resolution 45.2022.28, Approval of the 2023 General Plant Budget
- Resolution 45.2022.29, Approval of the 2023 Construction Work Plan Budget
- Board Policy 403, Materials and Equipment Sales – Periodic review completed with housekeeping revisions approved.
- Board Policy 503, Energy Conservation – Periodic review completed with housekeeping revisions approved.
- Board Policy 705, Benefits Package for Non-Bargaining Employee – Periodic review completed with housekeeping revisions approved.
- Board Policy 722, Safety Program – Periodic review completed with housekeeping revisions approved.
Regular AEEC Board Meeting
- Regular Meeting Minutes of November 15, 2022
- Resolution 01.2022.16, Approval of the 2023 Operating Budget
- Resolution 01.2022.17, Approval of the 2023 Construction Work Plan Budget
- Resolution 01.2022.18, Approval of the 2023 Generation Project Budget