Beginning January 1, 2026, electric rates for members of Homer Electric Association (HEA) will change, with base rates expected to increase $3.77 a month for residential members using an average of 550 kWh and the Cost of Power Adjustment (COPA) decreasing $9.49 for the same monthly usage. The decrease in the upcoming quarter’s COPA is a result of a larger percentage of HEA’s energy coming from Bradley Lake hydropower, rather than natural gas fueled sources. The Homer Electric Association, Inc. (HEA) Board of Directors approved the 4% adjustment in base rates in November, and the proposed increase is now before the Regulatory Commission of Alaska (RCA) for final approval.
The base rate request before the RCA is being made using the Simplified Rate Filing (SRF) process as allowed by the RCA. If approved, this adjustment in base rates will apply to both residential and commercial customer classifications. The revenue generated through base rates is used to run the daily operations of the utility, including labor and materials.
“While you never like to increase base rates, the good news is the decrease in the COPA will more than offset the base rate increase during the upcoming cold winter months,” said HEA Chief Financial Officer Sarah Lambe, noting that the COPA is updated by HEA quarterly. The COPA, shown as a line item on members’ bills, reflects the cost HEA pays for fuel to produce electricity, and it is a direct pass-through to members with no markup. Nearly 90% of HEA’s electricity is generated with natural gas.
Lambe said the request to adjust base rates is driven primarily by the significant inflation affecting utilities since the COVID-19 pandemic. “Over the past five years, the cost of many materials used regularly in our operations has more than doubled, and general inflation in Alaska has exceeded 19%,” she said. “During that same period, HEA’s rates have increased only 6.5%.”
“While we have been successful in limiting rate impacts for members, action is now required to address both overall inflation and the extraordinary cost increases within the industry,” she added.
About Homer Electric Association:
Homer Electric Association (HEA) is a member-owned, not-for-profit electric cooperative serving more than 25,000 members across the Southern Kenai Peninsula. Spanning from Sterling to South Kachemak Bay, HEA maintains over 2,500 miles of energized line across a 3,166-square-mile service area. With offices in Homer and Kenai, HEA is dedicated to delivering safe, reliable power while supporting and strengthening the communities it serves.
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For additional information on this press release, please contact Mary Bowe, HEA Public Relations Strategist at MBowe@HomerElectric.com or 907.435.1695.