SUMMARY
Good afternoon! It was a pleasure to host another successful Annual Meeting. There's always a strong sense of accomplishment following such an important event, and this year was no exception. We had excellent member turnout, and the meeting ran smoothly thanks to the hard work, professionalism, and dedication of our employees.
Congratulations to Jim and Dan on their re-election to the Board, and congratulations and welcome to Peter, HEA’s newest director. I’d also like to thank all the candidates who ran for a seat this year. Your participation highlights the strength and cooperative spirit that makes HEA unique!
Given the Annual Meeting membership presentation and activities, I will keep this month’s report brief.
SAFETY
There were no Occupational Safety and Health Administration (OSHA) recordable incidents in April. One minor personal injury occurred during the month, with details provided in the Safety report.
FINANCIAL OVERVIEW
For the period ending March 31, 2026, HEA reported year-to-date operating revenue of $35.29 million, exceeding both the prior year results of $29.32 million and the year-to-date budget of $31.28 million. For the month of March, operating revenue totaled $11.56 million, while total cost of electric service was $13.45 million, resulting in a monthly operating loss of approximately $1.89 million. Year-to-date, total cost of electric service was $33.67 million, producing operating margins of $1.62 million and total margins of $1.71 million. Purchased power remained the primary cost driver, totaling $23.39 million year-to-date and $9.95 million for March, contributing to a year-to-date power cost-to-revenue ratio of approximately 66.3%. HEA’s modified debt service coverage (MDSC) was 1.74, compared to 1.66 for the same year-to-date period in 2025, indicating continued compliance-oriented financial coverage.
RELIABILITY
The Nikiski Combined Cycle (NCC) plant experienced an early shutdown on April 15, two days ahead of the scheduled outage, due to a leak in equipment associated with the heat recovery system. Repairs were completed, and the Heat Recovery Steam Generator (HRSG) was successfully pressure tested.
Operations and Information Technology staff implemented a new SCADA system in close collaboration with Generation and Operations staff to maintain plant communications. Work continues on the NCC Repower Project, with purchase orders for major equipment, including the Generator Step-Up Transformer and the second Soldotna Gas Compressor.
Bradley Lake Hydroelectric is preparing for its annual maintenance outage, which will begin on May 14 and continue through May 22.
MEMBER/CUSTOMER SERVICE
ENGINEERING SERVICES, NEW SERVICE APPLICATIONS – The chart below shows the new service applications and provides a historical comparison.
ANNUAL MEETING OF THE MEMBERS – As noted earlier, both the Annual Meeting of the Members and this year’s election were successful. We’ve compiled the member satisfaction survey results, along with historical voting data and detailed election reports, all of which will be shared with the Board for review.
If you have any suggestions or feedback—whether your own or from members—for improving next year’s 77th Annual Meeting, we welcome your input.
CYBER SECURITY & INFORMATION TECHNOLOGIES
Phishing is still the number one-way attackers get into utilities and other organizations, and it's been turbocharged by AI. AI-generated phishing emails are now several times more effective than traditional ones, meaning the misspellings and clunky grammar we used to rely on as warning signs are mostly gone. Today's scam emails look polished, reference real coworkers or vendors, and often create a sense of urgency ("your account will be locked," "please approve this invoice today"). Before you click a link or open an attachment, pause, and ask: was I expecting this? When in doubt, don't reply to the message. Call the sender using a number you already trust. A ten-second pause may be the best cybersecurity tool you have.
BUSINESS & COMMUNITY RELATIONSHIPS
State Legislative Activity – With 12 days remaining in the regular legislative session, activity in Juneau has intensified as lawmakers work through final priorities and negotiations. In addition to the Fiscal Year 2027 budgets, significant attention continues to focus on Governor Mike Dunleavy’s oil and gas property tax legislation related to the Alaska LNG (liquified natural gas) project. While the Governor has encouraged lawmakers to pass the bills before adjournment, House and Senate committees have already adopted several substantial changes that differ from the administration’s original proposals.
The House Finance Committee’s committee substitute for the FY27 capital budget increased the Renewable Energy Fund (REF) Round 18 appropriation from $5.3 million to approximately $14.6 million, enough to fund the first nine projects on the recommendation list. Because the House increased the amount approved in the Senate version of the capital budget, the REF appropriation will likely be addressed during capital budget conference committee negotiations if one is convened.
The Senate also passed its version of the FY27 operating budget this week, sending the bill back to the House for a concurrence vote. If the House does not concur with the Senate’s changes, a conference committee will be formed. This milestone also triggers the Legislature’s “24-hour rule,” allowing committees to schedule hearings with significantly shorter notice than earlier in the session. Despite the name, the rule does not always require a full 24-hour notice period, as hearings may be scheduled for the following day.
The Senate Labor and Commerce Committee also continued work last week on SB 250, sponsored by Sen. Löki Tobin, regarding data centers and electric utility infrastructure. The bill would require data centers to fully fund their associated infrastructure and energy costs without shifting expenses to other utility members, while also addressing system reliability, fuel adequacy, backup power requirements, and customer-specific rate structures.
In addition, the Senate Labor and Commerce Committee introduced a Committee Substitute (CS) for SB 150 related to net metering. The CS seeks to address concerns around subsidization of net metering customers by non-net metering customers and program administration expenses that would drive up electric rates.
BOARD OF DIRECTORS' MEETING APPROVALS | May 12, 2026
Regular HEA Board Meeting
- Regular Meeting Minutes of April 14, 2026 and May 7, 2026
Regular AEEC Board Meeting
- Regular Meeting Minutes of February 10, 2026
- Official Notice of the AEEC Annual Meeting