Monthly Manager’s Report


September 13, 2022


Good afternoon! Without fail, it seems to have transitioned rather quickly into hunting season and cooler weather. Dropping temperatures are always good for our business. As we roll into one of the busiest seasons of year, we kick-off our fall schedule with more local Area Meetings, Member Appreciation Day, and the Board Budget Workshop. The following are brief updates on HEA’s current business activities and strategic goals.


We did have an incident last month, which was considered an Occupational Safety and Health Administration (OSHA) recordable. The good news, although it did require medical attention, the incident was not serious, and the employee is expected to make a full recovery. A complete safety summary is included in this month’s Board packet.


Kilowatt hour (kWh) sales rebounded last month bringing our year-to-date kWh sales closer to budgeted expectations.

Operating revenues for the month of July were just over $9.0 million, exceeding budgeted expectations by $1.0 million. This puts HEA back on track for budgeted revenues. Higher than expected fuel costs in the first half of year due to the lack of availability of Bradley Lake is offset by areas of reduced spending resulting in HEA total Cost of Service tracking almost perfectly with budgeted expectations through July. The cost of providing electric service for July sits at $8.8 million. HEA net operating margins year-to-date through July are approximately $1.5 million.

One of the benefits of financing with and being a member of the National Rural Utilities Cooperative Finance Corporation (CFC) is that we receive both capital credit patronage allocations and capital credit retirements on an annual basis. CFC retired $231,000 in capital credit to HEA in July and $102,000 to AEEC last month.




HEA’s generation facilities continued to operate very well with no unscheduled outages during the month of August. HEA staff continue to proactively work on procuring critical spare parts in advance of several upcoming maintenance projects for the Nikiski Combined Cycle (NCC) plant and Soldotna Combustion Turbine (SCT) plant. However, the long lead times and lack of availability of parts continue to increase the time required for repairs and maintenance. NCC had a bit of a setback and was not in compliance with outfall permit copper limits for August. NCC staff continue to submit additional samples in attempt to lower the August monthly average, as well as have installed a new sample line for the outfall composite sampler. Plant personnel diligently perform additional tasks to improve the process with collaboration and assistance from Cook Inlet Environmental.

The most notable event of the month was the wet weather that has resulted in an unexpected, unseasonably high lake level at Bradley Lake. Because of the high lake level and the anticipated addition of more water for the balance of August and September, a pending spill condition was declared on August 19th. During peak hours of the day, we can use our full 14 MW share plus additional capacity available from the other utilities. Inflows to Bradley Lake have been significantly higher than forecasted with both July and August inflows falling into the 10-30% probability range. What had been projected to be a relatively normal inflow year is resulting in an abnormally high inflow year. This increased water availability is warranting an increase in hydro scheduling that will ultimately reduce the thermal generation for the remainder of the water year which ends next May.

The BESS has continued operating in automatic generation control (AGC) providing system regulation power in August. The BESS also provided proper response to several Railbelt system events in August.


Member Services

HEA recently began our annual Area Meetings. We hosted a lunch time event in Seldovia last month. These events are great opportunities for our members to visit with HEA representatives and ask questions about their electric cooperative. Thank you to Directors McKittrick, Flora, and Furlong for attending.

Lastly, some GREAT news, we received a second grant related to House Bill 69, in the amount of $78,248 at the end of August. As you recall, House Bill 69 provides funding to electric utilities to address delinquent residential payments due to Covid-19.


Recently HEA repelled a Crypto Coin mining attack. The attack, if successful, provides miners to covertly use our computer servers and electricity to create crypto currency. In addition, the Cooperative recently secured our AK 220 license from the Federal Communications Commission (FCC), continued work on the Kenai/Nikiski fiber project, and hosted a consultant providing process improvement recommendations.


Alaska Power Association (APA) Annual Meeting

The APA Annual Meeting was held in Ketchikan last month and was an excellent experience for Keriann Baker, Director of Member Relations, and Director Erin McKittrick. It was great to have support and attendance by our Board of Directors, thank you. Copper Valley Electric Cooperative in Valdez will host next year’s APA Annual Meeting.

National Rural Electric Cooperative Association (NRECA) & Cooperative Finance Corporation (CFC) Regional Meeting

As a reminder, I will be attending the NRECA & CFC Regional Meeting in Portland, Oregon, which is scheduled for September 27-29, 2022.

Regulatory Commission of Alaska (RCA)

The RCA raised concerns regarding the ERO’s governance and provided a list of issues to the ERO which will require modification of its bylaws. The ERO subsequently has held multiple workshops to address these required bylaw changes. Any changes made will require a supermajority vote of the ERO board. The changes will be voted on at the September 12th Board meeting. As a reminder, should the RRC’s application not be certified by the RCA, the RCA is required to stand up the ERO. A final order regarding the application is due September 23rd.

Board of Directors' Meeting Approvals | September 13, 2022

Regular HEA Board Meeting

  • Regular Meeting Minutes of August 9, 2022
  • Special Meeting Minutes of August 30, 2022
  • Resolution 45.2022.25, Authorizing the Amendment of the NRECA 401(k) Pension Plan Adoption Agreement “A”, RUS#: 02005-001
  • Board Policy 501, Service Rules & Regulations – Periodic review completed with housekeeping revisions approved.