December 17 2024
SUMMARY
Happy Holidays! As we approach the end of another calendar year, it’s remarkable how quickly time seems to pass. This season offers the perfect opportunity to reflect on our achievements and express gratitude for the dedication and hard work of our Board of Directors, employees, and everyone who contributes to Homer Electric Association's success.
This year has been incredibly busy, filled with challenges and accomplishments, and I deeply appreciate the significant efforts of our Board in making informed decisions that prioritize the best interests of our members. To our employees, thank you for your unwavering commitment to our mission and your contributions, often behind the scenes, to our communities’ well-being.
As we look ahead to 2025, we anticipate another year filled with opportunities and meaningful progress for the cooperative. With continued dedication and teamwork, I’m confident we’ll work together to meet the needs of our members and make steady strides toward our shared goals. Here’s an overview of HEA’s current business activities and focus areas.
SAFETY
As we close out the year, it’s a good time to reflect on one of our core commitments: safety. Our mission to provide "safe, reliable, and affordable power" begins with putting safety first—and for good reason. I’m proud to report that November passed without any recordable Occupational Safety and Health Administration (OSHA) incidents. This achievement highlights our team's dedication to maintaining a safe work environment throughout the year.
Looking ahead to the new year, let’s continue to prioritize safety, building on the strong foundation we established in 2024. This month's board packet includes the full safety report with additional details.
FINANCIAL OVERVIEW
Financial Update – Operating revenue of $9.5M for October was not quite enough to cover the total cost of service, resulting in a net monthly operating loss of $558k. Total year-to-date margins of $1.1M are still $1.4M above budgeted expectations. This is mainly driven by reduced operations, maintenance, and administrative expenses, which are offsetting higher purchased power costs.
The 2024 general retirement of capital credits was completed in early December. Energy credits of $697k were applied to 4,962 active accounts, and $2.3M in checks for 5,738 members will be mailed on December 16. The retirement also supported the recovery of $82k in bad debt. This fully retires the remaining margins from 1992 and 14% of 1993 margins.
Lastly, the 2025 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 compares the previous six years. As illustrated, data for 2024 is running in line with the 5-year historical average.
RELIABILITY
Generation – November brought unusually cold weather, leading to adjusted energy loads throughout the week and slightly higher demand on weekends. Nikiski Combined Cycle (NCC) served as the baseload generation, while the Soldotna plant operated for monthly testing and to support an unscheduled islanding event caused by a fallen tree at Russian River campground.
Bradley Lake water continues to be carefully conserved in preparation for the major islanding scheduled for 2025. While HEA’s share of Bradley generation was only used for islanding events in November, other utilities heavily relied on it to manage their reservoir levels.
On the maintenance front, General Electric (GE) representatives visited NCC to discuss the planned refurbishment of the NCC Combustion Turbine Generator and Exciter, scheduled for 2027. Tesla completed scheduled maintenance on the battery system, including repairs to the Megapack. Additionally, the new Bradley residence has been successfully completed.
Distribution/Transmission – Distribution right-of-way (ROW) clearing is progressing as planned and remains under budget. The vendor has completed clearing the Diamond Ridge circuits and is now moving to clear the Hatfield circuits. Additionally, our transmission maintenance clearing is fully complete.
CUSTOMER SERVICE
Member & Public Relations – In the spirit of the holiday season, the Member Relations team continues its tradition of spreading cheer with the HUG (Home Utility Gift) program. Each December, members can nominate a family in need to receive one of ten $100 HUG energy credits. Nominations can be submitted through an online form on the HEA website or in person at any HEA office. Two winners, one from the north end and one from the south end, are announced weekly from December 6 through December 27, bringing a little extra warmth and support to families during the holiday season.
Engineering Services, New Service Applications – the chart below illustrates new service applications and provides a historical comparison.
CYBER SECURITY & INFORMATION TECHNOLOGIES
With the growing presence of Internet of Things (IoT) devices in our homes and workplaces, it's crucial to remain vigilant about the cybersecurity risks they can present. Recent incidents have shown how poorly secured IoT devices, such as smart cameras and thermostats, can be exploited by hackers to gain unauthorized access to networks.
To protect yourself and your data, ensure all IoT devices are updated with the latest firmware, change default settings to unique and secure configurations, and, when possible, place these devices on a separate network from your primary devices. Taking these precautions can go a long way in safeguarding your personal information and maintaining the security of your digital environment.
BUSINESS & COMMUNITY RELATIONSHIPS
Alaska Power Association (APA) – The 2025 Alaska legislative session is set to begin on January 21, 2025. Please watch for emailed updates from Alaska Power Association’s (APA) Lobbyist Michael Rovito, who will be keeping us appraised of all state and federal legislative activities. Please let Jenniffer 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 Jenniffer know if you plan to attend the APA Legislative Conference. We plan to make personal visits with all our local representatives.
Railbelt Reliability Council (RRC) – The RRC Board of Directors has announced that Edward Jenkin will serve as the organization’s new President and Chief Executive Officer beginning January 3, 2025. Jenkin is a seasoned executive with a strong commitment to supporting the electric utility industry through efficient regional collaboration, as recognized by Alaska’s legislative framework. He brings extensive experience with the institutions and infrastructure of the Railbelt electric system, along with deep expertise in reliability standards and infrastructure planning.
The RRC is Alaska’s first Electric Reliability Organization (ERO), certified under statutes passed in 2020 and regulations adopted in 2021. Certificated as the ERO for the Railbelt electric system in 2022, the RRC joins a small group of similar organizations that have supported electric consumers across the Lower 48 and Canada since the 1960s. (Source: Railbelt Reliability Council)
Alaska State Legislature – Governor Dunleavy released his Fiscal Year 2026 budget proposals which you can review with supporting information at https://omb.alaska.gov/fiscal-year-2026-proposed-budget/.
BOARD OF DIRECTORS' MEETING APPROVALS | DECEMBER 17, 2024
Regular HEA Board Meeting
- Regular Meeting Minutes of November 12, 2024
- Resolution 45.2024.18, Approval of the 2025 Board of Directors Regular Meeting Schedule
- Resolution 45.2024.20, Approval of the 2025 Operating Budget
- Resolution 45.2024.21, Approval of the 2025 General Plant Budget
- Resolution 45.2024.22, Approval of the 2025 Construction Work Plan Budget
- Board Policy 108, Emergency Preparedness & Incident Management – Periodic review completed, and housekeeping revisions approved.
- Board Policy 401, Contracting & Purchasing - Periodic review completed, and housekeeping revisions approved.
- Board Policy 403, Material & Equipment Sales - Periodic review completed, and housekeeping revisions approved.
Regular AEEC Board Meeting
- Regular Meeting Minutes of November 12, 2024
- Resolution 01.2024.05, Approval of the 2025 Board of Directors Regular Meeting Schedule
- Resolution 01.2024.06, Approval of the 2025 Operating Budget
- Resolution 01.2024.07, Approval of the 2025 General Plant Budget
- Resolution 01.2024.08, Approval of the 2025 Construction Work Plan Budget