July 2023 Monthly Manager’s Report

July 11, 2023

Good afternoon! Sorry about the late report…the price I pay for taking two weeks off shrimping in Prince William Sound. With the Kenai sockeye run here, please be extra attentive when driving on what has quickly become congested roadways filled with hundreds of dip netters. Last month was yet again another busy month, which consisted of attendance at several business meetings and some previously mentioned personal leave. In addition, I hope everyone took the time to celebrate our Nation’s 246th Independence Day.

The following are brief updates on HEA’s current business activities and strategic goals that have taken place over the last month. As always, a more detailed report will be given on the day of the meeting.


We had a good month for safety. HEA experienced no Occupational Safety and Health Administration (OSHA) recordable incidents in June. The full safety report is included in this month’s Board packet.


Year-to-date margins of $2.3 million continue to exceed budget expectations by $1.4 million, due primarily to healthy revenues and cooler temperatures. As indicated by the graph at the end of this report, retail energy sales this year remain strong. In addition, although May revenues of $8.5 million were the same as last year, they fell short of the $9.0 million total cost of service for the month, resulting in a net operating loss of $0.5 million. The loss was driven primarily by the increased cost of power as major maintenance work was carried out.

The 2023 general retirement of $3.34M will be distributed to all remaining unretired margins from 1987 through 1991, plus 8.59% of the 1992 margins to over 10,800 members. Checks totaling $2,031,944 will be mailed mid-July to inactive members and those active members receiving more than $1,000. During the July billing cycles active members from those years will receive $690,961 in energy credits on their accounts averaging $133. Bad debts totaling $63,953 were recovered and another $553,033 went into unclaimed capital credits due to bad addresses.

Cost of power adjustment (COPA) filed with the RCA changes rate from 8.452 cents per kWh to 8.471 cents per kWh effective 7/1/2023.

The Chugach Electric Association rate case was recently filed with the RCA but was suspended due to an issue surrounding missing required information. The issue is expected to be remedied shortly. The case will be interesting to follow with the combination of interim refundable rates, challenging financial requirements, and the introduction of a pilot program for electric vehicle time-of-use rates.


Generation - Staff met with Emerson regarding the STG (steam turbine generator) controls replacement project, attended a demo of RedTag Pro Enterprise software as a possible upgrade for our LOTO (lock-out tag-out) software, and ran several additional scenarios in our generation modeling software.

Distribution - Annual oil samples on all station and generator step up transformers were completed. Work was performed on the Cannon AMR repeater at Missouri Street in Sterling to assist with remote meter reading efforts in this area. These meters will be changed out to the new Aclara TWACS metering system later this summer at which point, the repeater will not be needed. Other events include failed batteries at the K Beach Scadamate (switch), a failed lightning arrester at the Bradley Lake Hydro Plant, and a failed Cannon AMR repeater at the end of Funny River Road. All equipment failures have been remedied or will be shortly once replacement parts arrive.


Engineering Services - New Service Applications

The chart plots new service applications, for member jobs only, since 2017. There were 78 new service applications in June which is well above the average of 56.5 for this month over the last 6 years. Applications for new service continue to be 5-8% below the cumulative number of applications submitted by members over the previous two years.

Cyber Security & Information Technologies

Hacker groups and APT (advanced persistent threat) actors such as Russia and China continue their focus to cyber-attack the Apple infrastructure. Apple does excellent work fixing and protecting their software flaws, but this only works if you do your part and update your devices. The latest flaw allows the installation of applications without your knowledge. Take the time to review the apps installed on your iPhone & iPad and remove those you do not know or do not use. Finally, open your App store and tap your Profile icon at the top of the screen then tap Update all to confirm your device is safe.


Legislative Update Gov. Mike Dunleavy announced his vetoes to the Fiscal Year 2024 operating and capital budgets after signing them into law on June 19, 2023. An initial review of the enacted budget has not identified any energy appropriation-related vetoes. The governor left intact a $17 million appropriation for Round 15 of the Renewable Energy Grant Fund (REF). FYI, the opening of applications for Round 16 was recently announced. In his proposed budget released in December, Gov. Dunleavy included $7.5 million for the REF projects, but the legislature increased the amount in its amended budget.

Power Cost Equalization (PCE) for FY24 has also been fully funded at just over $48 million, and several appropriations for Alaska Energy Authority (AEA) programs were also left in place. According to media reports, the governor vetoed about $200 million from the overall budget.

The budget went into effect on July 1, the start of the new state fiscal year.

Alaska Power Association (APA) Federal Legislative Conference – Last month, Keriann Baker and I had the opportunity to meet with lawmakers, federal agency officials, and national trade association representatives to discuss issues of importance to the Alaska electric utility industry. The meetings were very productive and provide us a great deal of new information pertaining to new federal grant opportunities.


  • Regular HEA Board Meeting
    • Regular Meeting Minutes of June 13, 2023
    • Board Policy 702, New Employee Relocation Expenses – Annual review completed, and housekeeping revisions approved.
    • Board Policy 709, Jury & Witness Duty – Annual review completed, and housekeeping revisions approved.