November 21, 2023
SUMMARY
Good afternoon. The month of November looks to be quite busy as we focus on the 2024 budget and the typical numerous weather-induced outages. Although it is a busy time, toward the end of November we start the holiday season...a season that seems to start earlier and earlier every year! As we continue to migrate indoors for the winter season, I hope this finds you and your family staying healthy.
Last month we were able to wrap up our Annual Community Area Meetings, Member Appreciation Day, and Strategic Planning Workshop. A big thank you to the staff and Board for contributing.
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.
SAFETY
Unfortunately, we did have an Occupational Safety and Health Administration (OSHA) recordable incident in October. The full safety report is included in this month’s Board packet.
FINANCIAL OVERVIEW
Total revenue for the month of September was $8.48M. The cost of service was $8.74M and resulted in a monthly operating loss of $0.26M for HEA. Year-to-date operating margins are $1.08M and total margins are $1.79M for a modified debt service coverage ratio of 1.45, compared to 1.30 last year. Equity to assets is holding at 45%, the same as last month, and within the target range.
HEA supplemented its COPA filing with the Regulatory Commission of Alaska (RCA) for an updated Cost of Power Adjustment (COPA) rate of 8.191 cents per kWh, effective November 1st. This reflects the approval of the Hilcorp Settlement and Release Agreement.
Rural Utility Service (RUS) reviewed Alaska Electric and Energy Cooperative's (AEEC) Letter of Interest (LOI) dated July 10, 2023 and has invited AEEC to submit a complete application for the Kenai Renewable Energy Storage Project in the amount of $100M of which up to 60% of the amount will be eligible for forgiveness.
RELIABILITY
Distribution - Kenai Dispatchers completed training on the new Outage Management System (OMS) which has been very timely with the recent inclement weather causing multiple outages.
CUSTOMER SERVICE
Engineering Services - New Service Applications
The chart below plots the current new service applications, for non-HEA jobs only, alongside the previous six years. There were 46 new service applications in October which is above the average of 32 for October over the last 6 years. The number of applications to date in 2023 continues to lag 12-15% behind the last two years for cumulative applications through this month.
Member Relations
- The Member Relations department had a busy October. We wrapped up our Annual Community Area Meetings, attended the Tsalteshi Trails Spooktacular, and Member Appreciation Day. As previously mentioned, a big thank you to staff and board for contributing to the success of this year’s Community Meetings.
Cyber Security & Information Technologies
October was Cyber Security Awareness Month and HEA participated in several tabletop exercises. The theme this year was “Staying safe online is easy with these four steps:”
- Use Strong Passwords and change them yearly.
- Use MFA (Multi-Factor Authentication) like text, key, face, or thumbprint.
- Recognize and Report Phishing emails and texts.
- Update Software everywhere.
Practice these simple tasks to keep us all safe online!
BUSINESS & COMMUNITY RELATIONSHIPS
Recent News
Alaska Governor Mike Dunleavy recently outlined a proposal to increase energy security for Alaska’s Railbelt through increased Cook Inlet gas production. The announcement previews legislation that will be introduced in the upcoming legislative session to increase the production of Cook Inlet natural gas resources. The proposal will make investment and development in new production more attractive to businesses and unlock the significant resources still in the Inlet while the Administration continues to work on long-term energy security solutions.
BOARD OF DIRECTORS' MEETING APPROVALS | November 21, 2023
Regular HEA Board Meeting
- Regular Meeting Minutes of October 10, 2023
- Special Meeting Minutes of October 31, 2023
- Resolution 45.2023.22, Establish Date, Time, and Location of the 2024 Annual Meeting of the Members
- Resolution 45.2023.23, State Matching Support of GRIP Topic 3
- Board Policy 201, Qualifications for Directorship – Periodic review completed with housekeeping revisions approved.