HEA’s ballots are being mailed out during the month of October asking HEA ratepayers to vote for self-regulation vs regulation by the RCA. A lot has been said about this issue, but what it boils down to is:
Do you trust your elected HEA Board of Directors to make the decisions for you or do you want a commission appointed by the Governor seated in Anchorage to make the decisions? (The RCA only weighs in on our tariffs, rates, and what format our bills take, not the everyday operations, our budgets, our capital projects or who we hire.)
I have been on the HEA Board Of Directors since 2011. In that time, HEA has easily averaged $1 million per year in attorney fees and staff time to comply with the requests from the RCA and responding to the different dockets that have come up which HEA has an interest in. With self-regulation most of these expenses would be eliminated.
A number of factors came in play causing the board to look for new avenues to reduce our costs. Our warm winters have caused quite a drop in revenue. The “Wheeling Tariff” we requested in late 2013 has been pushed down the road by the RCA and now has been tied up in the courts. We had expected that the tariff would bring in around $1 million per year, plus we have spent considerably on legal and staff costs trying to resolve this issue. Since 2014 we have eliminated 9 positions and combined positions when we have retirements, cut out most overtime, and tightened up many items in the budget. By going to local control, we expect to save at least $500,000 in staff and legal costs. Plus our ratepayers will save around $340,000 in RCA charges.
To combat this situation, your HEA Board of Directors applied for a rate increase last fall, and since has spent about $900,000 working with the RCA to approve the new rate. We expect to spend a total of $1.3 million by the time we are done. This extra expense will cause an increase of roughly $.02-.03/kWh which could be avoided by self-regulation.
Your ballot will arrive about the same time as your October HEA bill. You will have 30 days to mail it in. The deadline should be noted on your ballot.
I recommend a “YES” vote to make HEA the secondnd Railbelt utility to be self-regulated along with the city of Seward.
If you still have any questions, you can check out the HEA web site or contact any of the directors. My email is: dwaisanen@homerelectric.com or give me a
call at 262-6298.
Dick Waisanen, Soldotna
HEA Board of Directors
In October all Homer Electric Association (HEA) members will get a ballot in the mail. One household – one vote. The only issue on the ballot is the question: Shall Homer Electric Association, Inc. be exempt from regulation by the Regulatory Commission of Alaska?
With a Yes vote we deregulate — we would no longer retain the services of the Regulatory Commission of Alaska.
With a No vote we remain regulated — we would retain the services of the Regulatory Commission of Alaska.
Our household will vote “no” and these are the reasons:
1. I appreciate the service provided by the Regulatory Commission of Alaska (RCA) and I like the way they take care of the business of watching out for consumers.
2. The RCA provides great value. Our household paid $0.31 (31cents) for the Regulatory Cost Charge in our August bill. At less than $4 per year — the RCA is cheap insurance!
3. The Commission is a vital part of a series of checks and balances for Kenai consumers of electricity. HEA is the only electricity provider for Kenai customers. We cannot take our business elsewhere! Currently if consumers have an issue with HEA they can lodge a complaint with HEA. If the customer is not satisfied with HEA’s response the complaint may be escalated to the RCA. The consumer can argue the complaint before the Commissioners who are a neutral third party. A decision by the Commission is generally final although in rare instances a dispute can be further escalated to the Alaska Superior Courts. If members vote (Yes) to deregulate, then the example above of a customer with a complaint changes. The customer with a complaint can only bring it to the HEA Board of Directors. A customer would have the option to take the complaint to the Superior Court (big money) but that is something that most consumers would not have the resources for. If the HEA Board rules against the consumer, the decision would be final. The Board becomes both a party to the disagreement, and the judge making the decision! This is a conflict of interest. The RCA provides the check and balance that customers need.
4. Our families no vote is not about whether we trust the Board. We do trust this current board and the staff of HEA. They are our friends and neighbors. It’s not personal, we just believe that there would be a conflict of interest if deregulation passes.
5. HEA makes the argument that approximately $450,000 per year is spent on the RCA and that this expense will go away if deregulation passes. I say no way, HEA. There will still be legal/regulatory expenses for other (HEA vs utility (eg: Chugach/AL&P/MEA/GVEA)) disputes that will still be argued before the RCA. There will still be (even bigger) legal bills if rate cases (eg: Tesoro) are taken to the Superior Court (instead of the much more affordable RCA). Big savings? I don’t think so.
Peter McKay
Kenai