Earlier this month, Homer Electric Association submitted a request to the Regulatory Commission of Alaska to approve a 6.5 percent base rate increase for electricity.
If approved, rates would be raised from 12.718 cents per kilowatt hour to 13.545 cents.
According to HEA, this equates to an increase of $4.96 per month for residents using 600 kilowatt hours of electricity, which is the average amount used by a household in the area.
"Some use more, some use less, but generally 600 kilowatts is a good number if you're trying to get an average," said HEA spokesman Joe Gallagher.
The increase equates to approximately $2.8 million in additional revenue for HEA, which will be used to facilitate various projects, including the power line replacement.
"There have been several projects where we have replaced aging underground line," Gallagher said. "The line that was replaced was upwards of 20 to 25 years or older. The lines are now at the stage where they do need to be replaced (and) we are going through the system and doing this work."
HEA also is in the process of replacing the Diamond Ridge substation in Homer, which most likely won't be completed until 2009, and exchanging mechanical meters with automated digital meters.
In a recent press release, HEA noted that if its proposal is approved, their base rate only will have increased 4.7 cents since 1997, whereas other sources of energy such as oil, natural gas, propane and gasoline have more than doubled.
"We all know energy costs are going up, and electricity is unfortunately in the same boat," Gallagher said. "While it has gone up ... it's sometimes not as significant an increase as in some areas."
If the Regulatory Commission of Alaska decides to approve HEA's proposal, new rates would be in effect by April 1.
Hannahlee Allers can be reached at email@example.com.
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