HEA rate hike takes effect

Average bills increase $3.32 to cover costs

Posted: Monday, May 21, 2007

When your next electric bill arrives, it is likely to be bigger.

The Regulatory Commission of Alaska (RCA) has signed off on per-kilowatt-hour increase in Homer Electric Association’s base rate, the utility announced.

The increase lifts the base rate from 12 cents per kilowatt-hour to 12.6 cents. The average residential ratepayer using 600 kilowatt-hours of juice a month will see their monthly bill jump about $3.32.

The new rate, which went into effect May 7, is needed to cover increasing costs, the utility said, in a press release May 11.

“While Homer Electric has strived to keep rates as low as possible, a small increase is necessary to keep pace with the rising costs of materials needed to maintain and operate electric facilities,” HEA General Manager Brad Janorschke said. “HEA will continue to work on projects designed to stabilize rates charged to its members.”

HEA’s base rate has grown from 8.8 cents in 1997 to 12.6 cents today, while the cost of other energy sources — oil, natural gas, and gasoline — has doubled, HEA said.

HEA Public Relations Coordinator Joe Gallagher said Wednesday that HEA is seeing increases in everything from construction materials to gasoline for its vehicles. The rate jump is basically a matter of keeping up with inflation, he said.

While the base rate has climbed slowly, another element of HEA’s monthly bills — the wholesale power cost rate adjustment — rises and falls with the market price of the natural gas HEA buys and uses to produce electricity. With a small lag time, ratepayer bills are adjusted quarterly to reflect the gas price change, Gallagher said.

Hal Spence can be reached at hspence@ptialaska.net.

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