HEA receives federal grant

Posted: Thursday, August 14, 2003

Homer Electric Association realized a significant windfall Monday when the U.S. Department of Energy awarded the member-owned utility $1.9 million. The grant will pay for installation of the submarine cable that crosses Kachemak Bay linking the utility's energy network with south Kachemak communities.

The submarine cable, which was completed last fall, is part of a $4-million effort to improve the reliable, affordable energy to Halibut Cove, Nanwalek, Port Graham and Seldovia. The cable also carries fiber optic lines to those residents in anticipation of possible future Internet connections.

U.S. Sen. Ted Stevens' office gave notice that funds would be available for half of the project's cost from the Fiscal Year 2002 Energy and Water Development Appropri-ations bill, and Homer Electric began installing the cable in November 2001.

In June 2002, then Gov. Tony Knowles signed a bill for a state grant to appropriate another $2 million to the project.

Homer Electric paid the initial expenses to lay the submarine, subsurface cable. The federal grant will essentially reimburse the organization.

Interim general manager Rick Eckert said federal money that goes to the project will keep the utility from having to raise the price of delivering electricity to those communities.

"Homer Electric has unique situation. We are regarded as a rail belt utility, but we have this remote Bush community," he said of the south Kachemak villages. "Our members are able to pay rates that are rail-belt rates and are not having to pay the high diesel Bush rates."

The state funds are going to new backup generators for Port Graham and Seldovia, he said. The power lines in that area are susceptible to tree strikes because of the high winds that often pick up during winter. Eckert said efforts to resurrect downed power lines often got prolonged in the past because the weather still was raging when crews were attempting to make repairs.

This project, scheduled to be complete by the end of the year, should alleviate that problem, he said. Normally, communities or villages this size have to pay significantly higher rates because their power is provided by diesel generators. The cost of fuel delivery and storage and generator maintenance are divided among a small number of households and buildings.

Eckert said the connection with Homer Electric's network gives the South Kachemak communities the benefit of efficiencies of scale, adding the cost of powering those homes and buildings in with the rest of the utility's members.

"A central service with tens of thousands of users is more inexpensive than hundreds," he said. "They've got the cost advantages of being served with a larger scale. For an investment of $4 million, that's substantial because there really are not a lot of people over there."

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