Voices of the Peninsula: Speak up now on HEA rate proposal

Posted: Thursday, December 02, 2010

How much will my electric bill go up? That's what most people are wondering as the Regulatory Commission of Alaska considers approval of Homer Electric Association's new rate plan. Using numbers from the RCA notice in the newspapers, some HEA members calculated potential rate increases of 17 to 20 percent.

But hold on.

According to HEA, the proposed Cost Of Power Adjustment was incorrectly stated as 6.316 cents when it should have been 2.862 cents. HEA says the new plan will only increase the residential cost for a 500 kWh month by 2.38 percent. For comparison, I ran cost estimates of other consumption scenarios using the corrected numbers: 150 kWh (10.1 percent); 394 kWh (3.5 percent); 1199 kWh (2.49 percent); 2000 kWh (4.1 percent).

Look better?

But this is only one issue worth considering. According to HEA Directors the proposed rate plan reflects an effort at compromise between sometimes conflicting needs. Consequently it will not affect all of us equally. It will determine important management policy for years as well, not just the size of our electric bills.

I'm hearing from HEA members with these and other concerns:

"Doesn't the plan penalize people trying to conserve energy? People using the fewest kWh will see the highest increase in their electric bills."

"The new plan doesn't encourage energy efficiency and conservation enough. More could be done to eliminate incentives for HEA to sell more and more energy (decoupling) or provide incentives for ratepayers to reduce energy use (demand side management)."

"Presently the WPCRA is less than one cent (.00715) per kWh. At 2.862 cents per kWh the COPA would be much higher. What extra things does it include?"

"Most of this stuff is so complicated it boggles the mind. I am pretty certain that most HEA members do not understand."

"Maybe this is the best HEA can do. I hope so."

"Isn't the cost of providing service substantially higher south of Kachemak Bay? Under the proposed uniform residential rates HEA members on the south side will be heavily subsidized by those on the north side."

"Would it be possible to get someone to put together a model of conservation vs new generation... that is, is there a way to model and present the tradeoffs?"

"Need for new turbines in Soldotna seems questionable -- especially with Susitna hydro getting support from the Parnell administration. Seems like the new rate plan may force HEA members to pay for a couple of white elephants?"

You might want to take another look at HEA's proposed rate plan to see what you think. We have until 4:30 p.m. on Dec. 9 to express our views by mail or via the internet. Find information on the rate plan and how to comment at the RCA website at: http://rca.alaska.gov/RCAWeb/Dockets/DocketDetails.aspx?id=009297b3-b350-4a33-904c-4a1832c24d2a

Mike O'Meara is spokesman for the HEA Members Forum.

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