HEA rates drop: With RCA approval, bills to decrease 11.5 percent

Posted: Thursday, December 17, 2009

Although approval from the Regulatory Commission of Alaska still is needed, Homer Electric Association residential members likely will see a "significant decrease" when they open their January bills.

An 11.5 percent decrease, to be exact.

Compare it to a year ago, and it's a 36 percent decrease, according to Joe Gallagher, HEA spokesperson.

The average monthly kilowatt usage of HEA residential members is 630 kilowatt hours. In January 2009, that equaled a monthly bill of $146.45, with 21.5 cents the per-kilowatt rate and a customer charge of $11.

The new rates will mean a monthly bill for 630 kilowatter hours will drop to $97.43, with 13.7 cents the new per-kilowatt rate and an $11 customer charge, according to data provided by Gallagher.

"We fully expect that it will be approved by the RCA because it is related to the WPCRA (the wholesale power cost rate adjustment)," Gallagher said.

The WPCRA is the cost of power due to fluctuations in the price of crude oil, heating oil and natural gas. It is adjusted quarterly as the cost of power purchased by HEA from Chugach Electric Association changes. HEA is under contract to purchase power from Chugach Electric through 2012; more than 90 percent of the power sold to HEA by Chugach Electric is generated by natural gas.

The filing to the RCA shows the WPCRA would change from 1.966 cents per kilowatt hour to 0.181 cents per kilowatt hour.

Should the price of natural gas change during the first three months of 2010, a rate change would not take effect until the following quarter.

"It could go up or down or it could stay the same, but for the first quarter of 2010, there won't be a change," Gallagher said of any change mid-quarter. "Come April, it will be adjusted once again."

Brad Janorschke, HEA general manager, pointed out that although the WPCRA is not controlled by HEA, the decrease is good news.

"The WPCRA is a pass-through cost that HEA basically has no control over," Janorschke said in a press release issued by HEA Friday. "As we unfortunately saw last January, the WPCRA can increase dramatically and cause hardships for rate payers. This coming quarter, we are fortunate that the WPCRA is headed in the opposite direction and will result in savings for our members during the winter months."

If approved by the RCA, the new rate will go into effect for all billings as of Jan. 1, 2010.

McKibben Jackinsky can be reached a mckibben.jackinsky@homernews.com.

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