Recently you were sent a mail-in ballot by Homer Electric Association (HEA), your non-profit cooperative membership organization. The ballot was submitted to you, the member-owner, for a vote on being rate regulated by both the RCA (Regulatory Commission of Alaska) and the board of HEA or just the HEA Board. The RCA is a Governor appointed five-member board that regulates all forms and types of utilities. The HEA Board is elected by you the member-owner in each of our local communities (Director Districts) during the cooperative’s annual meeting. Your board’s role is to set policy for maintaining the HEA electric infrastructure at a reasonable service level.
Before I give you all the reasons that you need to vote yes, let me share with you my background. In 1969 I started my public power career with HEA as Manager of Member Services. I was promoted to District Manager in Ridgeway (Soldotna) with the continuing role and responsibility of regulatory affairs. The regulatory process was quite time consuming, bureaucratic and costly in the early 1970s. In 1976 I left Homer Electric and Alaska to start my 25-year career as a CEO/General Manager of public power utilities in the Pacific Northwest.
On becoming a Pacific Northwest public power general manager I quickly learned how well the cooperative nonprofit utilities were able to perform financially without regulatory oversight. The municipal and cooperative utility boards focused on customer service and system reliability. The private investor owned utilities (IOU’s) had their focus on their profits from a higher rate of return on rate base for their stockholders. I quickly realized the regulatory commissions had a role to play, in limiting the utility rates of IOU’s to a responsible level and not public power oversight. In many of my rate analysis the IOU’s returns on their rate base (profit) was twice as high as my public utility. In most of the Northwest states with elected public power board members there is no or very limited regulatory oversight.
In September 2012 I returned to the Kenai to enjoy the outdoors and my grandchildren. I was surprised to learn the same RCA bureaucratic regulatory processes are in place and costing the HEA membership a higher electric rate. All of the HEA membership needs to vote “yes” on their ballot and allow for just local oversight and not political oversight!