With New Year, HEA Goes Independent

     Since the early 1960s, Homer Electric Association has provided electric power to the Kenai Peninsula, mostly with power purchased from Chugach Electric Association in Anchorage. But on Wednesday, January 1st, that all changed.

     Considering that Homer Electric Association has been preparing for years for the moment when it cuts the cord with Chugach Electric and begins supplying all of its own electric power, you might think there would be a lot of pomp and circumstance come January 1st. Maybe the flipping of an oversized ceremonial lever? Maybe some confetti?

     HEA Spokesperson Joe Gallagher says that will not be the case but, still, he’s excited. He says a lot of work has gone into the transition, which HEA has dubbed its “Independent Light” program.

     The anchor of “Independent Light” is a new combined cycle turbine facility in Nikiski, which came online this fall. 

     "Basically, we have added a steam turbine that's attached to the natural gas turbine that was already there," says Gallagher. "And that will, for the most part, be able to meet Homer Electric's needs."

     Backup power will be provided by the 70-megawatt Bernice Lake power plant, also located in Nikiski, which HEA purchased from Chugach Electric this year, and a new 48-megawatt gas-powered turbine in Soldotna. That plant is currently under construction, scheduled for completion next spring.

     Of course, “Independent Light” comes with a significant price tag and HEA members are likely wondering what that might mean for their electric bills. Gallagher says because the project was financed with a 30-year, low-interest loan, the effects on members should be minimal.

     That’s the good news. The bad news is that HEA members are going to see a pretty significant rate increase in their bills beginning January 1st. The rate hike stems from a quarterly change in HEA’s Cost of Power Adjustment, or COPA. It equates to more than a $10-per-month increase for an average HEA member using 630 kilowatt hours a month. It will be one of the largest rate increases HEA members have seen in a long time.

     "And that reflects the cost of fuel, which is ratcheting upwards," says Gallagher.

     Gallagher says that HEA’s move to independent power creation does not change that fact that it – like most other electric utilities in Alaska – is reliant on natural gas to power its plants.

     That situation could change, though, and Gallagher says the HEA board of directors is looking toward a future where more and more power comes from alternative energy sources like hydro and tidal. The co-op already operates the Bradley Lake hydropower at the head of Kachemak Bay and is studying the possibility of building a smaller, five-megawatt hydropower plant at Grant Lake near Moose Pass.

     HEA is also working with Ocean Renewable Power Company to build a small tidal power pilot project in the East Forelands area near Nikiski. Gallagher says that depending on funding, that project could be in the water in the next year or two.

     But for the coming year, 2014, HEA is focused on its new “Independent Light” system. Gallagher says that while HEA members weren’t likely to notice when the switch happened, inside the organization, January 1st was a very big deal.