Brad Janorschke,
General Manager
Dan Furlong,
President
HEA’s Board of Directors is elected by the people who matter most – their fellow members. Three members from each of the three districts in HEA’s electric service area are elected to serve as Board Directors. The Board is comprised of leaders who live and work in your communities and have a vested interest in working collectively to represent the best interests of their fellow Members. The board is responsible for setting, reviewing, and revising policy that allows the General Manager and the management staff to conduct the day-to-day operation of the cooperative. They hold meetings on the second Tuesday of each month (except as otherwise noted). For more about your Directors and the Board’s role, please visit Board of Directors.
Board of Directors
President Dan Furlong | District 2
Vice-President Robert Wall | District 2
Secretary Jim Duffield | District 1
Treasurer Wayne Ogle | District 1
Director Mike Chenault | District 1
Director Dan Green | District 2
Director Louie Flora | District 3
Director Jim Levine | District 3
Director Erin McKittrick | District 3
Jessica Spuhler | General Counsel
Executive Management
Brad Janorschke | General Manager
Keriann Baker | Chief Strategy Officer
Sheri Gower | Chief Administrative Officer
Sarah Lambe | Chief Financial Officer
Larry Jorgensen | Chief Power Production Officer
John Jungling | Chief Technology Officer
Rob Montgomery | Chief Operating Officer
2023 Year In Review
1411
Overhead
Miles of Line
1106
Underground Miles of Line
25644
Total
Active Members
33740
Meter
Locations
In 2023, HEA embarked on a series of transformative projects, embodying the spirit of “We ARE HEA.” Through several significant endeavors, showcasing a commitment to efficiency, safety, and reliability, HEA demonstrated a dedication to innovation and excellence, reflecting the collective strength and unity within our cooperative community. As we reflect on the accomplishments of the past year, we remain committed to providing exceptional service while upholding the core values that define us as HEA.
2023 Generation Highlights
In 2023, Homer Electric undertook several significant initiatives alongside its
routine generation plant operations, demonstrating a commitment to efficiency,
safety, and reliability:
Power Supply Study
The largest project of the year, the Power Supply Study, involved comprehensive analysis and planning. An extensive load analysis was conducted, taking into account rate classes and weather impact. Simultaneously, the daily dispatch planner was automated to optimize load dispatch with hydro-thermal strategies. Through over 200 model runs covering a decade, the team explored scenarios integrating renewable generation projects and assessed system load impacts. We are pleased with the model’s validation against actual dispatch, showing less than a 3% variance, which confirms our commitment to precise and innovative power supply optimization.
Electrical Safety Plan
Combining various safety requirements from entities such as the National Electrical Safety Code (NESC), Occupational Safety and Health Administration (OSHA), and National Fire Protection Association (NFPA), HEA developed a comprehensive Electrical Safety Plan. Addressing qualification, training, personal protective equipment (PPE), and operational practices around electrical equipment, the plan was collaboratively crafted by our Power, Fuels, & Dispatch staff and safety coordinators in conjunction with our safety contractor. Implementation is ongoing across all generation plants, including the Bradley Lake Hydroelectric Plant.
Bernice Lake Plant DCS Upgrade
Building on 11 years of reliable service, the Bernice Lake Ovation Distributed Control System (DCS) underwent hardware upgrades to ensure continued efficiency and security. Upgrades included the replacement of computer workstations, servers, network infrastructure, and the implementation of the Ovation Cyber Security Suite to meet Alaska’s Critical Infrastructure Protection regulations. Additionally, a Machinery Health Monitor vibration monitoring system was installed to detect abnormalities and prevent unplanned outages.
Electrical Safety Plan
Combining various safety requirements from entities such as the National Electrical Safety Code (NESC), Occupational Safety and Health Administration (OSHA), and National Fire Protection Association (NFPA), HEA developed a comprehensive Electrical Safety Plan. Addressing qualification, training, personal protective equipment (PPE), and operational practices around electrical equipment, the plan was collaboratively crafted by our Power, Fuels, & Dispatch staff and safety coordinators in conjunction with our safety contractor. Implementation is ongoing across all generation plants, including the Bradley Lake Hydroelectric Plant.
NCC Emergency Diesel Controls Upgrade
At the Nikiski Combined Cycle (NCC), an Easy Gen Controller was installed for the Emergency Diesel Generator (EDG), facilitating monthly test runs and providing centralized monitoring of controls during operation. Coordinated by generation staff, ongoing efforts focus on finalizing breaker controls and operational procedures for emergency usage.
2023 Engineering Highlights
The Engineering department at Homer Electric Association (HEA) plays a crucial role in distribution planning, as well as the design and installation of new electrical services for our members. In 2023, HEA’s growth was underscored by several noteworthy engineering endeavors:
428
New Electric Service Job Applications Received
Non-native Plant Survey and Control at
Stonehocker Creek
As part of ongoing efforts related to multiple projects at Stonehocker Creek aimed at protecting overhead electric lines, HEA conducted a non-native plant survey and control initiative within Kachemak Bay State Park. Monitoring and removal of non-native plant species commenced in 2020 and continued through 2023, to preserve the natural environment of the park and mitigate potential impacts on the electric infrastructure.
System Engineering Infrastructure Improvements
1
In 2023, HEA conducted updates and validation of the Distribution System Electrical Model, vital for future development planning, verifying system disturbance responses, and maintaining power quality. These enhancements ensure the reliability and stability of the electrical system, leading to fewer outages, improved service, and overall customer satisfaction.
2
Feeder Reliability: HEA improved the reliability of our power lines by installing or upgrading eight reclosers in the Nikiski area. These devices help prevent power outages, reducing both the number of affected customers during system faults and outage restoration times.
3
Real-Time Automation Controller (RTAC) Installations: Equipment at the Diamond Ridge Distribution Substation and Diamond Ridge Transmission Switching Station were upgraded improving remote monitoring and station security to comply with AK-CIP regulations.
2023 Operations Highlights
In 2023, HEA’s operations department continued its vital role in maintaining and improving the distribution system, which spans 2,517 miles of energized power lines across HEA’s 3,166 square-mile service territory. Among the significant projects and maintenance activities, the following highlights stand out, as well as our continued commitment to safety:
Right of Way Clearing
Hazard Trees
In 2023, Homer Electric encountered a notable surge in outages, with hazard trees accounting for approximately 48% of incidents. This increase was worsened by the widespread infestation of beetle kill across the north end of our system. Hazard trees, characterized by defects that could lead to contact with powerlines or other HEA facilities, often line private properties adjacent to HEA’s powerline corridors. However, access to these areas requires property owner consent, presenting a challenge for HEA operations personnel in their efforts to address this issue. Collaborating with tree-clearing contractors, notably Carlos Tree Service, HEA is actively identifying and removing hazard trees where permission is granted.
HEA, with its contractor, cleared approximately:
165
Miles of Trees and Brush from ROW
977
Beetle Kill Trees
523
Hazard Trees
48%%
of 2023 outages due to Hazard Trees/Beetle Kill
Distribution clearing
HEA adheres to a seven-year rotational schedule for clearing its rights of way (ROW) to mitigate the risk of trees falling on power lines, a leading cause of outages and fire hazards. This year, in collaboration with our contractor, the focus of the 2023 ROW schedule was on removing vegetation hazards in areas such as Bernice Lake area in Nikiski, Fritz Creek, West Homer and the Spit areas in Homer, and the Sterling Highway in Soldotna.
Implementation of the HEC Program
HEA introduced the Human External Cargo (HEC) program in 2023, in collaboration with Maritime Helicopters. This program and associated training enable the extraction of injured individuals via a longline from a helicopter, enhancing emergency response capabilities in remote or challenging terrain.
System Upgrades & Maintenance
In 2023, HEA implemented several multi-departmental projects and enhancements to strengthen the electrical system and improve service reliability for members:
Insulator Replacement
In Kasilof, HEA replaced old insulators on 56 poles, improving the reliability and safety of the electrical infrastructure in the area.
Diamond Ridge to Hatfield Autotransformer Replacement
Through collaborative efforts with both the Operations and Engineering teams, we replaced a crucial piece of equipment that helps supply power between the Diamond Ridge and Hatfield areas. This upgrade ensures reliable power sources for members connected to HEA’s Hatfield and Diamond Ridge Substations, even in the event of a system failure.
Substation Metering
At our Hatfield, Diamond Ridge, and Marathon substations, HEA installed a new metering system called Aclara TWACS, enhancing monitoring capabilities. The successful installation was achieved through close collaboration between the Operations, Engineering and Member Service departments, highlighting HEA’s commitment to teamwork and efficiency.
Renewables
Net Metering
Since its inception in 2008, HEA has been at the forefront of promoting renewable energy through its net metering program. As of December 31, 2023, the program has expanded to encompass a total generating capacity of 3,619 kW. Under the regulations of HEA’s net metering program, members are permitted to sell back excess energy to HEA. Through this arrangement, HEA has purchased 1.4 million kWh of energy from its generating members, contributing to a reduction in the demand for natural gas on the Kenai Peninsula. This effort not only aligns with HEA’s commitment to sustainability but also significantly enhances our commitment to renewable energy.
32
NEW Net Metering Installations in 2023
Wind Projects
HEA is advancing its wind energy efforts through projects supported by grants awarded from the Alaska Energy Authority (AEA) Renewable Energy Fund.
Cook Inlet Oil Platform Wind Project
HEA received a $214,400 Round 15 Grant for conducting a feasibility analysis and resource evaluation for a potential site on a Cook Inlet Oil Platform. This wind project is an innovative endeavor aimed at harnessing higher velocity winds off the platform for renewable energy generation. In collaboration with Hilcorp, the project’s first phase focuses on gathering meteorological data to assess wind speeds and evaluate the feasibility of the initiative. By repurposing existing assets and leveraging synergies with oil and gas operations, HEA aims to explore sustainable energy solutions while maximizing efficiency and resource utilization.
On-Shore Wind Projects
In addition, through the Round 14 AEA REF Grant, HEA’s wind energy projects in Happy Valley, Caribou Hills, and Nikiski have received land-use permits and funding for essential equipment such as met towers and Lidar units. These projects, extended through June 30, 2026, demonstrate HEA’s commitment to diversifying its renewable energy sources and exploring sustainable energy solutions.
Geothermal Exploration
Furthermore, in August of 2023, HEA was awarded a total grant of $113,500 from the AEA Renewable Energy Fund. HEA continues to explore geothermal energy as a viable renewable resource through projects like Mt. Spurr and Augustine Island. HEA is studying interconnection costs and assessing the feasibility of integrating potential geothermal prospects onto its system. These initiatives underscore HEA’s dedication to exploring innovative renewable energy options and reducing its carbon footprint.
Landfill Gas Project
HEA has made significant strides in its Landfill Gas project, securing a $885,000 AEA Round 14 REF Grant in 2022. Additionally, a $875,000 Federal Legislative Appropriation has bolstered the project’s funding, along with an additional $1.1 million from the 2023 Round 16 Grant application for final design work. Collaboration efforts with the Kenai Peninsula Borough (KPB) have been solidified through an executed agreement, further advancing the project’s implementation.
Technology and Automation
The Cyber Security & Communications department is essential for ensuring the security and reliability of HEA’s operations. Committed to upholding Alaska Railbelt CIP (AK-CIP) standards, the department ensures compliance with state and federal regulations to protect HEA’s infrastructure from potential threats.
In 2023, the department focused on strategic initiatives to improve the efficiency, reliability, and security of HEA’s technological systems.
OMS: Outage Management System Improvements
HEA achieved an initial milestone in a multiyear project to enhance internal SCADA systems by implementing a new Advanced Distribution Management System (ADMS). This phase included the activation of our NEW Outage Management System (OMS) developed by Hitachi. The OMS enhances the precision of our outage data, expedites member communication during outages, integrates real-time weather radar for informed decision-making, streamlines line crew dispatching, and provides estimated times of repair (ETOR) for service disruptions. This collaborative approach, involving both Operations and Member Relations, underscores HEA’s commitment to excellence in service delivery and responsiveness to member needs.
Diamond Ridge Tower & Starlink
In 2023, HEA advanced its communications infrastructure through strategic partnerships with cell phone providers and satellite carriers. This initiative aimed to reduce costs, enhance reliability, and improve crew safety while creating revenue opportunities to offset rising rates. These efforts directly benefit HEA’s membership by delivering more efficient and reliable services while contributing to rate stabilization.
Cyber Security Protection
In 2023, Homer Electric Association prioritized the security of members’ data by implementing a robust cybersecurity framework aligned with NRECA Cyber Coop Goals. Modern security systems, enhanced by state-of-the-art machine learning, were employed to proactively identify, and neutralize threats. A significant milestone was achieved with the deployment of multifactor authentication across all corporate computer systems, enhancing defense mechanisms against unauthorized access. Furthermore, targeted cybersecurity training was provided to the leadership team, ensuring strategic decisions aligned with the latest cybersecurity best practices. This comprehensive approach to cybersecurity underscored HEA’s commitment to safeguarding members’ data and maintaining trust within the cooperative community.
5200000
Attacks Defended Per Week
1500
Cyber Computer
Assets Protected
1.4
Petabytes of Data Storage
Under our Watch & Protection
0
Cyber Events
Strategic Plan
Over the 2021-2023 strategic period, Homer Electric Association (HEA) focused on diversifying generation resources, managing regulatory challenges, and enhancing member experiences. Key initiatives included achieving a renewable energy target, exploring utility-scale renewable resources, and engaging in the formation of an Electric Reliability Organization. Alongside these efforts, HEA prioritized enhancing member engagement through technology and tailored communication strategies.
As HEA looks ahead to its 2024-2026 strategic plan, designed to provide clear direction and focus as the organization continues its legacy of delivering safe and reliable energy services while embracing innovation and growth opportunities. The plan’s foundational pillars emphasize innovation, diversification, economic development, and modernization, all aimed at meeting the evolving needs of HEA’s members. The strategic priorities for the period of 2024 through 2026 include innovative energy solutions, diversification of energy resources, capturing emerging markets, and member-centric modernization, reflecting HEA’s ongoing commitment to excellence and service to its members. For more about the 2024-2026 Strategic Plan, please visit Strategic Plan.
Strategic Priorities
To fulfill our cooperative’s mission, your HEA Board of Directors has established the following strategic priorities for the three years of 2024 through 2026. We pledge to focus on:
- Innovative Energy
Solutions
- Energy Resource
Diversification
- Capturing Emerging
Market
- Member-Centric
Modernization
Member Relations Highlights
In 2023, HEA took significant steps to strengthen member relations through a range of initiatives.
Online Board of Directors Election
HEA introduced online voting capabilities for the Board of Directors election, providing members with convenient, secure, and real-time voting options. This innovative approach, including the first-ever hybrid election, garnered widespread success, fostering increased participation and transparency.
Automated Member Communications
HEA implemented automated member communications, encompassing outage and restoration notifications, tailored messages for special circumstances, and reminders for construction work orders. These endeavors underscore HEA’s steadfast commitment to enhancing member engagement, delivering efficient service, and optimizing communication channels.
HEA Outreach Programs – Building Tomorrow’s Leaders
At HEA, investing in the development of future talent is at the heart of our mission:
HEA Scholarships
In 2023, HEA proudly expanded its scholarship program, adding trade and apprenticeship scholarships alongside traditional academic awards, emphasizing our commitment to furthering educational opportunities within our community. We introduced online scholarship applications for easier access. The scholarships were renamed to commemorate the legacy of our founders, employees, and community members. HEA’s 2023 scholarships honor influential individuals such as Sandra Ghormley, the Hatfield men, and James “Hobo” Jim Varsos, celebrating their substantial contributions to our cooperative and the Kenai Peninsula.
HEA awarded twelve $1,000 scholarships to deserving high school seniors and adult learners, exemplifying our dedication to empowering future leaders.
HEA Intern Program
HEA is delighted to announce the successful completion of another summer internship program, which provided students with invaluable hands-on experience in the electric utility sector while allowing them to earn.
Interns in our IT department undertook a variety of tasks, including asset inventory, cybersecurity, infrastructure management, and communications, highlighting their skills and making meaningful contributions to HEA’s operations.
Additionally, an Engineering Intern was enlisted for the summer, assisting in the design of a remote power supply for LiDAR units utilized in measuring wind speeds at remote sites.
Safety Poster Contest
To help elevate electrical safety awareness starting at a young age, HEA hosts an annual Electrical Safety Poster Contest for 3rd and 4th grade students. Students are encouraged to create an electrical safety message that can be expressed through art as a poster.
Best Safety Message:
Madalynn Schwenk | K-Beach Elementary
Most Humorous:
Somiya Scott | Soldotna Elementary School | 3rd Grade School | 4th Grade
Most Creative:
Willa Morgan | Soldotna Elementary School l 3rd Grade
Youth Rally
We’re dedicated to fostering the next generation of leaders through programs like the HEA Youth Rally Leadership Camp. This exceptional opportunity invites two high school sophomores and juniors to immerse themselves in a week-long experience in Idaho each year. Participants develop leadership skills, foster teamwork, and strengthen communication techniques while highlighting cooperative principles, and raising awareness of important industry issues.
We’re dedicated to fostering the next generation of leaders through programs like the HEA Youth Rally Leadership Camp. This exceptional opportunity invites two high school sophomores and juniors to immerse themselves in a week-long experience in Idaho each year. Participants develop leadership skills, foster teamwork, and strengthen communication techniques while highlighting cooperative principles, and raising awareness of important industry issues.
Employee Retirements & Anniversaries in 2023
The cooperative culture begins with our valued employees. Congratulations to the following employees who have served our membership over many years in the office, in the field, and behind the scenes.
Retirements:
Diane Massengill | 15 years
Ronnie Zahacefski | 8 years
Wendell Dutcher | 21 years
Employee Service Awards:
JD Draves | 10 years
Justin Harris | 10 years
Renee Eidem | 20 years
Maureen McVeigh | 20 years
Financials
Treasurer’s 2023 Annual Report
Organized as a rural electric cooperative, Homer Electric Association, Inc. (HEA) operates as a not-for-profit entity under section 501(c)12 of the Internal Revenue Code. Established by the members to provide service at the lowest possible cost, any excess revenue (or margin) is used to fund growth and maintenance before it is eventually returned to members in the form of capital credit retirements. Ownership equity in the form of member capital credits is a fundamental tenet of the cooperative model. In 2023, the Board of Directors authorized the seventh consecutive year of general retirements, returning over $3.3 million to over 10,800 current and former members.
In 2023, the financial position of HEA remained stable with kilowatt hour sales consistent with the prior year. With diligent monitoring and expense management, we continue to meet financial obligations required by our lenders. Our number one priority is to provide safe, reliable electricity at fair and reasonable prices to you, our members.
HEA concluded the year 2023 with total consolidated operating revenues of $107.9 million. That total less consolidated costs of electric service of $107.7 million, resulted in positive operating margins of $0.2 million. Non-operating margins were offset by extraordinary expenses, holding net margins at $0.2 million. The following is a financial summary for the year.
Energy Sales
HEA sold 452 million kilowatt-hours of electricity in 2023, which is a slight 1% decrease from the year 2022 and a 6% decrease from the year 2021. Kilowatt-hours (kWh) sold decreased from the prior year for industrial and large general service classes, and sales for resale to other utilities. Sales for residential and general service classes increased.
Jim Duffield,
Treasurer
Cost of Power Adjustment (COPA)
The variable cost of fuel and other sources of power used to generate your electricity are reflected on your bill as the COPA charge. This rate is typically adjusted quarterly primarily based on the cost and source of fuel used. During the year, the COPA rate ranged between 8.0 and 8.5 cents per kWh.
Average Residential Monthly Bill
REVENUES
Revenue generated from energy sales totaled $107.0 million, an increase of 2.5% over the previous year. Other operating revenue of $0.9 million, which includes rentals and fees, plus $1.3 million from non-operating interest income and capital credit allocations from other organizations, all contribute to net margins.
Expenses
In 2023, total cost of electric service was $107.7 million, a 3.8% increase from 2022. Fuel and purchased power costs (37% of the total) increased $1.9 million, while other operating costs increased $2.0 million. Non-operating costs included a $1.3 million write-off for the potential expansion of service area, resulting in smaller net margins this year.
$0.03 ConsumerAccounts
and Service
$0.09 Administrative and General
$0.23 Distribution
$0.28 Production and Transmission
$0.36
Fuel and Purchased Power
$0.03 Consumer Accounts and Service
$0.23 Distribution
$0.09 Administrative and General
$0.28 Production and Transmission
$0.36 Fuel and Purchased Power
KEY RATIOS
The equity-to-total-assets ratio measures the percentage of total assets owned by members and is one of the indicators used to monitor the Cooperative’s financial health. HEA’s equity ratio was at 45% at year-end, compared to 46% in the prior year, both well above the 40% target. The same ratio for Alaska Electric & Energy Cooperative (AEEC), HEA’s subsidiary that holds the generation and transmission assets, was 22% in 2023. This is up from 21% in 2022 and reflects a decrease in long term debt.
Financial Goals
In conclusion, Homer Electric Association met its financial goals with positive margins and required loan agreement ratios in 2023. The financial management and resulting financial performance allow the Cooperative to continue meeting the energy needs of our members through innovative energy solutions, while ensuring fair and reasonable rates.
Keep In Touch
Phone Numbers
Toll-Free
(800) 478-8551
Homer
(907) 235-8551
Kenai
(907) 235-8551
Outage Reporting
(888) 868-8243
Telephone Assistance Hours
Monday through Friday: 8 a.m. to 5 p.m.
Addresses
Central Peninsula Service Center
Kenai Drive Through Hours
Kenai HEA Lobby