The Regulatory Commission of Alaska has approved HEA’s request for a temporary 3.25 percent rate increase. Joe Gallagher is a spokesperson for HEA.
“It will be about a $3.15 increase to the monthly electric bills. So for the average member who uses about 550 kilowatt hours, the bill will go from approximately $138 dollars to approximately $141 dollars,” said Gallagher.
The Commission issued the decision Friday. Gallagher says HEA needs the increase to recover a significant loss from transmitting power for other utilities in the Anchorage area.
“Homer Electric needs to collect about $1.8 million dollars in revenue for the year and we believe we should be getting that from the other utilities on the rail belt for their use of our transmission line to move power from the Bradley Lake Hydroelectric Plant North to Anchorage. The power currently is being wielded across our system, but we receive no compensation for that,” said Gallagher.
The regulatory commission has denied HEA’s request to collect from the other utilities. The cooperative is appealing that decision in the Alaska Supreme Court.
HEA reportedly takes a yearly loss of a Million dollars from transmitting power from the Bradley Lake Hydroelectric plant on behalf of other utilities. Gallagher says the cooperative requires another $4 million dollars to meet financial obligations. HEA’s filing for the rate increase stated that without immediate rate relief, the utility could have defaulted on mortgages for its power plants.
Gallagher says the rate increase is temporary. He says an additional proposed 1.8 percent permanent rate increase is under consideration by the Regulatory Commission. The 3.25 percent rate increase is effective February 1st.