Homer Electric Association members voted overwhelmingly against deregulation and the cooperative will remain under the oversight of the Regulatory Commission of Alaska. About 70 percent of voters said they wanted the RCA, the agency which oversees public utilities in Alaska to continue the practice. HEA officials made the announcement Tuesday.
HEA rate-payer and outspoken critic of deregulation Mike O’Meara, says members sent a clear message to HEA’s management through the vote.
“They don’t trust the management to conduct business in the appropriate way without oversight from the RCA and unregulated monopolies are just generally a bad idea for the consumer,” said O'Meara.
The cooperative is the sole provider of electricity to nearly 23,000 members on the Kenai Peninsula. Almost one third of the membership voted.
HEA’s nine-member Board of Directors voted unanimously in April [12], to hold the deregulation election. This October, members received ballots with their electric bills.
O’Meara says HEA’s management and board need to do more outreach to members. He suggests informal listening sessions. O’Meara says the vote shows HEA’s management and board are not on the same page as the people they serve.
“The vote is a very good example of that. This is evidence that they were totally out of touch with what the wider membership felt,” said O'Meara.
Bruce Shelley, Director of Member Relations for HEA, says the relatively large voter turnout, highlights one of the values of the cooperative model, enabling members to provide direction to their utility.
“HEA is very, very pleased by the voter turnout. It is such an important decision. We are a cooperative and we live by a cooperative model and this definitely showed, unlike a monopoly the cooperative model enables members to provide direction to their utility,” said Shelley.
Shelley says the cooperative will not pursue deregulation of HEA's generation and transmission subsidiary – Alaska Electric Energy Cooperative or AEEC—which holds the lion's share of HEA debt that ratepayers must pay off.
Under the rules, HEA would have had to hold a separate deregulation election for their subsidiary.
HEA officials couldn’t tell KBBI exactly how much that holding the deregulation vote and the campaign for it cost, but Shelley estimates it cost approximately $98,000 with promotional materials, ballots, and mailing.
RCA officials say it cost the commission $11,000 to have the ballots counted. Under Alaska statute, the cooperative won’t be able to hold another deregulation election for two years.
Editor's note: An earlier version of this story included an estimated cost for the HEA deregulation vote that was far less than the actual cost. HEA officials later adjusted their estimate to approximately $98,000.
