- Associated Press - Tuesday, November 1, 2016

KENAI, Alaska (AP) - As the Homer Electric Association moves forward with its election to withdraw from the oversight of the state utilities regulator, the company’s subsidiary is also planning a deregulation election.

The subsidiary, Alaska Electric and Energy Cooperative, owns HEA’s generation and transmission infrastructure and operates as a separate cooperative with HEA as its only member. The Regulatory Commission of Alaska announced AEEC’s plans to seek exemption from regulation by election on its website Friday.

HEA has mailed its first ballots in the deregulation election and will return final ballots to the regulatory commission by Nov. 27. The commission will announce the results in December, The Peninsula Clarion reported (https://bit.ly/2dWQZYz).

Alaska statute allows a publicly regulated utility cooperative to withdraw from regulatory oversight by a majority vote of its members.

Both companies are seeking the exemption while holding a combined $372 million of debt.

HEA and AEEC General Manager Brad Janorschke previously told the Peninsula Clarion that AEEC is “a financial tool to allow us to remove the upward pressure on rates” by borrowing money on more favorable terms.

Janorschke said HEA owes about 60 percent of its debt to the National Rural Utilities Cooperative Finance Corporation, a nonprofit finance corporation that lends to electrical cooperatives. The remaining debt - about $150 million - is owed by AEEC to the U.S Department of Agriculture’s Rural Utility Service. The company took on a majority of the debt between 2011 and 2014 when HEA was building or acquiring three gas-fired power plants.

Discussions about AAEC following HEA’s lead in holding a deregulation election took place Oct. 12 at a Regulatory Commission of Alaska meeting.

Assistant Attorney General Stuart Goering cited two previous cases handled by the commission at the meeting, which he said suggested “that generation to transmission cooperatives that are owned either by a single member or by a small number of utility members would have to have essentially a pass-through election where the actual consumers of those utilities would vote to deregulate as opposed to having simply the sort of formal members of the cooperatives vote.”

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Information from: (Kenai, Alaska) Peninsula Clarion, https://www.peninsulaclarion.com


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