Diminishing supplies of natural gas, the future of alternative energy sources, union influence on board decisions and the bottom line of the budget are issues being discussed by five candidates for three open seats on the Homer Electric Association board of directors.
Mail-in ballots were sent out recently to approximately 19,000 HEA members. Ballots must be returned to the Homer HEA office no later than 5 p.m. May 4.
Running in HEA District 1, which encompasses the Kenai-Nikiski area, are incumbent Michael Nugent of Kenai, appointed last fall to fill a vacant seat, and Ronald Rainey of Kenai, a former board member and board president defeated last spring by board member Bruce Passe.
In District 2, which includes the Sterling-Soldotna area, former board member Patrick Cowan of Soldotna, president and chief executive officer of Birch Ridge Golf Course, is challenging incumbent Deborah Debnam of Soldotna, who defeated Cowan in the 2001 election.
Roseleen Moore of Homer is running unopposed in the District 3 race. District 3 includes the southern Kenai Peninsula.
Last year's election in May saw longtime members Robert Turkington and Rainey voted off the board. Turkington had served for 37 years, while Rainey had been a board member for nine years. Differences expressed over issues during that campaign might have heralded battles over HEA's corporate focus in the coming months. However, only three times during the next 17 meetings did any member vote "no" on a board motion. Besides other questions, candidates also were asked to discuss why they thought such apparent unanimity exists.
District 1
MICHAEL NUGENT
Incumbent Michael Nugent was appointed to his HEA seat last fall. Nugent has been a member of HEA for 17 years. He is a mechanical engineer who recently retired from his job as general manager of Agrium's Kenai Nitrogen Operation. According to his candidate resume, he has board experience including three years on the Unocal Employees Federal Credit Union and three years on the Alaska State Chamber of Commerce. He has served on the Kenai Chamber of Commerce and the North Peninsula Chamber of Commerce boards. He was appointed to the Homer Electric Association board in October 2003.
Recently retired, Nugent said he wants to remain active in the community. The HEA board provides that opportunity.
"It is exciting to get into discussions about alternative energy sources and about how HEA is going to generate electricity in the future," he said.
Nugent has a different take on the question of union influence than his opponent Rainey does.
"My view is that whether there is a union or not is the choice of the employees. Then it's up to the board and management to develop a good relationship," he said, adding that in his view, such a good relationship currently exists. "In that regard, there haven't been any contentious issues come up."
As to the apparent unity on the board, Nugent said he speaks only from the perspective of his seven months on the board.
"Based on my experience, there is unanimity because the board members work well together. Usually, in front of any votes, we've spent several hours in committee and board meetings before an issue comes to a vote. A lot of work goes into decisions."
Alternative sources of energy will be an important factor in HEA's future, Nugent said.
"The bulk of our power, with the exception of what comes from Bradley Lake (Hydroelectric Dam) comes from burning natural gas. Within several years, we will have to start thinking about our contract with Chugach. We are discussing that now."
Options could include negotiating a new wholesale power contract with Chugach, but options also include pursuing alternative energy sources for at least some of the cooperative's energy needs. A committee of the board is studying such sources as wind and tidal power and fuel cell technology.
"I would bet we'll be looking at that in five or 10 years," he said. "Right now, there is a surplus of generating capacity. Demand is not pushing supply right now."
Much will depend on finding more natural gas for Southcentral Alaska. If more gas is found but is high-priced, that could push the move to alternative energy sources for at least some of the electrical generation capacity of the future, he said.
RONALD RAINEY
Rainey has been a member of Homer Electric Association for 18 years. During his nine years on the board, he served as its operation chair, vice president and president. He worked for HEA management for six years and spent 25 years working for gas and electric utilities Outside. Rainey was explicit about why he wants back on the board.
"The board is overloaded with IBEW-supported candidates," he said about what he sees as the influence of the International Brotherhood of Electrical Workers local. "It's out of balance."
He also said the board "lacks the expertise in solving problems that lie ahead of us, the main one being power supply and the dwindling natural gas supply on peninsula."
HEA hasn't had an employee reduction in two decades, which "smells of old railroad featherbedding" and "union protectionism," Rainey said.
Rainey said in his experience board unanimity is generally the rule. Part of the reason is that many issues are hashed out behind closed doors in executive session.
"That's one of the problems I have with the board," he said. "The biggest problem with co-ops in Alaska are the boards of directors. They are protecting their own turf; for what reason, I don't know. They often are controlled by labor unions, which is a problem with Homer Electric right now."
Rainey said he supports searching for new energy sources and would pursue partnerships for greater electrical generation. He would continue investigation of fuel cells and how they might be applied in small commercial and industrial situations. HEA and other utilities in Alaska should explore use of plentiful low-sulfur coal deposits, he said. Building a coal-fired plant might take a decade.
"That's why energy planning is so important," he said. "If we go to sleep at the wheel and do not pursue contracts or partnerships with other utilities in the Railbelt we will miss out." He said such partnerships are not being pursued aggressively enough.
District 2
PATRICK COWAN
Cowan hopes to wrest a board seat from incumbent Deb Debnam, who beat him in the election three years ago. Cowan had been appointed in December 2000 to fill the seat vacated by Ken Lancaster who had been elected to the Alaska Legislature.
Cowan said he learned a lot in the time he spent on the board, a period that included a stint on a task force comprised of seven members of the public and two HEA board members looking at the association's line-extension policy. He said he is running now to try to influence the fate of several recommendations to come out of that task force, things he said would "clean some things up, save some money, and make some money."
One, he said, has to do with ditch digging. According to Cowan, if you want a line extension, HEA personnel must dig and backfill the ditch into which the line is placed.
"Frankly, that's not necessary," he said. "Any good qualified dirt mover could do that."
He also said HEA low-interest loan programs may not be recovering administrative costs.
In his candidate resume, Cowan said it is imperative the HEA board "utilize innovative management techniques" Employing outside companies to do ditch work could free up HEA employees for other duties, he said.
As for the apparent unanimity on the board, Cowan believes there are "way too many executive sessions" where many issues are decided before they come up for a public vote.
"I felt that way when I was on (the board)," he said.
Cowan said he thinks HEA "has a great crew," and that he has no beef with the union, which apparently backs his opponent, Debnam. Cowan said he would never do anything against the union.
On future energy sources, Cowan said HEA "definitely needs to be researching alternative power." He pointed to massive deposits of low sulfur coal that could prove cheaper than natural gas. However, it might take a decade to build a generating plant.
"This is something we should be looking toward, and other alternative sources, like wind, currents and tides," he said.
Cowan questions areawide voting for HEA board seats and would prefer board members be elected by district strictly by residents within those districts similar to the way Kenai Peninsula Borough Assembly and school board candidates are chosen. That way, he said, residents would stand a better chance of knowing about their candidates.
DEBORAH DEBNAM
Debnam has been a member of Homer Electric Association for 10 years and has served on the board the last three. She currently is the board's secretary-treasurer and chair of the finance committee. She owns Alaska Wedding Brokers in Sterling. She worked for more than 15 years in management for Chugach Electric.
Debnam said she's running for another term for many of the reasons she ran the first time.
"I've been in the utility business a lot of years and now I'm semi-retired. I have a passion for the industry. I want to put something back into it."
She left Chugach, she said, during a period when there were moves toward deregulation and competition. She said she worried that some utilities could lure large industrial users away from others, a circumstance that could raise the rates paid by residential consumers. She warned that the loss of two or three large HEA customers could under cut the rate-base support provided by those industrial customers.
"Being a residential customer, I was interested in making sure those things don't happen down here," she said. "Through building relationships with other co-ops, we can live together without those awful things happening."
With three years under her belt, Debnam sees the board as "incredibly cohesive." Respect for each other's opinions and knowledge has made the group flexible enough to work toward and reach consensus. That's why there appears to be such unanimity in the board's voting record.
"It's incredible what this board has accomplished," she said, pointing to a rate reduction in January that she said would not have happened without a lot of work creating a budget that would make it happen.
Debnam said she does not believe the IBEW exercises any unusual control over the board.
"I think it's been a very good working environment for them," she said. She noted the employees' good safety record and said lost-time figures are lower now than in the past. "Things are working pretty good," she said.
Debnam said HEA is actively exploring alternative energy sources.
"Residential fuel cells interest me personally," she said. "We just have to find a way to extract hydrogen from more resources to lower costs."
She also said there probably is a coal plant in HEA's future.
"There's lots of coal in Alaska," she said.
She noted that Chugach's gas supply in Beluga is running out. At a recent joint board meeting with HEA, she said Chugach gave a presentation on Agrium's cogeneration plant where the fertilizer manufacturer creates electricity for its own purposes. Chugach, she said, is interested in such projects.
District 3
ROSALEEN MOORE
Moore, a resident of Homer, is running unopposed for another term. She has been a member of Homer Electric Association for more than 30 years and a member of the board for seven. Other boards on which she has served include the Alaska Commercial Fishing and Agricultural Bank, United Fishermen of Alaska and North Pacific Fisheries Association. She has been the co-owner of Northern Enterprises Boat Yard Inc. in Homer for 23 years, and a commercial fisher for 34 years.
Moore notes there has been no rate increase in seven years on the Kenai Peninsula. Those competitive rates may help attract business to the peninsula, she said in her candidate resume.
She is seeking another term because she thinks the board would benefit by retaining some institutional memory.
"I think we have had so much change in HEA with new board members that we need some stability and not have an entirely new board. There's a need to keep consistency and history."
Moore said she believes the relationship between the board, management and the IBEW employees is a good one. She acknowledged that she could "feel some" union influence on the board, but nothing she considered adverse.
"There is a strong union presence in a few people," she said. "But those people have adequately made good decisions."
Noting that another candidate, Ron Rainey, had commented upon the lack of workforce reduction at HEA in an economy where such measures are fairly common, Moore said she viewed things from a different perspective.
"There hasn't been a layoff, but employee numbers have not drastically increased," she said. "There's only been two or three added over five or six years. We've added services. Attrition (retirements and the like) has probably taken care of any increases we might have had. We've had a decrease by not adding more people. We are about as lean and mean as we can get."
Like the other candidates, Moore sees alternative energy sources in HEA's future. The cooperative is studying wind, tidal and fuel cell resources. As for wind energy, Moore said a study she's seen appears to show only one place on the peninsula where wind generation might have the potential for economic return ‹ the Port Graham and English Bay region.
"It takes a certain volume per day to make it feasible," she said.
Exploiting Cook Inlet's immense tidal forces would be beyond HEA's financial resources alone. To do that would require the cooperative efforts of many utilities and municipalities and likely a good deal of grant money poured in, she said. Fuel cell technology may show more promise and HEA is working to keep abreast of developments in that area, she said.
"We won't be left behind if it gets to be a commercially viable product," she said. "We've had a lot of discussion of fuel cells."
For the near term, the Cook Inlet region needs a new source of natural gas, she said. Without it, Anchorage and the Kenai Peninsula won't be able to grow, she said.
"I would hate to be the last one to turn the lights out," she said.
