Three incumbents retained their seats as directors of Homer Electric Association following membership balloting at the utility cooperative's annual meeting Wednesday evening at Kenai Central High School.
In a tight District 1 race, Michael L. Nugent, appointed late last year to fill an empty seat, defeated Ronald Rainey, a former board member who lost his seat in May 2003 after nine years on the board. Nugent out-polled Rainey by 99 votes, 2,100 to 2,001. District 1 includes the Kenai-Nikiski area. Nugent and Rainey are residents of Kenai.
The District 2 race was not as close, but it involved an incumbent and a former board member who had faced each other before. In 2001, Deborah Debnam of Sterling defeated Patrick Cowan of Soldotna. Cowan had been appointed in December 2000 to fill a vacant seat. Wednesday, Debnam emerged on top again, garnering 2,406 votes to Cowan's 1,686. District 2 includes the Sterling-Soldotna area.
The District 3 race had just one candidate, incumbent Roseleen L. Moore, who has served on the board for seven years. Moore got 3,334 votes. District 3 covers the southern Kenai Peninsula.
Following the meeting, the board met to elect board officers. Board President Dave Carey and Vice President Hugh Chumley were each re-elected to new terms. Nugent was elected secretary-treasurer, and Debnam was selected as deputy secretary.
Issues surrounding the election included the diminishing natural gas supply in the Cook Inlet region, the future of alternative energy sources, union influence on the board and the ongoing effort to broaden cooperative services and lower costs.
Nugent said it was likely his business and engineering experience, including most recently his six years as general manager of Agrium's Kenai Nitrogen Operation, as well as seats he's held on local chambers of commerce, that helped earn him a full-term seat on the HEA board.
"I've lived in the area a long time. I know a lot of people in the area, and I like to think they supported me. I talked about issues that could face HEA in the future, and I guess people, based on my responses to the questions, must have agreed with them," Nugent said.
He and Rainey had similar views on the broader issues facing the cooperative, Nugent said, including "keeping costs low, the high cost of natural gas, and the upcoming wholesale power cost contract with Chugach Electric Association that expires in 2005."
Where Nugent and Rainey differed was over the degree to which the International Brotherhood of Electrical Workers may influence board decisions. During the campaign, Rainey said the board was "overloaded with IBEW-supported candidates."
Whether there was a union or not was up to HEA workers, Nugent had countered. Given the existence of the union, it is "up to the board and management to develop a good relationship," he said. Such a relationship does exist, in his opinion, he said.
In the District 2 campaign, Cowan had said he believed union workers were backing Debnam, but what drove him to run had more to do with a desire to influence the fate of several recommendations coming out of a line-extension policy task force on which he had served. He said during the campaign that those recommendations would "clean some things up, save some money and make some money."
For her part, Debnam said she appreciated Cowan's presence in the District 2 race.
"He is an honorable man. He will be part of HEA, I'm sure, over the next few years. He had a great interest in it and was very valuable on the line-extension task force," she said.
Moore was unable to attend Wednesday's meeting.
During the meeting, Carey addressed the successes of the past year and welcomed the utility's new general manager, Brad Janorschke.
Carey said HEA's greatest success had been in stabilizing rates.
"As of Jan. 1, 2004, HEA has the lowest residential rates in the Railbelt," he said, crediting reduced expenses, belt-tightening and a successful outcome in a dispute with its prime energy supplier, Chugach Electric, over the way wholesale power costs were assessed. HEA received a refund of interim rates and interest from Chugach amounting to more than $1.76 million.
During 2003, HEA implemented a geographical information system (GIS), wired 12 new subdivisions, replaced miles of aging underground cable and launched a project to replace stand-by generators serving communities on the south side of Kachemak Bay, among other projects, Carey said.
The bottom line looked pretty good, according to the annual financial report. HEA netted nearly $1.47 million over and above total costs, according to financial data delivered at the meeting.
Carey said the HEA board is expected to seek member support for raising the utility's cap on borrowing, currently set at $150 million. That move will require a vote of the membership, Carey said.
Debnam, who served as secretary-treasurer during the past year, said the move was necessary to allow HEA to move rapidly if something happened requiring borrowing in excess of the current cap.
"The primary reason is that the cap isn't adequate. We're talking 1977 versus now," she said.
Carey said HEA would launch an effort to inform the public of the need to raise the cap.
Janorschke, who took over as general manager last month, said he is happy to be in Alaska and settling into his new job.
He noted, in particular, the growth potential for HEA linked to development on the west side of Cook Inlet, including a proposed major mining operation north of Lake Iliamna.
"We are following it closely because one of our areas of interest is how are they going to get energy to the mine," he said in an interview following the meeting. "Certainly Homer Electric is one potential option as partners."
Likewise, the potential for residential growth on the peninsula alone would "have a great impact on us."
HEA, he added, is expecting to have more correspondence with mine developers (Northern Dynasty Minerals Ltd.) over the next few weeks.
About 100 people attended the meeting.
