Homer Electric Association plans to start paying out credits to approximately 10,000 members who bought electricity from the utility cooperative between 1986 and 1987.
As a member-owned cooperative, HEA’s earnings in excess of expenses — known as a margin, which for a non-member owned enterprise would become profit — are paid back to members according to the amount of electricity they consume. Though HEA allocates its margin among its members every year, the resulting credits are only paid back when its elected nine-member board of directors decides to do so, based on the cooperative’s financial condition. The last time HEA did so was in 2012.
HEA plans to distribute credits April 17 to the members who are owed them. The average amount per member will be $75, according to an HEA press release, and the total will be $1.5 million. When it’s distributed, HEA will have paid out all the capital credits allocated in 1986 and 32 percent of those allocated in 1987, HEA Director of Member Relations Bruce Shelley said, adding that the credits allocated earliest are the earliest paid.
HEA, which began in 1945 as a buying cooperative to purchase power for the peninsula from the neighboring Chugach Electric Association, began to pay its members capital credits in 1981, said member services supervisor Susan Oliver. Payments have been made at the board’s discretion since then.
“It was pretty regular in 1981 through 1985,” Oliver said. “A gap year in ‘86, then ‘87 all the way through 2003.”
Since then, Oliver said, payments were made in 2005, 2007, and 2009.
Most recently HEA has not made capital credit payouts because its finances were tied up in the expensive Independent Light project, in which HEA bought or built three gas-fired generating plants, enabling it to end its purchasing agreement with Chugach and create its own power. The project lasted from 2011 to 2014 and was estimated in 2013 to cost $180 million, with much of its funding borrowed from the U.S Department of Agriculture’s Rural Utility Service.
With Independent Light successfully concluded, Shelley said recent financial conditions have generally been favorable, with no storms knocking down powerlines and the price of natural gas fuel remaining steady.
HEA presently buys the gas that generates 90 percent of its power through a two-year contract with Cook Inlet gas producer Furie Energy, paying around $6.75 per thousand cubic foot of gas.
Reach Ben Boettger at ben.boettger@peninsulaclarion.com.
