HEA explores potential self-regulation

• Co-op looks at opting out of RCA

By Sean Pearson
Homer Tribune
In its annual regional October meetings at communities across the Kenai Peninsula, Homer Electric Association began handing out area-wide surveys in an attempt to gauge members’ interest in the co-op moving toward self-regulation.
Currently, HEA is accountable to the Regulatory Commission of Alaska, a five-member, state agency that reviews and takes actions on rates, cooperative rules and conditions of service for Alaska utilities. However, Alaska law also allows utilities to opt out of RCA oversight by a vote of the members.
HEA Spokesman Joe Gallagher said the board is just discussing the issue, and is not even sure yet whether it will go forward with the idea.
“From HEA’s perspective, right now the board has not yet made a decision whether to even go to the membership with this proposal,” Gallagher said. “We’re trying to feel things out a bit, and if we do go forward with it, then there would be a great deal of discussion and education about it. It just seems early in the game right now.”
“Mike O’Meara, HEA Members Forum Spokesman, agreed that it seemed a bit early, adding that he was surprised to see the questionnaires show up at last Tuesday’s meeting.
“I realized then that they had come a long way from simply mentioning it, to actually moving ahead,” O’Meara said. “When HEA talks about ‘local control,’ they frame it in such a way that it makes it seem like we don’t have local control right now. We do.”
According to a handout on self-regulation information offered by HEA, local regulation would not only eliminate the $178,000 per year collected from members to pay for RCA oversight and eliminate unnecessary delays in new services or policies, it would also allow for the HEA Board of Directors to have the final responsibility for establishing rates and services.
“Currently, any change to the tariff – no matter how small, non-controversial or beneficial to members – must be reviewed and approved by the RCA,” the pamphlet stated. “This process takes a minimum of 45 days.”
O’Meara said he can understand how self-regulation would make things less complicated for HEA, but is wary of its impact on members.
“I’m sure it would simplify operations and save money,” O’Meara said. “Any time you are dealing with a regulatory committee, you are going to have to donate staff time to make sure things are done properly and regulations are followed. All of this takes time, and – in turn – money.”
O’Meara said there is no question that the Regulatory Commission is kind of an “opaque organization that can be difficult for a manager to deal with.”
“I can see where this would be an impetus to want to make a change, but there’s no question the RCA is there for a reason,” O’Meara said. “Things happen faster without the RCA involved, but external evaluations offer factual information based on studies and without bias. That’s an important piece of regulation.”
Still, Gallagher says it’s too early to start speculating about how oversight of the co-op will be maintained.
“It’s really all just a possibility right now,” he explained. “If the board says ‘yes’ and we move to put a vote before the membership, HEA will provide more extensive information, answer questions and go over pros and cons with the community before moving further forward.”
O’Meara said he agrees that members need to become better informed, and encouraged HEA to provide factual information through a public education campaign.
“I think the board needs to see that a wider membership is made aware that this is happening, and have some understanding of the potential impact self-regulation might have,” he said. “I think they got the cart before the horse when they started handing out surveys at the meetings. They wound up with a sampling of people who only showed up for the free meal.”
For more information about what local control entails, members are encouraged to call the Public Relations office at HEA. Public meetings will also be held in local communities over the next few months to get more feedback from the membership.
“Everyone should have the right to make an informed decision,” O’Meara said. “If we all somehow get talked into moving toward self-regulation, we have to figure out how we can maintain the safeguards of an outside regulator. The RCA is looking after consumers’ best interests. What replaces that?”

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