Homer Electric Association members voted overwhelmingly against deregulation, and the cooperative will remain under the oversight of the Regulatory Commission of Alaska. About 70 percent of voters said they wanted the RCA, the agency which oversees public utilities in Alaska, to continue the practice. HEA officials made the announcement Dec. 21.
Mike O’Meara, an HEA rate-payer and outspoken critic of deregulation, said members sent a clear message to HEA’s management through the vote.
“They don’t trust the management to conduct business in the appropriate way without oversight from the RCA, and unregulated monopolies are just generally a bad idea for the consumer,” O’Meara said.
The cooperative is the sole provider of electricity to nearly 23,000 members on the Kenai Peninsula. Almost one third of the membership voted.
HEA’s nine-member Board of Directors voted unanimously in April to hold the deregulation election. This October, members received ballots with their electric bills.
O’Meara said HEA’s management and board need to do more outreach to members, and he suggested informal listening sessions. He said the vote shows that HEA’s management and board are not on the same page as the people they serve.
“The vote is a very good example of that. This is evidence that they were totally out of touch with what the wider membership felt,” O’Meara said.
Bruce Shelley, Director of Member Relations for HEA, said the relatively large voter turnout highlights one of the values of the cooperative model — enabling members to provide direction to their utility.
“HEA is very, very pleased by the voter turnout,” Shelley said. “It is such an important decision. We are a cooperative and we live by a cooperative model, and this definitely showed, unlike a monopoly, the cooperative model enables members to provide direction to their utility.”
Shelley said the cooperative will not pursue deregulation of HEA’s generation and transmission subsidiary – Alaska Electric Energy Cooperative or AEEC — which holds the lion’s share of HEA debt that ratepayers must pay off.
Under the rules, HEA would have had to hold a separate deregulation election for its subsidiary.
HEA officials couldn’t say exactly how much holding the deregulation vote and the campaign for it cost, but Shelley estimated it cost approximately $98,000 with promotional materials, ballots and mailing.
RCA officials say it cost the commission $11,000 to have the ballots counted. Under Alaska statute, the cooperative won’t be able to hold another deregulation election for two years.