An effort to opt out of oversight by the state Regulatory Commission of Alaska, which oversees rates and functions of utilities, especially those operating without market competition, has been voted down by Homer Electric Association's members.
At least 15 percent of HEA's 23,371 members — 3,506 members — had to vote for the election to be valid. While voter interest is often low for HEA board member elections, this election drew 7,271 replies: 4,854 — 70 percent — voting against deregulation, 2,042 voting in favor and 375 ballots removed because they failed to comply with regulations.
[Homer Electric Association will ask members to vote on deregulation]
The announcement came Dec. 20, and was quickly followed by a statement from the board's directors.
"Almost one-third of the membership voted, which highlights one of the values of the cooperative model, enabling members to provide direction to their utility," the board said in the brief statement.
Bob Shavelson, a longtime opponent of the deregulation push, said the vote was based on concerns by many about what deregulation would mean.
"HEA has not done a good job of connecting with rate-payers," Shavelson said. "They tried to slide this one through without answering basic questions about providing the other side of the story."
HEA's administration and board, which voted unanimously in support of the deregulation effort, said oversight by the state was costly and bogged the energy utility down in red tape. That translates into higher rates for members, they said.
Shavelson said HEA's administrators failed to answer questions about how much the deregulation campaign had cost the utility, and concerns linger about a deregulation effort for a subsidiary of the utility, the Alaska Electric and Energy Cooperative.
While board members have said that the effort to deregulate the subsidiary was completely contingent on the approval of HEA's deregulation, Shavelson and other HEA members have pressed the issue in court. Technically, he said, the subsidiary, which owns all the power generation infrastructure as well as the debt, has only the HEA board of directors as its membership.
A vote of five board members, therefore, could constitute a majority vote in favor of deregulation.
Shavelson said he and others will be watching the board's actions on the issue.
The HEA board's next meeting is Jan. 10.
This story was first published in The Homer Tribune and is republished here with permission.