Homer Electric design fee for new hookups doubles to $1,000 Tuesday

Homer Electric Association will charge $1,000 to design a new service hookup starting Tuesday, double the current $500. Three-phase applicants, who use higher-capacity service and are not all businesses, will also get $3,000 less from the cooperative toward their line extensions.

The Regulatory Commission of Alaska approved the changes Thursday in a letter order, its written approval to HEA. The fee covers extensions shorter than 2,000 feet, with longer extensions billed at actual cost. Every applicant pays it with the first application, and HEA's Secondary Service Credit, its contribution toward a new hookup, cannot offset it.

The $500 fee, set in 2012, came from a time study because HEA had no actual cost data, commission staff said. HEA now puts its average cost at about $1,030 across 1,230 jobs closed in 2023 through 2025. By HEA's account, inflation alone would have raised the old fee to $731. HEA's single-phase hookups averaged about $5,090 in 2011 and $7,251 in 2025 by its figures, a 42.4 percent increase.

"An additional motivation for increasing the D&E Fee is to keep the level of subsidization appropriate from the general membership in funding the SSC," Chief Executive Bradley P. Janorschke wrote in the filing letter, D&E and SSC meaning the design fee and credit. At 2025 costs, he wrote, members subsidize $6,751 of each credited hookup.

For homeowners, the credit cut nets out: the single-phase credit and the hookup charge it offsets both fall $1,000, to $5,800, which staff said "appears to have no tangible effect on single-phase applicants." Three-phase applicants pay actual cost from a firm quote, and their credit drops from $20,400 to $17,400.

Asked what three-phase applicants typically pay, J.D. Draves, HEA's regulatory affairs manager, answered Sept. 1 from 24 jobs since 2023, excluding fees and add-ons. "A three-phase service extension applicant pays $38,800 on average after receiving the SSC," Draves said, adding that "this value exhibits great variability with multiple jobs occurring where the applicant paid $0 on the low end to over $100,000 at the top of the range."

Eligibility changes too: concrete footers no longer count as a permanent foundation, and a site without one needs a building too large to move plus three of four site conditions. Construction power ends Nov. 1 of the year after applying; HEA then cancels outstanding applications and cuts it off.

The commission issued public notice July 29, with comments due Aug. 12. "No comments were received," wrote Juliet Cruz, the commission's utility tariff analyst. No party intervened, leaving only HEA's account and staff's review.

What any applicant pays after Tuesday will depend on extension length, nonstandard construction and cost sharing.