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Home My WebLink AboutRES2026-064 PH Heat Pump Rate Tariff FAILEDFAILED Sponsored by: Sorensen Public Hearing: July 27, 2026 Postponed: July 27, 2026 Public Hearing: August 10, 2026 CITY OF SEWARD, ALASKA RESOLUTION 2026-064 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, APPROVING AN AMENDMENT TO THE 2025 ELECTRIC UTILITY TARIFF ESTABLISHING A HEAT PUMP RATE WHEREAS, modern cold -climate heat pump technology provides an energy -efficient method of residential space heating, reduces fossil fuel consumption, and makes greater use of the City's existing electric infrastructure; and WHEREAS, the Port and Commerce Advisory Board has advocated for the development of a dedicated heat pump electric rate to support adopting this technology; and WHEREAS, Electric Department staff have conducted extensive research on electric rate structures, utility practices, engineering considerations, billing methodologies, and utility cost recovery approaches to develop a heat pump rate that balances customer affordability, operational practicality, and responsible utility management; and WHEREAS, to take advantage of the heat pump rate, customers must install a dedicated subtract meter that measures only the electrical consumption of qualifying heat pump equipment, to ensure accurate and fair billing; and WHEREAS, this resolution will establish the first dedicated residential heat pump rate among Alaska Railbelt electric utilities, as part of the Heat Pump Pilot Program, demonstrating the City of Seward's commitment to responsible utility innovation and regional leadership. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA: Section 1. The City Council hereby authorizes the City Manager to amend the 2025 Electric Utility tariff in effect to include a dedicated heat pump rate. Section 2. This resolution shall take effect immediately upon adoption. APPROVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA THIS 27th DAY OF JULY 2026. FAILED Sue McClure, Mayor CITY OF SEWARD, ALASKA RESOLUTION 2026-064 Page 2 of 2 AYES: None NOES: Draper, Crites, Barnwell, Warner, Calhoon, Osenga, McClure ABSENT: None ABSTAIN: None ATTEST: Kris Peck City Clerk City Council Agenda Statement Meeting Date: July 27, 2026 To: City Council Through: Kat Sorensen, City Manager From: Taylor Crocker, Electric Operations Manager Subject: Resolution 2026-064: Approving an Amendment to the 2025 Electric Utility Tariff Establishing a Heat Pump Rate Background and justification: For several years, the Seward Port and Commerce Advisory Board has advocated for the development of a dedicated heat pump electric rate to encourage and support residential heat pump installations within the City of Seward. In response to those efforts, Electric Department staff conducted more than a year of research evaluating electric rate structures, utility cost recovery methodologies, engineering considerations, metering configurations, billing practices, and utility programs both within and outside Alaska. The Heat Pump Pilot Program, and the proposed heat pump rate, represents the culmination of that work. Modern cold -climate heat pumps have become one of the most energy -efficient technologies available for residential space heating. As more Seward residents consider replacing or supplementing fossil fuel heating systems with electric heat pumps, the City recognizes the value in creating a dedicated heat pump rate. Unlike a traditional discounted electric rate, the proposed heat pump rate has been designed around a dedicated subtract metering system that accurately measures only the electricity consumed by qualifying heat pump equipment. Under this configuration, all electricity entering the residence continues to flow through the customer's primary utility meter, while only the electricity serving the approved heat pump system is measured through a second utility -owned subtract meter. The customer's monthly utility bill will continue to bill all other household electrical usage under the applicable residential rate schedule, while the electricity consumed by the qualifying heat pump system will be billed separately using the heat pump rate schedule. The requirement for a dedicated subtract meter is fundamental to the success of the Heat Pump Pilot Program. By measuring only the electricity consumed by qualifying heat pumps, the City can accurately evaluate actual heat pump performance without including unrelated household electrical loads. This approach provides reliable operational data while ensuring future decisions regarding electric rate design are based upon measured system performance rather than estimates or assumptions. It also maintains equitable billing practices for all customers by ensuring that only qualifying heat pump consumption receives service under the heat pump rate schedule. City Council Agenda Statement The Heat Pump Pilot Program will collect operational information on customer participation, seasonal energy consumption, and the overall impacts of residential heat pumps on the City's electric system. While significant research exists regarding heat pump technology, relatively little long-term operational data exists for municipal electric utilities in Alaska. The proposed pilot program will provide valuable information that can be used to support future electric utility planning, based on actual operating experience rather than theoretical projections. The data collected can also benefit communities beyond Seward through collaboration with the Alaska Center for Energy and Power and other interested organizations by sharing operational information to assist other Alaska utilities and municipalities as they evaluate similar programs. As the first dedicated residential heat pump rate among Alaska Railbelt electric utilities, the City can contribute operational data to help shape future utility planning throughout Alaska. Fiscal Impact: Funding Source: X Fiscal Impact Yes — Amount: $XXXXX Budgeted: No General Fund: Enterprise Fund: Grant: Other: Finance Director Signature: X Yes No N/A Comprehensive and Strategic Plan Consistency Information This legislation is consistent with (citation listed): Comprehensive Plan: Strategic Plan: Other: 3.7.1.4 X Yes Attorney Signature: Not applicable Comments: Administration Recommendation X Approve Other: