Why did we choose the Fuel & Purchased Power Charge?
Many members have asked why we are trying to roll Eva Creek Wind into the Fuel and Purchased Power Charge rather than including it with the Simplified Rate Filing. GVEA proposed this method of recouping costs in a recent tariff filing to the Regulatory Commission of Alaska. We expect a decision by mid-November.
There are many reasons why management thought it best to include Eva Creek Wind in the Fuel & Purchased Power Charge. Keeping in mind that GVEA follows a cost-causer, cost-payer rate structure, here are two of the big ones:
- The benefits (decreased fossil fuel usage) and costs of the Eva Creek Wind project will be spread equally across all rate classes if rolled in with the Fuel & Purchased Power Charge. Why? All members, regardless of their rate class, will receive the same proportionate share of benefits and costs based on their kilowatt-hour usage.
- The Fuel & Purchased Power Charge is more timely. The Simplified Rate Filing is filed every six months while the Fuel & Purchased Power Charge is filed quarterly. Due to the timing of when rate adjustments become effective under the Simplified Rate Filing process, a significant time lag would occur in the cost collection for the Eva Creek Wind project.
Will the addition of wind increase the Fuel & Purchased Power Charge tariff filing effective December 1? No. Eva Creek Wind will not impact members’ rates. However, the amount of natural-gas fired power we purchase from Anchorage as well as our other fuel costs like coal, hydro and oil also factor into the calculation of the new rate. Since we anticipate that the co-op will be receiving more natural gas-fired power (lower cost than oil-fired power) from the Intertie in the coming months, we expect a slight reduction in the next Fuel & Purchased Power Charge.
At this point, we don’t know if Eva Creek Wind will be factored into the December 1 Fuel & Purchased Power Charge filing. However, should the RCA approve our proposal to do so, we anticipate a slight net decrease to members’ rates.