GVEA’s 2016 Electric Rate Study Filing

Every few years Golden Valley Electric Association commissions a study to determine how much it costs to provide electric service to its members. GVEA’s 2016 Electric Rate Study will be filed with the Regulatory Commission of Alaska (RCA) by the end of the year.

The recent study undertaken found that GVEA’s revenue needs have decreased by about 1.3 percent. In other words, GVEA needs to collect about $3 million less from its members annually. The study also found that we have been under-collecting from our residential and small commercial members, while we’ve been over-collecting from our large commercial and industrial members. GVEA operates under a cost-causer, cost-payer model, therefore, adjustments are needed.

The study recommends a modified rate structure that provides an adjustment to the amount of revenue collected. It’s expected that the RCA will review the rate study next fall. If approved, the proposed rates will take effect by early 2018. The RCA will provide the opportunity for public comments.

How will our residential members be impacted? First, the customer charge will see an increase from $17.50 per month to $22.50 per month. This is the flat-fee charge every residential member pays to be connected to our electric system. In a nutshell, it will cost a residential member 75¢ a day to be connected to GVEA’s system. Second, the utility charge paid by a residential customer will see a decrease from 11.6¢ per kWh to 11.4¢ per kWh. This charge covers operation costs (power plants, substations, power poles, transformers, etc.) and is billed based on kWh usage. Bottom line, residential bills will increase by no more than $5 per month. Depending on a member’s kWh consumption, some residential bills may actually reflect a net reduction.

GVEA understands that an increase may be an undue hardship on some of our members. Be assured, GVEA’s computers check every four seconds to ensure we are using the least-expensive combination of fuels to generate your power. At any given moment GVEA can choose from five different fuel sources for its power plants. If a cheaper fuel becomes available, we switch.

GVEA looks forward to the arrival of the F-35’s at Eielson Air Force Base, natural gas in the Interior and the new load with the construction of additional facilities at Clear Air Force Station, all of which will have a positive impact on GVEA’s rates. GVEA is committed to keeping its costs low while continuing to provide safe and reliable power in the Interior.

 

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