Note: This press release was issued Dec 20, 2016, to the primary media outlets.
FAIRBANKS — Golden Valley Electric Association has filed for a $3 million decrease in its revenue requirements for operating its electric utility with the Regulatory Commission of Alaska. If approved, this revenue decrease and rate design adjustments necessary to move all customer classes towards cost-of-service based rates will take place when GVEA obtains final approval from the Regulatory Commission of Alaska.
For purposes of rates, GVEA’s membership is divided into four customer classes (residential, small commercial, large commercial and industrial). The co-op recently completed a study that determines how much it costs the utility to serve each customer class. The new rates ensure that each class is paying its fair share of the costs to provide electric service, according to GVEA President and CEO Cory Borgeson.
The study found that GVEA’s revenue needs have decreased about 1.3 percent. That means the utility charge for residential members will be dropping from 11.6 to 11.4 cents per kWh. The study also recommended an increase to the customer charge for most customer classes to spread the co-op’s fixed costs more equitably. The proposed residential customer charge will increase the average utility bill by 2.9%.
The move to cost-of-service rates is important because the utility expects more and more members to produce their own renewable power — using GVEA primarily as a backup. “The new rates will encourage the growth of small-scale renewable power in the Interior, while keeping your co-op financially viable,” Borgeson said.
Borgeson emphasized that the revenue decrease and rate design changes will not happen until the Commission completes its review. “If our members change three 60-watt incandescent light bulbs to LED bulbs, they can more than offset the impact of this adjustment,” Borgeson said. He encouraged members to visit gvea.com/save for money saving tips.
“A residential member who consumes 600 kWh on average will see a maximum increase of 2.9% on their utility bill,” Borgeson said. Golden Valley’s other three rate classes will also see rate adjustments, Borgeson said.
GVEA provides electric power to nearly 100,000 Interior residents in Fairbanks, Delta Junction, Nenana, Healy and Cantwell.