GVEA Files 2016 Electric Rates Study with the RCA

Press Release - December 20, 2016

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.

 

An Update on GVEA's Healy Unit 2 Plant

On Thursday, March 3, 2016, at approx. 7:20 p.m., Healy Unit 2 experienced a fire/explosion in the plant’s coal feed system. The root cause is under investigation. There were no injuries resulting from this event.

The plant was in a start-up condition operating on oil. As the pulverized coal system was being brought online, a fire/explosion occurred inside the coal feed system, which resulted in damage to equipment and piping.

The primary piece of equipment that was damaged, and will need to be replaced, was the fan that transports pulverized coal dust from the pulverizer to the boiler. Unfortunately, this fan will need to be manufactured, which has a long-lead time before it is onsite. A rough time estimate to complete repairs is four to six months or longer, if needed.

A methodical and all-inclusive approach is being taken in the investigation of this incident, and two parallel paths are being followed:

  1. Identify what was damaged, purchase replacement equipment and repair existing equipment. Any additional equipment that is identified in the investigation will be reviewed and installed as necessary. Black & Veatch Engineering will be assigning a project manager to work in partnership with GVEA staff to see that all repairs are made.
  2. A root-cause analysis to determine the cause of the fire/explosion will be conducted by an independent third party. Recommendations resulting from the analysis will be implemented. The analysis is expected to be complete within the four-to-six-month timeframe referenced above.

A scheduled outage was planned for three months this summer to tie in the new environmental equipment. That schedule has been moved up and will start at the end of March in order to take advantage of this time off line.

GVEA is committed to the safe operation of Unit 2; therefore, the plant will not resume operation until all safety concerns regarding this event have been addressed.

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