GVEA Board Authorizes $7.2 Million in Capital Credit Payments
Press Release - December 1, 2017
Accelerated payment is the first in the co-op's 70-year history
FAIRBANKS – The Golden Valley Electric Association board of directors has authorized payment of $7.2 million in capital credits to members who had service in 1992 and 2016.
The co-op typically retires capital credits after 25 years. Never has the co-op retired capital credits after one year.
In December 2016, GVEA filed an Electric Rate Study with the Regulatory Commission of Alaska (RCA). In this filing, GVEA requested an annual revenue decrease of about $3 million. While this case is before the RCA, GVEA rates are frozen which left GVEA with a very large margin for 2016.
The board authorized an accelerated payout of 25 percent from 2016’s capital credits or $4.8 million. “The early retirement of the 2016 portion was intended to provide a benefit to our current membership,” said Rick Schikora, chairman of the board.
GVEA is a member-owned, not-for-profit cooperative. Any revenue left at the end of each year is allocated to members based on the amount of power purchased throughout that year. These are known as “margins.” The co-op reinvests margins in projects and maintenance, such as building substations or replacing poles or lines. After a period of time, typically 25 years, these margins are returned to members in the form of capital credits refunds.
Active members can expect a check for payments over $100. Amounts under $100 will appear as a credit on their electric bills. Former members will be issued checks if the refund exceeds $25. All refunds will be distributed by the end of December.
You can access more information on GVEA’s website, which has a page dedicated to the topic of Capital Credits. www.gvea.com/resources/capitalcredits
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.