Update to Electric Rate Study

GVEA's Rate Case Successfully Completed

GVEA to reduce annual revenue requirements by $3 million

The Regulatory Commission of Alaska (RCA) recently approved an agreement entered into by Golden Valley Electric Association (GVEA) and the Office of the Attorney General, Regulatory Affairs and Public Advocacy (RAPA), resolving all issues in GVEA’s 2016 General Rate Case filing.

“We’re encouraged that the RCA and RAPA agreed with our new rate design,” said Cory Borgeson, GVEA’s President and CEO. “This agreement will establish a rate structure that more accurately reflects the costs of providing electric service to our members.”

An integral piece to the agreement is the successful and safe restart of the Healy Unit 2 power plant. The approved rates will be delayed until Healy Unit 2 meets certain operating conditions, as outlined in the agreement. While GVEA is optimistic that the modifications to Healy Unit 2 will be completed and back online in April of 2018, commercial acceptance won’t occur until fall.

GVEA subscribes to a ‘cost-causer, cost-payer’ ratemaking principle, as required by Alaska law. In December 2016, GVEA submitted its 2016 General Rate Case, requesting RCA’s approval to reduce its revenue requirements by 1.3 percent, or approximately $3 million annually, and implement rates and a rate structure that more accurately reflects cost-of-service levels.

GVEA understands that this rate change may have an impact to some of our members. Be assured that we continue to work hard to control costs and safely provide quality electric service and innovative energy solutions at fair and reasonable prices. No residential user should see more than a $5 per month increase.

To keep rates stable, GVEA continues to diversify its fuel sources. A long-term deal has been signed with Petro Star Inc. to provide us with Naphtha fuel for our North Pole Expansion power plant at a very reasonable price. We’ve also added more coal to our fuel mix and are also seeking to add renewable sources of energy to our generation. GVEA has a 563-kilowatt solar project scheduled to come online in October 2018.

New loads also help stabilize rates; therefore, we look forward to providing more power at Clear Air Force Station with the construction of additional facilities, and we anticipate the arrival of the F-35s at Eielson Air Force Base. This growth is projected to bring more people to the Interior, provide jobs and boost our economy.

GVEA will notify its members when the approved rates will be effective. The Fuel and Purchased Power Charge is not affected by the rate filing and will continue to be updated on a quarterly basis. For additional information, please visit www.gvea.com.

Note:  The article above appeared in the January 2018 Ruralite Magazine. To view that 3-page article in its entirety, click here.

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GVEA's 2016 Electric Rate Study

Several months ago, GVEA’s Board engaged a consultant to prepare a study of the cooperative’s costs of providing electric service and the rates charged for this service. The purpose of this study was to determine the revenue needed to cover the cooperative’s operating expenses and debt obligations, as well as examine the equitability of rates among the various customer classes. This project was broken down into three steps: determining the revenue requirement, allocating the costs among the various customer classes and designing rates.

The study showed that overall electric rate revenues warranted a decrease of $3 million annually or 1.3%. The study also showed that the rate structures needed adjustments. The Board decided to use this rare opportunity of a decrease in revenues to propose rate design changes that would bring the different rate classes closer to true cost of service. The cost of service study offers a comprehensive review of all rates to ensure that each member, regardless of rate classification, pays his/her fair share.

In mid-December, GVEA filed its 2016 Electric System Rate Study with the Regulatory Commission of Alaska (RCA) seeking approval to implement a revenue requirement decrease and proposed rate design changes. Although GVEA is requesting a revenue requirement decrease, many of our members will be seeing an increase to their monthly bills due to the proposed rate design changes. Below are two tables for use by Residential members.

If you would like to utilize a bill calculator to determine what the proposed rates would look like for your own bill, click here.

The following table provides a comparison of current rates and proposed rates:

Residential Rates

Current Rates

Proposed Rates

Customer Charge



Utility Charge

$0.11631 per kWh

$0.11404 per kWh

Fuel & Purchased Power Charge

Neither of these charges are impacted by the General Rate Case currently before the RCA.

Regulatory Cost Charge

The following table provides a Residential Rate impact comparison based on monthly kWh usage:

Monthly kWh Usage

Current Monthly Charge

Proposed Monthly Charge

Change in $


$  17.50

$  22.50



$  57.41

$  62.09



$  97.32



 (Average Usage)    600
















Written copies of all current rate schedules are available (at no charge) at our Member Service offices, as well as our website:  http://gvea.com/rates/rates.

All rates proposed by GVEA are subject to review and approval by the RCA before they become effective. By Alaska law, the RCA has 15 months to issue a final order in this proceeding.

A full copy of GVEA’s filing can be found on the RCA’s website www.rca.alaska.gov

To read a related article (with various links) on GVEA's blog site, click here. 



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