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.

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

Residential Rates

Current Rates

Proposed Rates

Customer Charge

$17.50

$22.50

Utility Charge

$0.11631 per kWh

$0.11470 per kWh

Fuel & Purchased Power Charge

Not impacted by General Rate Case currently before the Regulatory Commission of Alaska.

Regulatory Cost Charge

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

Monthly kWh Usage

Current Monthly Charge

Proposed Monthly Charge

Change in $

0

$  17.50

$  22.50

$5.00

200

$  57.41

$  62.09

$4.68

400

$  97.32

$101.68

$4.36

 (Average Usage)    600

$137.23

$141.27

$4.03

800

$177.14

$180.86

$3.71

1,000

$217.06

$220.45

$3.39

1,200

$256.97

$260.03

$3.07

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

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