Fuel & Purchased Power Charge Continues To Decline

by | Mar 3, 2016 | Rates | 0 comments

Effective March 1, 2016, the Fuel & Purchase Power (F&PP) charge, which is adjusted each quarter,Avg Bill Graph Jan 15 to Mar 16 was lowered.  In December 2015, the F&PP charge was $.0748 per kWh, and now it’s $.0609 per kWh. For the average residential bill of 600 kWh, this will be reflected as a decrease of $8.31/month.

The two primary reasons the F&PP charge decreased are:

  • The restart of Healy Unit 2 continues to increase our base load of coal-fired generation, which provides long-term stability since coal prices over time have proven to be significantly less volatile than oil or gas prices.
  • The new Petro Star fuel contract went into effect on January 1, 2016 and reduced our Naphtha fuel costs by 10% when the North Pole Expansion Plant is running.

The F&PP charge is directly related to the price of fuel used to generate power, as well as the cost to purchase power from other utilities.  It’s adjusted quarterly and is reflected on the monthly bill based on the kilowatt hours consumed.F&PP (Jan 12 thru Mar 16)

The most recent F&PP was filed with the Regulatory Commission of Alaska (RCA) at the end of February and consisted of November, December and January’s actual data and an estimate of February’s fuel expenses. It also included projected fuel costs for March, April and May.  The current rate will be in place through May 31, 2016, with the next quarter’s F&PP charge going into effect June 1, 2016.

GVEA President & CEO Cory Borgeson addressed the adjustment to the F&PP charge in a recent letter, which includes his positive outlook for things to come to Interior Alaska.  To read the letter, click:  GVEA Cost of Power Ltr (030216)

Wondering how GVEA’s rates compare to other Railbelt Utilities?

Railbelt Compare 030316



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