Golden Valley to cut Fuel and Purchased Power rate, increase Utility and Demand charge, effective June 1
Golden Valley Electric Association members will be paying less for electricity, beginning Saturday.
Golden Valley announced Wednesday that members will see an average decrease of about $13 in their monthly bills over the next fiscal quarter. Spokesperson Ashley Bradish says that’s mainly because the co-op reduced its Fuel and Purchased Power rate after finishing paying for higher-than-anticipated energy costs during the previous fiscal quarter.
“The key driver for that decrease is really the full recovery of the balancing account that had grown to nearly 11 million dollars, due to under-collection in the quarter prior to the March 1 increase,” Bradish said.
That March 1st increase nearly quadrupled the Fuel and Purchased Power rate, which in turn boosted members’ monthly bills.
“That 29-dollar average increase in March was due specifically to the Fuel and Purchased Power charge,” she said. In effect, the June 1 rate cut reduces that rate hike by half.
Co-op officials said the March rate hike was mainly driven by a shortage of lower-cost natural gas-generated electricity from utilities in Southcentral, transmitted up the interties. That, and problems with the coal-fired Healy Unit 2 power plant, required Golden Valley to produce more electricity with generators running on costly diesel fuel.
With the expenses of the March rate hike now covered, the Fuel and Purchased Power rate will go down by 17.4 percent.
But the co-op’s Utility and Demand Charges will rise by 5 percent for the coming fiscal quarter.
“That pays for the maintenance and operations of GVEA’s facilities. That includes our power plants and substations,” Bradish said. “The bottom line and unfortunate reality is that it’s costing GVEA more to provide electric service to our members.”
Golden Valley has filed the two rate changes with the Regulatory Commission of Alaska.
The rate changes will remain in effect through August 31st.
