The board of directors for Interior Alaska’s electric co-op approved proposed rate hikes at their meeting on Tuesday.
The changes stem from a rate case study Golden Valley Electric Association has been working on throughout this year. They’ll be subject to further regulatory scrutiny before taking effect.
The rate case study is meant to align what the co-op charges members with its financial needs; it’s also meant to ensure each type of member – be they residential or industrial – is paying their fair share.
A rate case is distinct from the simplified rate filing process, which can also alter how utilities charge members and that electric co-ops can do multiple times per year under Alaska law. Golden Valley says it last had a rate case – a more in-depth analysis – in 2016, and that they’re typically completed once every five to eight years, making this one overdue.
The co-op has a few service types its members fit into, and the proposed changes would apply to them differently, according to the resolution the board adopted Tuesday. Rates for almost every type would go up under the plan, though, including an 8.4% increase to the utility charge for residential members. Rates for small businesses are the exception. That class would see a roughly 7.7% decrease to its utility charge. Utility charges are just one component of a member’s overall bill, so those figures don’t represent the percent change to members’ total bills.
The proposed changes would also adjust the underlying structure that determines how rates are calculated for some other classes, like larger commercial or industrial members.
Board Director Rick Solie said he’s convinced the rate adjustments are well thought out, and that they’re necessary to keep the utility’s services stable and reliable. The utility estimates it needs to bring in roughly $11 million more in revenue.
“Overall, I’m pleased. It’s not an insignificant amount of money we’re going to raise off our people. But, mind you, this is years in the making,” he said.
The board of directors adopted the proposed changes in a unanimous vote. Golden Valley’s case filing will now head to Alaska utility regulators later this year for their review and approval. The analysis by the Regulatory Commission of Alaska, or RCA, can last up to 15 months.
In the meantime, Golden Valley is requesting that the regulators approve an interim increase of about 7.5% across all rate classes, which would take effect in mid-January. The increase would apply to utility and demand charges, meaning that figure also doesn’t translate the percent increase for total bills. The exact percent varies depending on rate class since utility and demand charges make up a different portion of each class’s rates.
Golden Valley Regulatory Manager Daniel Heckman said Tuesday they’d abandon that interim increase, however, if regulators approve the proposals in the rate case filing as part of the initial review period.
“There is a world, or a scenario, where the RCA receives our filing and approves it within the 45-day period, and if that happens the permanent rates take effect,” he said.
That’s considered the less likely scenario, however, as most rate case filings are suspended so the regulatory commission can conduct the more in-depth review.