Utility rolls out plan to boost fuel and purchased power rate to cover rising cost of diesel used to generate power
Golden Valley Electric Association said Wednesday that the co-op will soon sharply increase how much it charges members to help pay for fuel to generate electricity.
GVEA sent out emails to members stating the co-op will boost the so-called fuel and purchased power charge on Monday. CEO Travis Million advised member that it will be “an extraordinarily large increase.”
Million said in an interview Wednesday that the charge will go up by about 61 percent on June 1st day. He said that’ll cost the average residential nearly $46 more per month.
Million said the massive rate hike is needed because Golden Valley has been using its diesel-fueled generators more than anticipated. That’s mainly because the co-op no longer has access to cheaper electricity from utilities in Anchorage and the Mat-Su, due to dwindling natural gas reserves they use to generate power.
“ So we're running those diesel units more to meet demand, because we're not getting any energy from Southcentral,” he said.
In addition, the cold winter and cool spring weather has forced Golden Valley to generate more electricity. That and overall increased demand required the co-op to rely more on its diesel generators.
“We did see higher load across the board,” Million said. “On the residential and on the industrial side, we’re just using more electricity than what we had traditionally seen historically.”
He said Golden Valley also has to make up for skyrocketing diesel prices that’ve been caused mainly by the war in Iran.
“When we filed our last cost of power adjustment, end of February timeframe, fuel prices were about $2.50 a gallon for what we were buying for our power plants. Fast-forward to today, it's $5.10 per gallon for that same fuel product. So, more than double the cost of what we had projected during that timeframe.”
Million said Golden Valley’s management and board aim to formulate adjustments to the fuel and purchased-power charge so it will cover the cost of generating or buying electricity in the coming fiscal quarter.
He says if that doesn’t work as planned, the co-op will keep its members informed. Million said that’s what he’s been doing in meetings over the past few months in Fairbanks and outlying communities. And he’ll continue to do that.
“I will personally be communicating to the membership on what we're seeing and what that's looking like going into the next quarter.”
Golden Valley’s members already pay more for electricity than any of the other Railbelt utilities. Million says GVEA’s management and board realize the rate hike will create hardship for members who already are having problems paying their electricity bills. And he urged them to contact the co-op to work out extended payment plans or other arrangements.
“ If any members are struggling financially, especially with the impact of this bill, please contact us. Let us work with you.”
Members who need help can contact Golden Valley at 907.452.1151.
