Golden Valley Electric Association

Key Terms and Definitions

Here are the main charges you'll find on your bill and an overview of what they cover.

Customer Charge

The Customer Charge, a monthly flat fee, covers a portion of the basic costs of providing electric service. It covers costs for meter reading, billing and customer service. This charge has not increased since 2002, despite increasing expenses and the indirect effects of the rising price of oil.

Energy Charge (Utility Charge)

This charge is multiplied by the number of kilowatt-hours (kWh) used in that monthly billing period. It includes a base cost for fuels such as the coal and oil we use to generate power as well as power we purchase. It covers the costs of power plants and substations and the labor and maintenance to operate them, as well as interest on loans. The costs of wires, poles and transformers to deliver power are also included in this charge.

Fuel Adjustment

The Fuel Adjustment covers the remaining portion of fuel costs. It is based on a combination of forecasted and actual power costs. This monthly charge allows Golden Valley to pass on increases and decreases in fuel and energy purchases to our members. The fuel adjustment is independent from the proposed rate adjustment and will continue to be calculated quarterly.

Rate Adjustment

Cost of Service Study Results

Golden Valley's cost of service study is complete and has been approved by the Board of Directors and was submitted to the Regulatory Commission of Alaska. The study, required by the RCA, took 18 months to compile and nearly $1 million. The RCA's initial deadline was 2006, but GVEA was able to extend it two years.

The goals of the cost of service study are to insure we are:

The cost of service study attempts to follow a "cost-causer, cost-payer" philosophy. This means the rates should reflect the cost of providing service to each rate category (i.e. Residential, Commercial, Industrial).

Overall, the study found GVEA had a revenue shortfall of nearly three and a half percent. Among the findings of the study were that residential rates are under collecting the cost to serve the Residential category by more than 13 percent. Small commercial rates are currently under collected by more than six percent and large commercials under collected by three percent. The study also found the industrial rates are over collecting by about 5 percent over the cost to serve that rate category. Six businesses fall into this Industrial rate category. The graphs on page 5 illustrate the current situation and your Board's proposed recommendation to the RCA.

"We've talked with most industrial members, and they generally agree that given current economic conditions and high energy costs, our residential members, many of whom are also their employees, would benefit from the industrial members foregoing a rate decrease at this time," President & CEO Brian Newton told members recently. "Based on current rates, this will lower the increase to residential rates to about five and a half percent."

Rate Adjustment Impact
Current Proposed Change
Residential
(750 kilowatt-hours)		 $161.54 $170.64 5.6%
General Service-1
(2,000 kilowatt-hours)		 $406.76 $426.88 4.9%
GS-2 Large Commercial - Secondary
(50,000 kilowatt-hours)		 $9,675.95 $9,757.60 0.8%
GS-2 Large Commercial - Primary
(100,000 kilowatt-hours)		 $18,685.05 $19,390.47 3.7%
GS-3 Industrial
(7,000,000 kilowatt-hours)		 $1,179,934.00 $1,179,678.21 0%

Rate Adjustment Informational Meetings

Fairbanks - Noel Wien Library Auditorium - Oct. 28, 2008 6 p.m.
Anderson - Anderson City Hall - Oct. 29, 2008 6 p.m.
Delta Junction - Delta Junction City Hall - Oct. 30, 2008 6 p.m.

Reviewing the filing

The complete filing can be found at:

Submitting comments

Mail your written comments on the proposed rate revision to:
Regulatory Commission of Alaska
701 West 8th Avenue, Suite 3000
Anchorage AK 99501
or email comments to: rca_mail@rca.state.ak.us

RCA will be setting a deadline on when it must receive written comments in the mid-to-late November time frame. For the exact date, visit www.rca.org.

Included in your comments must be a statement indicating a copy of the comments has been sent to Golden Valley. You may email this copy to info@gvea.com or mail it to GVEA, PO Box 71249, Fairbanks AK 99707-1249.

Effective date

The rate filing and public comment period are the first steps in a comprehensive review process by the RCA leading to approval of the final rate schedules. The final rate schedules are expected to be approved by RCA by the end of 2009, and become effective January 2010.

Cost of Service Results
Proposed Average Rate Increases Our Energy, Our Future for Interior Alaska
Townhall Meetings
View Video from our recent
Membership Meeting in Healy.

GVEA is bringing a national energy campaign to the local level with the introduction of Our Energy, Our Future for Interior Alaska. It's a grassroots call to action to take part in initiating positive changes to the electric industry.

In July, Golden Valley held Membership Meetings in Delta Junction, Fairbanks, Healy, Nenana and North Pole. If you missed these meetings, you can view video from our meeting in Healy. Check out the video link in the sidebar to the right.

Nationally, many issues must be overcome such as polarized political positions on global climate change and greenhouse gasses and the availability of affordable and reliable power in the face of increasing demand. And, perhaps most importantly of all, the impression that the voice of the consumer is not being heard.

Our Energy, Our Future lays out three areas of dialog cooperative members nationwide are approaching.

Members are also encouraged to contact their elected officials and let their voices be heard. Contact information for the current Alaska State Legislature is at their contact website.