GVEA asks RCA to lower Fuel & Purchased Power Charge by 28%

by | Jan 13, 2015 | About GVEA, Rates | 0 comments

Oil prices are falling, and Golden Valley Electric is attempting to pass those savings on to our members as quickly as possible.

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Tomorrow, GVEA is filing a tariff update to our Fuel & Purchased Power (F&PP) charge with the Regulatory Commission of Alaska (RCA).

If approved …

  • This will be a 28% reduction (9.9 cents to 7.1 cents) from the current F&PP charge
  • The effective date would be February 1, 2015
  • This change would be implemented one month early, and it would remain through the end of May
  • The average residential bill of 600 kWh will be reduced by $17 per month

That’s a 33% reduction in our Fuel & Purchased Power charge from just seven months ago (10.6 cents to 7.1 cents). This change is the same across all rate categories (residential, commercial and industrial).

Here are some examples, based on monthly kilowatt-hour usage, of how much a residential bill will decrease. (You can find your kWh usage on your bill.)

  •    500 kWh = $14.18
  •    600 kWh = $17.02
  •    800 kWh = $22.69
  • 1,000 kWh = $28.36
  • 1,500 kWh = $42.54
  • 3,000 kWh = $85.08

Does GVEA have a fuel charge?  No. The F&PP charge reflects GVEA’s actual fuel expenses (oil, coal, wind) used to generate electricity, as well as power purchased from other utilities, such as Aurora Energy (coal) in Fairbanks, Chugach Electric (natural gas) in Anchorage, Bradley Lake Hydro and Alaska Environmental Power (wind) in Delta Junction.

When is the next scheduled F&PP adjustment due?  March 1. However, due to the dramatic drop in oil prices, GVEA is asking the RCA to not only approve the lower F&PP charge, but also to implement it one month early. The adjustment would remain in effect through the end of May.

How often is the F&PP charge calculated?  Quarterly. We closely monitor all factors that make up the F&PP charge. Based on what we anticipate those factors will be for the next three months, that cost is reflected on our members’ monthly bill as the F&PP charge. If the calculation is over or under for a quarter, a true-up mechanism is built into the following quarter’s calculation.

Why won’t this have a greater impact on my monthly bills?  Last year oil comprised just 25% of our generation fuel mix. The other 75% of our power came from coal, natural gas, hydro and wind. The cost of these other fuels has remained stable. So, the reduction is only on the oil portion of the F&PP charge on your electric bill. The bottom line … when you pay your monthly electric bill, you’ll see an overall decrease of 12%.



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Meadow Bailey


Ashley Bradish


Grace Wilson


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