GVEA’S QUARTERLY FUEL & PURCHASED POWER RATE CHANGE – EFFECTIVE MARCH 1, 2024
February 28, 2024 – Golden Valley Electric Association’s (GVEA) Fuel and Purchased Power (F&PP) rate for the upcoming three-month period, March 1 through May 31, will increase approximately 4.8¢ to $0.16629 per kilowatt-hour (kWh) resulting in an increase to residential members’ bills of approximately $29, based on an average usage of 600 kWh per month.
The F&PP rate is updated quarterly and is a combination of two factors. The first factor reflects the cost GVEA projects it will incur during the upcoming quarter in generating and purchasing the power necessary to meet the electrical needs of its members. The second factor includes a true-up of what it actually cost GVEA to generate and purchase power during the prior three months. If the actual cost during the previous quarter exceeds or is less than what GVEA had projected, the difference is carried forward and recovered in the next quarter resulting in either an increase or a decrease to the projected F&PP rate. Unexpected events that occur during a quarter, such as changing fuel prices, unscheduled outages on any of GVEA’s generation units, or changes in the availability of purchased power affect the accuracy of GVEA’s projections – sometimes dramatically as occurred during the quarter ending February 29, 2024.
For the upcoming quarter (March through May), approximately 3¢ of the total F&PP rate is attributed to the fact that GVEA incurred higher costs than projected during the prior quarter (December through February). These higher costs were due predominantly to a prolonged, unscheduled outage at Healy Unit 2, which in turn resulted in GVEA having to generate electricity using more expensive fuel oil generation. Additionally, the cost of fuel oil for the quarter was higher than originally projected. The remaining approximately $0.13 of the F&PP rate reflects what GVEA projects it will cost to generate and purchase the power needed to meet the electric needs of its members during the upcoming quarter. Costs are projected to be higher due to the unavailability of natural gas generated energy up the intertie from Southcentral at a time when many of GVEA’s lower cost generation units are scheduled to be out of service for maintenance, which will require GVEA to rely heavily on generation from its more expensive fuel oil units at a time when fuel prices continue to be high.
The increase in GVEA’s cost of power for the upcoming quarter underscores the necessity that GVEA continue to aggressively pursue and secure lower cost, reliable alternative energy sources (including renewables) to replace underperforming generation units and reduce GVEA’s reliance on higher cost generation.
Additional information about GVEA’s F&PP rate, billing options and financial assistance can be found on GVEA’s website: www.gvea.com.