Golden Valley Electric Association (GVEA)’s Fuel and Purchased Power rate, which is updated quarterly, increased by approximately 2.5¢ on March 1, from 10.450¢ per kWh to 12.969¢ per kilowatt-hour (kWh). This rate will be in effect March 1 through May 31. Residential members using an average of 600 kWh per month will see their monthly electric bill increase by $15.11.
The Fuel and Purchased Power rate is one of four charges that make up a residential electric bill. Two of the other main charges remain unchanged and have been unchanged for the past couple of years. The four charges on a GVEA residential bill are:
- Customer Charge of $22.50 – Unchanged since 2018
- Utility Charge of 12.697¢ per kWh – Unchanged since 2020
- Regulatory Charge of .1016¢ per kWh – set by the Regulatory Commission of Alaska
- Fuel and Purchased Power Rate of 12.969¢ – Adjusted quarterly on December 1, March 1, June 1 and September 1
The Fuel and Purchased Power rate is filed in compliance with GVEA’s tariff and is subject to review and approval by the Regulatory Commission of Alaska. It is comprised of 1 components:
1. An estimate of what GVEA anticipates will be its costs over the next three months to generate and purchase the energy necessary to meet the electrical needs of its members. The estimate takes into consideration projected fuel prices and the anticipated availability of generation resources.
2. A true up of any over-collected or under-collected amounts incurred by GVEA in the prior F&PP quarter to the extent that the estimated cost for the period just ending was different from the actual cost.
With respect to the Fuel and Purchased Power rate effective March 1, almost the entirety of the increase, 96%, is attributable to the under collected component from the Fuel and Purchased Power quarter that just ended February 28. This under collection was driven primarily by the fact that the anticipated generation resources (GVEA’s, and others that GVEA expected to purchase power from) were unexpectedly offline due to mechanical issues. As a result, GVEA had to generate and purchase electricity from higher cost resources.
The Fuel and Purchased Power rate is a straight pass-through charge. GVEA’s members are only charged the actual cost to generate and purchase power. There is absolutely no mark-up on this charge.
While the Fuel and Purchased Power rate is not something GVEA can fully control, we are constantly doing what we can to keep rates as low as possible. As a member owned not-for-profit cooperative, we recognize that electricity costs greatly affect our members and communities.
The Fuel and Purchased Power rates for the past 9 quarters underscore the fluctuation:
- March 1, 2022: 12.969¢
- December 1, 2021: 10.450¢
- September 1, 2021: 10.710¢
- June 1, 2021: 9.978¢
- March 1, 2021: 9.655¢
- December 1, 2020: 8.172¢
- September 1, 2020: 9.614¢
- June 1, 2020: 7.095¢
- March 1, 2020: 10.965¢