GVEA says another rate increase required
Published Tuesday, July 22, 2008
Digg
delicious
Facebook
Mixx
Reddit
Stumble It!
FAIRBANKS — Golden Valley Electric Association is proposing a 3.4 percent rate increase that would take effect October 2009, pending a yearlong review process through the Regulatory Commission of Alaska.
Residential customers would see the highest increase at 7 percent.
But association members at a meeting last night took the rate hike in stride, focusing their questions on what’s being done to pursue alternate electricity sources and why the Healy Clean Coal Plant isn’t up and running yet.
Dianne Marshall said her family has been working hard to reduce electric consumption and in turn wants to see state-level action to bring long-term solutions like the Susitna hydroelectric power project online.
“I’ll pay my bill. I’ll turn my lights off, but what we really need is to see what we need to do to wake up the rest of the state,” she said. “How do we get the rest of the state to think long-term?”
Association CEO Brian Newton assured the 80-or-so members at the meeting that the electric utility is considering mid-range and long-term ways to provide reliable power.
But for now, the price of oil is clearly driving electric rates, as well as the cost of doing business and other energy-related problems, Newton said.
As costs of oil, coal and natural gas increase, interest and depreciation are soaking up a larger amount of money from the association, Newton explained. Those are derived from $300 million in investments the association has made in recent years.
“Now, we’re paying for that,” he said, adding that the upgrades were necessary to ensure reliability. “How much is that worth to us when it’s 60 below zero?”
The rate increase developed as part of a RCA-mandated review that takes into account the cost of providing power to each customer category. The cost of service evaluation is designed in part to make sure no single category subsidizes rates for another category.
Through the study, GVEA found industrial users are subsidizing rates for other customers — and are actually due a 5 percent decrease while residential customers should be assessed 13.7 percent more.
However, following consultation with some of the six industrial customers, GVEA is proposing no change to industrial rates, and increases of 7 percent to residential customers; 6.4 percent to small commercial charges; and 3 percent for large commercial customers.
The rate increases are subject to GVEA board approval in August and the RCA’s yearlong process, during which industrial users could protest the proposed structure, Newton said.
As for the Healy Clean Coal Plant, a July 18 letter from GVEA to its members says the association is working directly with the Alaska Industrial Development and Export Authority Board and state administration to restart the plant. That will depend largely on the resolution of legal matters surrounding the plant, Newton acknowledged.
He also urged members to push their legislators to advocate development of a state energy policy and to support ways the state can offer residents relief.
Community Discussion
Newsminer.com doesn't necessarily condone the comments here, nor does it review every post. Read our full user's agreement.
I remember several years ago GVEA ran an ad campaign praising themselves for having not raised rates for ten years. I said at the time, "uh-oh, they're getting ready to screw us." They have raised rates every year since. The excuse that it is due to rising fuel costs is ludicrous. The fuel adjustment cost on your electric bill accounts for that. This month my fuel adjustment cost was $6 more than my usage cost. Two years ago my fuel adjustment was a $27 credit. This month is was $72. Basic math tells you that is a $97 increase. I have cut my electic usage by almost 30% and my bill has still almost doubled. If you read Mr. Newtons comments closely you see that we are paying for $300 million in bad investment decisions GVEA made. I hope the RCA does their job, looks closely at this, and denies the request. A 7% increase is outrageous.
GVEA has finally realized that they, too, can raise prices frequently and people will have to pay because they need their mochas in the morning. Don't get me wrong, I like a nice hot shower......
Palin hired Steve Haggerson to develop a plan for the State's energy needs. How many billions will he be giving away to the good old boys in the form of "energy ear marks" for unproven theories of alternative energy?
Their going to give it all away. Till the state is broke. GVEA is the worst Co-op electricity business, I've ever seen. Why in the world did they build/upgrade a power plant to run off of oil, this was completely stupid. COAL is supposed to be so abundant in Alaska and is 10 times more stable in price. Thanks GVEA for wasting another 2,500 gallons of fuel an hour, hope you all sleep good at night. This is how much the N.P. plant cost to run. It cost over $8.0 million to operate this wasteful plant a year, based on current fuel price....OUTRAGEOUS, and this is was supposed to save us money
I'd like to suggest a whole new rate structure. Under the "Taters Plan" the largest users of electricity would pay the most per kWh and the smallest users would get the lowest rate.
Now, you may think that sounds un-fair until you look into where our electricity comes from. With North Pole burning a reported 3,500 gallons of oil every hour that is the real driving force behind the high prices. If I'm not mistaken, if we dropped the several largest users from the system, we could get by without North Pole much of the time (like we used to do most of the time). So, if it's the large users of power who are causing the high expense plant to be run than maybe they should pay for that "expensive" power and let the rest of us co-op owners pay a more reasonable rate.
Does this make sense to anybody out there or am I just an aging hippie freak with commie leanings?
I'm not sure how the everyday Joes, the retirees, low-income families or these days’ middle-income families are going to be able to survive this winter. Right now, we are paying the same amount we used to pay for electricity for a Dec., Jan or Feb. month. Why are the Fairbanks cost rising so much when you have the folks in the Valley and Anchorage paying reasonable rates. Maybe GVEA should look at their structure and model something after them. Between rising fuel cost for transportation and heating, the cost of groceries, child care and everyone else's increases to compensate for their fuel bills-I'm not sure how we are going to make it.
I just paid my May/June electric bill. Now guess where I am ? The bill was for 306 kWh, total cost including a 15% sales tax, was $20.63. Now guess how far I am from a hydro electric DAM ?
Are you forgeting about GHU ? They are learning for GVEA who are both learning for the oil business. Hold on for the ride, it is going to be a rough one...
Another 3.4-7%......You have got to be freakin kidding me! GVEA is a joke! Yeah lets not get the Healy Coal Plant going, things are just fine the way they are, GVEA is making a killing while raping its customers!
First and foremost I want to thank the employees of GVEA. The linemen who are out in subartic weather doing their jobs and doing it well. I want to thank the people who have answered the phone, on the few occasions I have had to call GVEA, for their quick response and proffesionalism. I am especially thankful to those employees who disagree with the BoD but have no choice except to implement policies and procedures as directed by the BoD. I know what it means to be "caught between a rock and a hard place".
Now for the real problem. Mike and James, as they almost always do, have brought to our attention that the problem lies with the BoD of GVEA. Their cavalier attitude has not changed one bit in the last ten years that I have been paying attention to their antics.
Indeed, they continue to throw money at losing ventures, that have nothing to do with generating or transmitting electricity.
My question to Mike, James and others who feel that problem lies with the BoD. What are we going to do about it?
Here is a link to Dermot's remarks on the last GVEA election.
http://www.newsminer.com/weblogs/dermot-...
As you can see, all three incumbents won their seats. This is the same problem with other elected offices. How will we ever achieve true change if the BoD members never change?
Before anyone happens to ask me, yes, I did vote for an incumbent, Tom Delong. Primarily, because he appears to be a thorn in the side of the rest of the BoD and he appears to have the rate payers needs in mind when he casts his one lone vote.
I am open to any and all ideas that anyone out there may have on how we rate payers can take control of our BoD. E-mail me through the NM or call me. Trolls and other low lifes need not answer.
It's time for torches and pitchforks!
Here is a link to a story in the Juneau Empire today, maybe the GVEA BoD should take a lesson.
http://juneauempire.com/stories/072208/l...
"However, following consultation with some of the six industrial customers, GVEA is proposing no change to industrial rates, and increases of 7 percent to residential customers; 6.4 percent to small commercial charges; and 3 percent for large commercial customers."
Yeah, that's fair! so big industry has no rate increase, and the Walmart's pay only 3% more while we pay 7%.. I smell corruption.
Of course, we can fight back with the newsminer.. they'll save us...
mackie,
I am not advocating the use of violence. I want to know how I can influence you and others to see that the BoD of GVEA are "the problem".
There has been a great deal of animosity expressed against the BoD. I want to channel that feeling of animosity in such a way that you, me and other ratepayers get some real satisfaction. I want a BoD that is beholden to ALL the ratepayers, not just some of them.
I want the BoD of GVEA to focus on generating electrcity and transmitting that electricity at the lowest cost possible. And that is all I want the BoD to focus on.
If you are like minded, please contact me with real solutions. I have the desire to do something about the problem, not just continued carping, ad nauseam.
Kudos and dittos to all of the above posts today. Especially to the one suggesting that we not condemn the hardworking employees and put the blame directly to management and Board of Directors. The GVEA BOD has always held itsself to be more knowledgeable "in everything" than the average Fairbanksan. Why not? They spend a lot of money sending BOD to national schools to educate them in how to be a god(0ophs..That was supposed to be "good" ... probably a Fruedian slip) director and when they come back, it's the GVEA way or No Way. In talking, the most commonly used phrase is "at GVEA, we do it this way" Well, look at where we're at. Let's see where all that training goes when the issue of negligence in their BOD responsibilities is established. I imagine that they have a huge Directors and Officers Liability Policy that we all have been paying the premiums for that will protect them from the association's memberships review.
Poppa,
Should we remove the current BoD and have AEL&P take over?
calendar,
Never mind trying to recoup our losses from the individual members of the BoD. That is water under the bridge. We should have been more vigilant in the past. We, the ratepayers, have let the BoD run things "the GVEA way or No Way."
But now that some of us are aware of the level of hubris exibited by our BoD, let us do something to stop their self serving ways.
The last paragraph of the story is attributed to GVEA's CEO Brian Newton.
"He also urged members to push their legislators to advocate development of a state energy policy and to support ways the state can offer residents relief."
That is part of his solution to our very real problems. Ask the Nanny State for more welfare.
This is terrifying. I've done everything they recommend, changing light bulbs, using timers, I replaced my 25+ year old fridge with a new energy star one, and yet, my last bill was nearly $80. This time last year (with the old fridge) it was $60. Come winter, with the Toyo running, the car plugged in and the heat tape (all of which are off now) I'm going to have to use kerosene lamps and candles to light my house because I won't be able to afford to even turn on the low energy lights.
I plan on getting an energy audit, and seeing if the Home Energy rebate thing will pay for a new water heater (mine is 30 years old), but even then, what else are they expecting us to do to conserve power? People are already getting to the bare bones for this winter, and they want to raise the prices for next winter?
Do you know where we can get good candles or lanterns. If they were good enough for Abe Lincoln it should be good enough for us.
GVEA BoD = Racketeering ???
I thought Palin just gave these con artists a whole bunch of money.
There is no way of my family conserving more electricity that we do now. I currently turn my boiler on in the morning to heat up water, everyone takes their showers and then I shut it off - there is generally plenty of water for the washing machine & what ever else I need for the rest of the day. I have done this all summer long with a family of 5 and our electric bills are currently running $130/month. I wonder what they will be when I turn the boiler on for the winter?
Crazy!
It seems that no matter which way you look at it, the cost of living in Fairbanks will continue to rise and Fairbanks will be a very expensive place to live. Each person will have to find their own answer and solution to the high cost of living here.
Of course we're going to be receiving another rate increase...we've got to pay for the upcoming "holiday" party, because they've gotta be stylish for the holidays!!
I know the BoD is BAD,and why does Kelly still attend the meetings?Was that a lifetime appointment?
I am stunned to see that GVEA is even considering another rate increase. Please correct me if I am wrong, but didn't they just increase rates a month ago? I really took a long look at our energy consumption and the correlating amount of our bills. This May we used LESS energy and paid out MORE--example: last year approx 1200kwh this year the same--last year bill $185 (approx) this year $285. that looks to me like a 50% increase in rate in a year. Granted, it may be the difference in the "surcharge", but WHAT??? I don't get it. I suppose we could use a generator--but with fuel prices--probably NOT.
I do appreciate the staff we have working for GVEA, but what is going on? Additionally, does anyone else wonder what GVEA might use money granted to them by our State Government to help the consumer?
One last straw to break the camels back. I put a for sale sign up on my property yesterday. As soon as I can I'm leaving Alaska. For you who are staying, good luck and you can have my share of the Alaskan Dream... That is if you can afford it.
Ulises, not a bad idea removing them. The BoD and executives made some very poor decisions in the past that are now costing the rate paying member/owners. Maybe they should have been looking at alternatives other than oil like small scale hydro.
Does anybody know if there are recall procedures outlined in the co-op bylaws (if such bylaws exist)?
If EVERYBODY refused to pay their electric bill, at once, in protest I think GVEA might take notice. Anything less and they'll just be doin their thing with NO worries about the "protests of little people".
If their rates are too high DON'T PAY THEM, this is our state NOT THEIRS people shouldn't have to move away because some stupid business company is too incompetent to run a DECENT operation, this is supposed to be part of the United States not the Soviet Union, if we(the people) have a problem with our government and/or corporations then we are supposed to be able to change it, not just bow our heads and take it cmon.
If you let them have this they'll keep taking. We don't even notice it, rights are being taken away slowly but surely- extravagant and ridiculous prices for fuel(the whole country is up in arms about it but does anybody see any REAL action???), brave soldiers sent to their deaths on the whim of a con-artist then when they come back see if their wonderful government will give them decent health care, etc. etc. ad nauseam.
So they take a little here and take a little there till finally theres nothing left of us but quiet subjects softly whimpering in the dark.
Thank you James for the information.
Not being able to block a rate increase however, doesn't make sense. If that's the case, there's nothing to prevent them from raising their salaries and expenses and milking the public incessantly.
If such is the case, then we should be reaching out to find ways to totally oust the management. There would also need to be laws amended that prevents this ludicrous behavior.
Personally, I feel they will continue to raise the rates every year, just to get as much as they can. They are acting no different than the oil companies, or an out of control government on a spending spree. "spend, spend, spend, we'll just keep raising the rates to the maximum the law will allow." Where's the checks and balance in that?
TURN OUT THE LIGHTS THE PARTY IS OVER!!!
7% increase to residential users...WRONG!!!
And a free-ride for industrial users...WRONG!!!
Time to clean house with the present BoD of GVEA.
Time for some active competition for electrical service???
Time for the Regulatory Commission of Alaska to stand-up for customers.
Anyone notice they are asking for an increase to take place a year from this October,increase in effective for October,2009. By the time they get to that date, how much more will be asked for in the interim? The increase could end up being much more if energy cost keep increasing.
Can anyone tell me why is the electric services provided by GVEA to interior residents is so much more expensive than the electric services provided to South Central customers? What the heck is the deal?????
Wait, I just got a heart warming letter from GVEA saying they are "confident that AIDEA's pending lawsuit against GVEA can be dismissed". With that good news and all the other happy news in the letter I think GVEA will drop this application for a rate increase. It must just be an internal communications problem. The guy who applied for this lopsided mostly residential rate increase must not know that we are close to getting that coal plant running.
I think I'll start installing electric heat!
I am not from here, but never in my life have I paid such an outrageous amount in electric bills. And what's with the fuel surcharges? They are equal to and sometimes more than my usage charges. Is this just a normal everyday operating expenses (such as gas for the meter-readers trucks)? That is what I've heard when inquiring about it, please correct me if I'm wrong. But, if so, that is what is called an "Operating Expense". It should be included in your total operating expenses, not paid by customers to increase your profit margin. Any first-year accounting student knows this.
If, indeed, this is how this company operates and it was an "elective" bill, I wouldn't pay them. Unfortunately, I am human and need the electricity to preserve my food and keep my family warm in the winter.
Due to rate increases the light at the end of the tunnel has been turned off.
Alaskacub A GVEA rep.informed me that Anderson has the highest electrical expences from Fairbanks to Cantwell.WHY?
is anyone else pulling their hair out right now? Guess its time to goto my power box and shut off all my circuit breakers.
Catch "22" folks. At some point the more energy you save the more it costs GVEA. The floating fuel adjustment charge was put in place to handle floating fuel costs. Still a good idea and fuel costs are not controlled by a GVEA Board of Directors, or BOD as many write.
If the North Pole fuel generator burns 100,000 gallons a day regardless of demand we pay for 100,000 gallons a day.....period. If we use a lot of electricity GVEA makes more money through our rates. If we use less electricity GVEA makes less money through our rates. We still pay for 100,000 gallons a day regardless but the less energy we use the less revenue GVEA takes in.
Because we have responded to conserving energy GVEA is taking in less revenue but they are still paying for 100,000 gallons of high cost fuel every day.
GVEA does have a problem. It is the Board of Directors.
I would really like to know why residents have a 7% increase, and big commercial only 3% and industry gets a free ride. I'm not so outraged about the rate hike as the unequal distribution of the rate hike.
"The rate increase developed as part of a RCA-mandated review that takes into account the cost of providing power to each customer category. The cost of service evaluation is designed in part to make sure no single category subsidizes rates for another category.
Through the study, GVEA found industrial users are subsidizing rates for other customers — and are actually due a 5 percent decrease while residential customers should be assessed 13.7 percent more.
However, following consultation with some of the six industrial customers, GVEA is proposing no change to industrial rates, and increases of 7 percent to residential customers; 6.4 percent to small commercial charges; and 3 percent for large commercial customers."
I think a lot of you missed this part (middle paragraph).
I'm definitely not happy about another GVEA rate increase.
I guess we should consider ourselves "lucky" that they aren't asking to raise them the full 13.7% the RCA-mandated review recommended.
Yea, right.
I have read with interest the comments posted in this blog. I used to work at a public held utility in the lower 48, similar in structure to GVEA. When I arrived here I went to one of the monthly meetings the board held and was aware of the following differences from the utility I left and GVEA.
1. the GVEA board meeting room was not large enough to hold more than 5 citizens to observe the meeting. Where I used to work, they held their board meetings in an auditorium and encouraged the public to participate.They averaged over a 100 observers every month.
2. GVEA only invites the public once a year and allows them to give brief comments.
3.The monthly meeting I attended I did not feel welcome by the BODs. In fact I was questioned as to why I was there.
In regards to fuel adjustment, was initiated in the 70s to allow utilities to recover the cost of money they spent on fuel during the oil shortages. Most utilities changed their fuel source at that time to get away from oil and go to more reliable and cheaper sources.
My ex utility did away with fuel adjustment in the early 90s.
GVEA can learn from other utilities on how to efficiently operate an electric utility and how to communicate with the public.
Saw on msnbc where a guy in Belgium took a wheelbarrel of pennies to his electric company to pay the electric bill.
That would make for a productive board meeting. [lol]
I agree with a previous reader....
It's time for pitchforks and torches!!!
gvea u suck is all i got to say. Oh the heck with it gvea u can stuff your little letter u sent me today u bunch of phony bastards
Has Pat Galvin or the State's legal dept. answered the question of the Anchorage area receiving natural gas at such low rates? Whitaker threatened future legal action unless the government is more equitable in addressing the energy needs of the entire state BUT said he didn't intend to make a threat of the unconstitutionality of the State not receiving the most revenue from Alaska's resources? and why hasn't the borough and our Interior legislators not filed action challenging this issue?
Yo James,
I had to go to work so couldn't respond in a timely manner.
Why should Fred's being open to the public make a bit of difference?
Under the Taters Plan everyone would have the same opportunity and motivation to get their electrical usage down. If Fred's cuts electrical usage, they save money and make more profit or are able to cut prices.
If Fort Knox or any of the other large users want to save some money they can figure out how to cut their usage just like a lot of us little guys have done.
The issue is that 45% of our power is generated from oil and while I don't know their actual usage, the "large general users" are listed in GVEA's 2007 annual report as paying 58.92% of the revenue. This may not be entirely accurate but if the (few)large users cause us to use the expensive oil-fired turbines than maybe they should be the ones to buy the most expensive electricity.
If Ft. Knox, Ft Greely (and the anti-missile missiles), Pogo Mine, and a few others were not using such large amounts of power, we wouldn't be running those turbines and our costs would be way lower.
As the rate structure is set now, large general users pay a far lower rate than the rest of us and without knowing the particulars I assume it would take some action by the legislature or the courts to make changes which would allow GVEA to set a different structure. Maybe somebody else out there in reader-land knows the answer.
All I know is that in this day of soaring fuel costs and the coming drop in world-wide production of conventional oil we ALL need to conserve and if the biggest users get the cheapest electricity what motivates them to cut usage?
Post a comment
Commenting requires registration.